A permit to build an accessory dwelling unit (ADU) does not authorize its separate sale. Under the ADU condo sale rules in San Jose, a homeowner using AB 1033 must convert the main residence and ADU into condominiums, obtain parcel-map approval and record the ownership documents before conveying the ADU separately. The city’s conversion process changes the ownership arrangement for both homes.

Financing and shared responsibilities are therefore early feasibility questions. Before paying for a complete conversion package, establish whether every existing lienholder will cooperate and what obligations you would retain with the main house.

What condominium conversion changes

A condominium combines ownership of a defined unit with an interest in common property. The buildings can be detached; the ownership documents establish the boundaries and rights. In a typical house-and-ADU conversion, the retained house also becomes part of the condominium project. The California Department of Real Estate’s subdivision guide explains this distinction between a building’s appearance and its ownership form.

An SB 9 lot split instead creates two land parcels, subject to its own eligibility rules. An AB 1033 condominium map does not, by itself, give each home a conventional separate lot. Both processes involve mapping, but they create different ownership arrangements. HCD’s March 2026 ADU Handbook discusses the separate pathways.

Where San José’s rules apply

San José’s original AB 1033 ordinance took effect July 18, 2024. That local adoption made the condominium option available; it did not automatically convert existing ADUs.

AB 1033 authorizes local adoption, so San José’s ordinance does not authorize conversions elsewhere. For other California housing projects, verify the governing city or county’s adopted zoning and land-use policy. HCD’s March 2026 handbook also identifies a separate, narrow qualified-nonprofit exception under Government Code Section 66341, outside this homeowner conversion process.

1. Verify the property and current requirements

Start with the city’s ADU Condominium Checklist. Confirm that the property lies within incorporated San José, retrieve the ADU’s building-permit record showing final approval, and establish who owns the property. An applicant acting for the owner needs written authorization. If permit records are missing or approvals remain unresolved, contact the Building Division before treating the unit as ready for conversion.

The checklist’s date matters. The posted Planning checklist is dated July 29, 2024 and still states a maximum of two ADU conversions. Ordinance 31298, effective March 6, 2026, replaced the former fixed limits in Section 20.80.185(A) with a reference to the number of ADUs allowed under state law. It also retains an allowance for up to two qualifying SB 9 primary dwellings. Do not use the older form alone to determine a project’s unit ceiling. Read the adopted amendment, Section 19.

Ask Planning to confirm the permitted unit configuration, particularly for multifamily properties or projects involving SB 9. Conversion approval does not supply permission to build additional units.

Have a California real estate attorney coordinate the ownership documents with your surveyor and title team. Obtain property-specific financing and tax advice before committing.

2. Get a workable answer from every lienholder

San José’s condominium requirements prohibit recording the subdivision map or condominium plan without each lienholder’s consent. A lienholder can refuse or attach conditions. Written consent must accompany the condominium plan with the required identifying information.

Order a title report early and identify every secured loan or other lien. Do not stop with the company collecting the first-mortgage payment; ask who has authority to approve the change.

Request written answers to three questions:

• Will the lienholder consent to converting its existing collateral into condominium interests?
• Will consent require a paydown, payoff, refinancing or another loan modification?
• What must happen to release the condominium being sold from the existing lien at closing?

Treat consent to record the conversion and the conditions for releasing the unit at sale as separate questions. Ask a prospective buyer’s lender to review the proposed condominium structure early, too.

If you plan to keep the main house, compare the proposed sale proceeds with conversion expenses, any required debt repayment, and the financing and shared costs remaining afterward. The gross ADU sale price alone cannot answer whether the transaction is worthwhile.

3. Assemble the map and ownership documents

Public Works provides a dedicated AB 1033 parcel-map application and instructions. Prepare the documents together: a boundary or access change in one may require corresponding changes in others.

The Public Works map checklist requests a title report dated within the preceding 90 days, signed and sealed survey closure calculations, supporting recorded documents, the completed Planning checklist and required attachments. Its standard AB 1033 package describes a parcel map processed without a tentative map; confirm the appropriate mapping route for an expanded or unusual project.

Have the surveyor and attorney check the same site layout. A fence drawn around a yard does not settle its ownership or give another owner a recorded right to cross it.

4. Resolve shared property and utility obligations

San José requires an owners’ association or similar entity before parcel-map approval. Its code also requires an operating budget with reserves where shared common infrastructure exists. Conversion within an existing planned development requires that association’s express written authorization. See Section 20.80.185(E)–(G).

Use the ownership documents to answer practical questions:

• Who may use each driveway, walkway, yard and parking space?
• Who pays for roofs, exterior repairs, fences, drainage and shared pipes?
• How will the owners approve work, collect money and resolve disagreements?
• What insurance covers common areas and facilities?

The city’s checklist calls for common-area insurance provisions and allocation of maintenance and utility costs. These are continuing responsibilities for both owners, including the seller who retains the main home.

Utility notification is also required for water, sewer, gas and electricity. The checklist contemplates bills paid individually or through the association; notification alone does not settle provider requirements for meters or service lines. See the San José checklist reproduced in this San Diego municipal packet, pages 45–46. Obtain a written service plan from each provider and identify any permits needed for utility separation.

As a hypothetical example, suppose a pipe serving the rear home crosses the front home’s exclusive-use yard. Ask the team to document repair access and payment responsibilities. Separate billing would not answer those questions.

5. Complete review, recording and addressing

The city’s parcel-map instructions, revised March 30, 2026, call for both Planning and Public Works checklists and their supporting documents. Public Works reviews completeness and provides payment information. Request the applicable fees and a project-specific schedule when submitting.

Coordinate recording with Public Works and the title team. The Planning checklist describes recording association bylaws and CC&Rs after the parcel map, while Section 20.80.185(F) places CC&R recording at or before map approval. Obtain written direction resolving that discrepancy before filing.

The completed ownership package includes the recorded parcel map, condominium plan, required consents and applicable association documents. The city then directs applicants to request a new ADU address using Form 302, identifying the finaled ADU permit and approved AB 1033 map application. The converted unit can no longer retain a “Unit X” designation. See the city’s final addressing step.

Budget for the conversion and prepare for sale

Request separate estimates for surveying and mapping, legal work, city review, title and recording, utility changes, insurance, and any financing changes. Keep the association’s ongoing budget separate from these transaction expenses. If the ADU is occupied, add tenancy and notice requirements to the attorney’s scope before planning a sale date.

Avoid adopting another project’s schedule. In its August 14, 2025 announcement, San José reported completing parcel-map review for the Josefa Street conversion in 60 days, excluding 29 days of applicant review. That was one project’s review history, not a guaranteed conversion or closing period. The announcement documented an approval, not a completed sale.

As you move into preparing property for sale, assemble a buyer packet with the recorded ownership documents, access and utility arrangements, insurance information, association budget and financing-related closing conditions. Have title and the transaction team confirm that the interest described in the listing matches the interest that can be conveyed.