Has anyone sold an ADU separately as a TIC in Los Angeles?

Question

Hi all!

Interested to know if anyone has had any luck selling an ADU as a TIC in Southern California? Any feedback would be greatly appreciated!

Alex Kim · Answer

TIC is co-owning a property. So if you TIC an SFR w/ ADU,  you aren't selling the ADU itself - you can't anyway since ADU isn't an independent property/APN. You're selling ownership % to your new co-owner.

If the co-owner owns 30% of your property and decides to live in ADU and you live in SFR, who's going to stop that? That's a private agreement/arrangement between the co-owners. CA has struck down many cities that tried to prohibit TIC ownership in court.

I know this still sounds like you're "selling" the ADU but isn't. Selling is prohibited, and you really can't until subdivided.

Now if you want to finance, that's a different story. There would have to be no restriction on the title for title insurances to issue insurance for lenders.

Will Barnard · Answer

NO, you can not separate and sell an ADU from the single family or multi family zoned lot. It violates the state bills passed Jan 1, 2020.

Christian Nielsen · Answer

I believe it is possible to sell the ADU from the main residence (SFR or Multi-family), if you are a qualified non-profit creating low-income housing. Look up AB 587. It must be deed restricted and sold to qualified home buyers through a tenancy-in-common agreement.

I do not have any personal experience with this but I’m sure there are companies in Southern California that you could talk with.

Damaso Bautista · Answer

@Zabdiel Lugo

Funny! Someone is always trying to come up with a new way to make money. Hey like it!!

Pavan Sandhu · Answer

yea, you can't do that.

Has anyone sold an ADU separately as a TIC in Los Angeles?

Most Popular Reply