SEC. 1316. SEPARATE SALE AND CONVEYANCE OF CERTAIN STATE MANDATED ACCESSORY DWELLING UNITS AND ASSOCIATED PRIMARY RESIDENCES.
§ 1316
This section allows property owners to subdivide and separately sell accessory dwelling units (ADUs) and their associated primary residences as condominiums, provided the ADUs meet state-mandated approval requirements and certain other conditions are satisfied. The process requires lender consent, safety inspection, and compliance with state condominium and subdivision laws, with additional protections for existing planned developments.
If you have an accessory dwelling unit (a small separate home on your property) that was approved under state rules, you may be able to sell it separately from your main house by creating a condominium. To do this, your property must have four or fewer existing units, the ADU application must have been submitted on or after May 1, 2025, and the ADU must be either detached from existing homes or newly built and approved under state rules. Before you can record the split, you need written permission from anyone who has a loan or lien on your property (like your mortgage lender), the ADU must pass a safety inspection, and you must notify your utility companies. If your property is part of a planned community with a homeowners association, you also need that association's written approval.
- Controversial:The requirement for lender consent gives lenders veto power over property subdivision plans, and the detailed notice about lender requirements (refinancing, collateral modifications, potential interest rate changes) touches on mortgage and lending practices that San Franciscans have varying views on.
- Complex:The section contains multiple cross-references to other Code sections and California law (Davis-Stirling Act, Subdivision Map Act), detailed technical requirements for condominium formation, and a lengthy notice with sub-provisions that make the overall rule structure difficult to follow.
AI-generated · claude-haiku-4-5 · informational only, not legal advice.
Official text
(a) Notwithstanding any other provisions of this Code, a subdivider shall be eligible to submit an application for separate sale and conveyance of Accessory Dwelling Units (“ADUs”) and associated primary residences that satisfy the requirements of this Section 1316 and/or include said ADUs in a condominium map application for a project approved pursuant to Planning Code Section 207.4. For purposes of this Section 1316, primary residence shall mean the whole of an existing or new residential structure or complex, which may contain one or more individual dwelling units. Applications under this Section 1316 shall be subject to the following requirements:
(b) Eligibility. ADUs are eligible for separate sale and conveyance under this Section 1316 if all of the following requirements are met:
(1) The lot proposed for subdivision contains four or fewer existing individual dwelling units.
(2) An application to construct the ADU was submitted on or after May 1, 2025.
(3) The ADU is either:
(A) constructed on a property containing an existing single-family dwelling or existing condominiums, and such ADU (i) is detached from the existing dwelling or condominiums; (ii) is approved under the City’s state-mandated, ministerial approval programs in Planning Code Section 207.2 or former Planning Code subsection 207(c)(6); and (iii) does not convert space within any existing structure; or
(B) constructed on a property containing a new proposed single-family home or new proposed condominium project, and such ADU is a newly-constructed, detached or attached ADU approved under the City’s state-mandated, ministerial approval programs in Planning Code Section 207.2 or former Planning Code subsection 207(c)(6).
(4) The unit is not a Junior ADU, as defined in Planning Code Section 102.
(c) All condominiums created from ADUs and associated primary residence under this Section 1316 shall be created pursuant to the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the California Civil Code).
(d) All condominiums created from ADUs and associated primary residence under this Section 1316 shall be created in conformance with all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410) of the California Government Code) and all objective requirements of this Code.
(e) Safety Inspection. Prior to the recordation of the condominium plan, a safety inspection of the ADU shall be conducted as evidenced either through a certificate of occupancy or a housing quality standards report from a building inspector certified by the United States Department of Housing and Urban Development.
(f) Lienholder Consent. Neither a subdivision map nor a condominium plan shall be recorded without each lienholder’s consent. A lienholder may refuse to give consent. A lienholder may also consent provided that any terms and conditions required by the lienholder are satisfied. Prior to recordation of the initial or any subsequent modifications to the condominium plan, written evidence of the lienholder’s consent shall be provided to the Assessor-Recorder along with a signed statement from each lienholder that states as follows: “[Name of lienholder] hereby consents to the recording of this condominium plan in their sole and absolute discretion and the borrower has or will satisfy any additional terms and conditions the lienholder may have.” A lienholder’s consent shall be included on the condominium plan or a separate form attached to the condominium plan that includes the following information:
(1) The lienholder’s signature.
(2) The name of the record owner or ground lessee.
(3) The legal description of the real property.
(4) The identities of all parties with an interest in the real property as reflected in the real property records.
(5) The lienholder’s consent shall be recorded with the Assessor-Recorder.
(g) Notice. The City shall include the following notice on any ADU submittal checklist or public information that describes the requirements and permitting for ADUs, and shall include the following notice as part of the conditions of any ADU building permit or condominium plan approval:
“NOTICE: If you are considering establishing your primary dwelling unit and accessory dwelling unit as a condominium, please ensure that your building permitting agency allows this practice. If you decide to establish your primary dwelling unit and accessory dwelling unit as a condominium, your condominium plan or any future modifications to the condominium plan must be recorded with the County Recorder. Prior to recordation or modification of your subdivision map and condominium plan, any lienholder with a lien on your title must provide a form of written consent either on the condominium plan, or on the lienholder’s consent form attached to the condominium plan, with text that clearly states that the lender approves recordation of the condominium plan and that you have satisfied their terms and conditions, if any.
In order to secure lender consent, you may be required to follow additional lender requirements, which may include, but are not limited to, one or more of the following:
(a) Paying off your current lender.
You may pay off your mortgage and any liens through a refinance or a new loan. Be aware that refinancing or using a new loan may result in changes to your interest rate or tax basis. Also, be aware that any subsequent modification to your subdivision map or condominium plan must also be consented to by your lender, which consent may be denied.
(b) Securing your lender’s approval of a modification to their loan collateral due to the change of your current property legal description into one or more condominium parcels.
(c) Securing your lender’s consent to the details of any construction loan or ground lease.
This may include a copy of the improvement contract entered in good faith with a licensed contractor, evidence that the record owner or ground lessee has the funds to complete the work, and a signed statement made by the record owner or ground lessor that the information in the consent above is true and correct.”
(h) Notice to Utility Providers. If an ADU is approved for separate sale or conveyance as a condominium, the property owner shall notify providers of utilities, including water, sewer, gas, and electricity, of the creation of the condominium and any separate conveyance.
(i) Additional Requirements for Projects in Planned Developments. The owner of a property or a separate interest within an existing planned development that has an existing association, as defined in Section 4080 of the California Civil Code, shall not record a condominium plan to create a common interest development under Section 4100 of the California Civil Code that includes an ADU authorized under this Section 1316 without express written authorization by the existing association. For purposes of this subsection 1316(i), written authorization by the existing association means approval by the board at a duly noticed board meeting, as defined in Section 4090 of the California Civil Code, and, if needed pursuant to the existing association’s governing documents, membership approval of the existing association.
(Added by Ord. 113-25, File No. 241069, App. 7/11/2025, Eff. 8/11/2025)
(Former Sec. 1316 added by Ord. 161-01, File No. 010891, App. 7/9/2001; amended by Ord. 203-02, File No. 021503, App. 10/11/2002; repealed by Ord. 281-04, File No. 041353, App. 12/1/2004)