Skip to content
Land & New Construction

User Stats

9
Posts
4
Votes
Zabdiel Lugo
  • Developer
  • Los Angeles, CA
4
Votes |
9
Posts

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

Zabdiel Lugo
  • Developer
  • Los Angeles, CA
Posted Jun 23 2020, 16:14

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!

User Stats

15,728
Posts
10,897
Votes
Will Barnard
Pro Member
  • Developer
  • Santa Clarita, CA
10,897
Votes |
15,728
Posts
Will Barnard
Pro Member
  • Developer
  • Santa Clarita, CA
ModeratorReplied Jun 23 2020, 17:41

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.

User Stats

464
Posts
143
Votes
Pavan Sandhu
  • Developer
  • Sacramento, CA
143
Votes |
464
Posts
Pavan Sandhu
  • Developer
  • Sacramento, CA
Replied Jun 26 2020, 20:32

yea, you can't do that.

BiggerPockets logo
Find, Vet and Invest in Syndications
|
BiggerPockets
PassivePockets will help you find sponsors, evaluate deals, and learn how to invest with confidence.

User Stats

655
Posts
899
Votes
Damaso Bautista
  • Rental Property Investor
  • Hawthorne, CA
899
Votes |
655
Posts
Damaso Bautista
  • Rental Property Investor
  • Hawthorne, CA
Replied Jun 27 2020, 18:50

@Zabdiel Lugo

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

User Stats

12
Posts
22
Votes
Christian Nielsen
Pro Member
  • Architect
  • Santa Cruz, CA.
22
Votes |
12
Posts
Christian Nielsen
Pro Member
  • Architect
  • Santa Cruz, CA.
Replied Jun 28 2020, 08:15

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.

User Stats

71
Posts
15
Votes
Alex Kim
  • Lender
  • Irvine, CA
15
Votes |
71
Posts
Alex Kim
  • Lender
  • Irvine, CA
Replied Jul 1 2020, 14:40

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.