Thinking about adding an ADU in Almaden or selling one you already have? With San José’s new ordinance, you may be able to sell an ADU as its own condominium. We know this is a big decision that touches title, taxes, financing, and timing. In this guide, you’ll learn what changed, how the process works in Almaden, and the practical steps to protect your plans. Let’s dive in.
What changed in San José
San José adopted a local ordinance that allows ADUs to be sold as condominiums through a parcel or condo map process. The change is part of Zoning Ordinance Update PP23‑007 and it took effect in July 2024. You can review the city’s update and process notes on the City of San José’s ordinance page for PP23‑007.
At the state level, AB 1033 gave cities the option to allow separate sale of ADUs as condos, but cities must set local procedures. A legal summary explains how AB 1033 ties ADU sales to the Subdivision Map Act and condominium rules under Davis‑Stirling. These changes build on statewide ADU reforms that simplified parking, fees, and owner‑occupancy rules, as outlined by the California Department of Housing and Community Development.
What this means for Almaden homeowners
Ownership and title
To sell an ADU separately, you must create a condominium interest through mapping and legal documents. Expect a parcel or condo map, a condominium plan, and recorded CC&Rs before a buyer can get title to the ADU. San José’s PP23‑007 points to parcel mapping as the path.
HOAs and CC&Rs
If your property is within an HOA, association consent is often required for conversion and sale. California law limits HOAs from unreasonably restricting ADUs on many single‑family lots, but condominium projects operate under stricter rules and document changes. An HOA‑law resource outlines these differences.
Permits and process
San José will coordinate ADU condo applications across Planning, Building, Public Works, and the County Recorder. The city is preparing application checklists, so start with Planning to confirm parcel‑specific steps and timing.
Property taxes in Santa Clara County
New ADU construction is typically assessed as new construction. The county adds the ADU’s value through a supplemental assessment without resetting your primary home’s base year value. The Santa Clara County Assessor explains this approach and when to expect a supplemental bill.
Utilities and separability
Buyers and lenders look for clear, practical separation. Separate meters are helpful, or you may need recorded agreements for shared services like water, sewer, gas, or electric. A risk‑management brief notes that utility coordination and notifications are part of many ADU processes.
Financing and market impacts
Buyer financing and appraisals
FHA updated its rules so lenders can count a portion of ADU rental income when qualifying buyers and follow ADU‑specific appraisal guidance. In some cases, up to 75 percent of estimated ADU rent may be used in underwriting, subject to program rules.
Condo project underwriting
Once an ADU becomes a condo, lenders underwrite the project, not just the unit. Insurance, reserves, and documentation standards apply, and some projects will not meet conventional loan criteria. Reporting on tightened condo lending shows why early lender conversations matter.
Value and demand
ADUs can add meaningful value in high‑cost markets, but pricing depends on quality, comps, and demand. A statewide owner survey from the Terner Center found a median ADU construction cost around $150,000 and Bay Area median ADU rent near $2,200 per month. Your Almaden value will ultimately follow local comps.
Common hurdles and timelines
Lienholder consent
If your primary home has a mortgage, your lender will likely need to consent to the parcel or condo map. This is a common gating item. A new laws summary highlights consent as a key step.
Tenant notices and protections
If your ADU or main home is tenant‑occupied, the Subdivision Map Act includes specific notices and timelines for condo conversions, including advance notice and possible rights of first refusal. You can review the tenant notice requirements in Government Code section 66427.1.
Insurance and documentation
Condo insurance and documentation standards have tightened in recent years. Project‑level insurance, reserves, and structural documentation can shape loan availability for buyers. Plan time to assemble complete condo documents.
A practical Almaden checklist
Use this quick plan to gauge feasibility before you spend on design or legal work.
- Confirm your path: verify that San José’s PP23‑007 rules apply to your parcel and ask Planning for the ADU condo submittal checklist.
- Review zoning and site: check ADU setbacks, size limits, and lot coverage for your property.
- Pull HOA documents: if applicable, review CC&Rs and ask the board about required approvals and any document amendments.
- Order a title report: identify all liens and contact your mortgage servicer about required consents.
- Call utilities: ask about separate metering or what shared‑service agreements are needed.
- Budget for mapping: plan for a survey, parcel or condo map, and recording fees.
- Draft condo docs: engage qualified counsel to prepare a condominium plan and CC&Rs consistent with Davis‑Stirling.
- Talk to lenders: confirm which loan programs could finance the ADU condo and what project approvals and insurance are required.
- Plan appraisal strategy: discuss local comps and ADU appraisal needs with your agent and appraiser.
- Track taxes and timing: expect a supplemental assessment on new construction and build tenant‑notice timelines into your schedule if occupied.
Is an ADU condo sale right for you?
Selling an ADU as a condo can unlock equity, attract entry‑level buyers, or create flexible estate‑planning options. It also adds steps: mapping, lender and HOA approvals, utilities, taxes, and project underwriting. If you want a clear read on feasibility and value in Almaden, our family team can help you weigh your options and craft a smart plan. Reach out to The Chiavettas for a neighborly conversation and a tailored strategy.
FAQs
Can I sell my Almaden ADU separately right away?
- Not immediately; you need a parcel or condo map, required consents, and recorded condo documents under San José’s PP23‑007 before a separate sale is possible.
How will an ADU affect my Santa Clara County property taxes?
- The ADU is usually assessed as new construction with a supplemental bill while your primary home’s base assessment stays intact under Prop 13 rules.
What if my property is in an HOA?
- Many planned developments cannot unreasonably restrict ADUs, but converting and selling an ADU as a condo often requires HOA approval and document changes.
Will buyers get financing for an ADU condo?
- Possibly; FHA allows some ADU rental income in underwriting, but lenders still apply condo project approvals and insurance standards that can limit options.
Do I need to notify tenants before converting to a condo?
- Yes, condo conversions trigger specific tenant notices and timelines under the Subdivision Map Act, including advance notice and possible purchase rights.
