Converting Accessory Dwelling Units to Condominiums in San Francisco
Converting Accessory Dwelling Units to Condominiums in San Francisco has become a growing trend among homeowners and investors. By turning an Accessory Dwelling Unit into a condominium, property owners can increase value, create a separately sellable unit, and expand housing options in one of the most competitive real estate markets in the country.
What is an accessory dwelling unit?
San Francisco Planning Code, defines an accessory dwelling unit, also known as an ADU, Secondary Unit, or In-Law Unit, as a dwelling that is “accessory to one or more other dwellings located on the same lot. The Planning Code defines “accessory” as “appropriate, incidental, and subordinate” to the lawful use, implying that each accessory dwelling unit is somehow less real or official than a “regular” unit. But from the standpoint of usage, there is no practical difference between and ADU and a regular dwelling unit. Accessory dwelling units can be completely disconnected and independent from the home or other apartments on the same property, and can have their own kitchens and bathrooms, and their own separate entrances. And people can live in an ADU without having any familial connection with the owner of the property or with the resident of any other unit.
What is the difference between an accessory dwelling unit and a regular dwelling unit?
In practice, there are two main differences between an ADU and a regular dwelling unit. The first important difference is that more permissive building and planning code requirements apply to accessory dwelling units, making possible to build or create an ADU where you could not build or create a regular unit. The second important difference is that special restrictions often apply to the sale and/or rental of an ADU.
What are the different types of accessory dwelling units? What is the difference between a detached ADU and an attached ADU?
San Francisco makes a distinction between detached and attached ADUs. Under the San Francisco Planning Code, an ADU is considered detached if it does not share a structural wall with any building containing a single-family home or regular dwelling unit.
What is a junior accessory dwelling unit?
The San Francisco Planning Code distinguishes between accessory dwelling units and junior accessory dwelling units, also known as a JADUs. The are three main differences between an ADU and a JADU. The first difference is that a JADU must be 500 square feet or less, while the size of an ADU is only limited based on the size and dimensions of the lot where it is built. The second difference is that a JADU must be contained entirely within the same structure as a single-family home, while an ADU can be a separate detached structure, or part of a structure containing multiple other dwellings. The third difference is that a JADU must either be owner occupied or adjacent to an owner-occupied home, while an ADU has no owner-occupancy requirements.
Is a housekeeping unit the same as an accessory dwelling unit?
A: Housekeeping units were permitted in San Francisco until 1969. Although housekeeping units are conceptually similar to ADUs, they are a legally distinct category and are not governed by the ADU laws discussed in this article. If you have a housekeeping unit and are interested in condo or TIC conversion, please contact us for further information.
Who can build or create an accessory dwelling unit?
San Francisco Planning Code Sections 207.1 and 207.2 list the requirements that must be satisfied to build an ADU or JADU, or to convert an existing illegal unit or other space to an ADU or JADU. These same Planning Code sections also determine how many ADUs or JADUs can be created on a particular parcel, and the size, dimension and location requirements for each accessory unit. A qualified architect or building permit facilitator can help owners determine whether they can create one or more ADUs or JADUs, how long it will take to get permission, and how much the work will cost.
Does San Francisco allow condominium conversions?
San Francisco law severely restricts condo conversion of existing residential units. Properties containing more than four residential units or homes cannot be converted to condominiums under any circumstances. Properties containing two, three or four units can only be converted if they satisfy owner-occupancy requirements, have clean tenant histories, and either win or bypass the annual condo conversion lottery. You can find detailed explanations of San Francisco’s condominium conversion laws here. Note that San Francisco’s condo conversion restrictions do not apply to TIC conversions, including TICs where each owner has their own loan. You can find detailed information on TICs here. San Francisco’s condo conversion restrictions also do not apply to new construction.
Is there a new law allowing conversion of accessory dwelling units to condominiums?
California law and San Francisco law used to prohibit condominium conversion of accessory dwelling units. But in 2023 California passed a new law, AB 1033, that enables local governments to allow condo conversions of ADUs. This year, San Francisco finally took advantage of AB 1033 to create its own ADU conversion law. San Francisco’s ADU conversion law took effect in July 2025.
Under what circumstances can ADUs be converted to condominiums in San Francisco?
Under the new accessory dwelling unit condominium conversion law, each of the following requirements must be satisfied for an ADU to become a condominium.
Permit Issuance Date: The building permit to building the ADU must have been issued on or after May 1, 2025. If the permit was issued before that date, the ADU cannot be converted to a condo.
Pre-ADU Use of Property: If the lot on which the ADU is constructed already had multiple residential units or homes that were not condominiums, then the ADU cannot be converted to a condo. The lot must either be empty (meaning the ADU and all other home and units are being built at the same time), have had only one single-family home, or have had two or more units that were already condominiums.
ADU Must Be Detached: When the ADU is added to a property with an existing home or condominiums, the ADU must be detached from the structure(s) containing the home or condominiums. As noted above, the ADU is considered detached if it does not share a structural wall. (The ADU may be attached to one or more other units if
all other homes and units are being built at the same time.)
Tenant Eviction History: The property to which the ADU is added must not have had a no-fault eviction of protected tenant evicted on or after May 1, 2005. Generally, a no-fault eviction means an eviction that is not based on an action of the tenant (such as non-payment of rent), but rather is based on the activities of the landlord (such as an owner move-in, a relative move-in, or a renovation). A protected tenant is one who is elderly, disabled, or catastrophically ill. For more details relating to how eviction history affects eligibility for converting an ADU to a condominium, contact us.
JADU Cannot Convert: A junior accessory dwelling unit cannot be converted to a condominium under any circumstances.
An additional restriction applies when the ADU receives its building permit under San Francisco Planning Code Section 07.1. In these cases, the ADU can only become a condominium if all other dwellings on the Property were already condos on July 11, 2013. This additional restriction does not apply when the ADU is approved under San Francisco Planning Code Section 207.2.
When one or more ADU is added to a property that previously contained one single-family home, condo conversion
under the new ADU conversion law will mean that the pre-existing single-family home also becomes a condominium.
How does the addition of an ADU affect the condo conversion eligibility of existing residential units?
As noted above, the new ADU conversion law does not apply where the accessory unit is added to existing residential units. Also as noted above, existing two-, three- and four-unit buildings are eligible for condominium conversion under other, older San Francisco laws. An intersection of the new and old conversion laws occurs when an ADU is added to an existing multi-unit property.
Can an ADU that does not meet the requirements of the new law still be converted under the older condominium conversion lottery or lottery bypass systems?
San Francisco law does not allow an ADU (or a JADU) to become a condominium through the conversion lottery or lottery bypass systems. Moreover, the presence of one or more accessory dwelling may prevent the regular units from qualifying for condo conversion under the conversion lottery or lottery bypass systems.
How does the existence of an ADU affect condominium conversion of a two-unit property under the lottery bypass system?
Normally, a two-unit building becomes eligible for condo conversion when each of its units is owner-occupied for one year. You can find additional details on two- unit condominium conversion rules here. But when a property has two dwellings plus an ADU, it may no longer be considered eligible to convert under the two-unit lottery bypass system. Whether or not this will occur is an open question, since San Francisco currently has not taken an official position. We are hopeful that the City’s final policy will allow the two pre-existing units to become two condominiums, with the ADU becoming part of one of the two condominiums.
How does the existence of an ADU affect conversion of a two-, three- or four-unit property under the lottery conversion lottery system?
Normally, a 2-4 unit building can qualify for condominium conversion if all but one of its units are owner-occupied and it wins the annual condo conversion lottery. You can find additional details on condominium conversion lottery rules here. But it remains unclear how the presence of one or more ADU will affect the total unit count for the purposes of determining lottery eligibility. We are hopeful that the City’s final policy will determine eligibility based on the number and owner-occupancy status of the regular units, and that when a building wins the lottery each ADU will become part of one of the other condominiums.
Can an accessory dwelling unit be part of a TIC conversion?
Tenancy in common (also known as TIC) is a form of shared ownership where each owner has the exclusive right to use or rent out a particular unit. In most modern TICs, each owner has their own mortgage. You can find additional details on TIC conversion and ownership here. All properties containing ADUs can be converted and owned as TICs, and TIC lenders will finance a TIC interest that holds the right to an accessory dwelling unit. A TIC can also be formed within a condominium project when one or more of the condominiums consists of both a regular unit and an ADU.
How long does it take to convert an ADU to a condominium?
The San Francisco Department of Public Works, also known as DPW, is currently taking 9-12 months to process condominium subdivision applications, and this same time frame is likely to apply to ADU conversion applications. Processing time varies significantly based on the number of applications being submitted and DPW staffing levels.
Is it possible to apply for permission to convert an ADU to a condominium before the ADU is completed?
A condominium subdivision application for an ADU conversion can be submitted at the same time as the building permit application for creating the ADU.
How much does it cost to convert an ADU to a condominium?
A: The DPW application fees for condominium conversions vary slightly based on the number of units being converted, but are currently about $14,000. A building inspection is also required, and the approximate cost of that is $3,700. You will also pay for a land surveyor to prepare drawings, and for an attorney to prepare legal documents and, optionally, to assist with the conversion application. For these costs, please contact us.
How can SirkinLaw help me convert my ADU to a condominium?
SirkinLaw has been handling condominium conversions for more than 30 years, and has handled significantly more San Francisco conversions than any other law firm. Our breadth of experience makes it likely that if a glitch appears in the condominium conversion process, we will have seen something similar before and know exactly what to do. And for those rare occasions when a completely new issue arises, we are the recognized masters at developing creative solutions that save our clients time and money.
Experience has taught us that the most important things to our clients are the immediate availability of staff to answer client questions and diligence in following the process of governmental approval. To ensure we achieve these goals, we have a full-time team devoted to client contact, preparation of subdivision applications, and monitoring subdivision approvals. Our team maintains a direct-access telephone line and can be reached easily any weekday to discuss the status of a conversion or subdivision process. And for those occasions when you need to speak with an attorney, Rosemarie MacGuinness is committed to being available to you when you call or within the next 24 hours. Rosemarie is known for her diligence in calling clients back quickly, and is more committed than ever to being easily reached.
But while processing the condominium conversion or subdivision quickly and efficiently may be our client’s most immediate priority, the governing documents (the Declaration of Covenants, Conditions and Restrictions, or “CC&Rs” supplemented in some cases by Bylaws and/or Articles) will have much greater long-term impact. The quality of the governing documents will directly affect the quality of life of the owners, as well as their ability to refinance and sell.Andy Sirkin was co-author of 10 editions of The Condominium Bluebook, and his expertise in preparing condominium governing documents is recognized throughout California. SirkinLaw APC governing documents continue to be the ones other firms emulate, and Realtors, lenders and buyers strongly prefer. This leadership results from constant improvement and innovation that makes our documents easier to read and understand, as well as more efficient and less expensive to enforce.
We offer general consulting and advice on condo conversion issues, and can provide as much or as little support as desired during the conversion process. We have flat fee programs for both a full-service conversion and for providing only condominium legal documents. Contact Rosemarie for further information via phone at 415-839-6406 or email at rosemarie@andysirkin.com.