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P24-0334 Planning Commission 6 of 7 Separate Conveyance of ADUs AB1033 allows the City to adopt an ordinance for the separate conveyance of ADUs. As noted, the City’s current ADU ordinance prohibits the primary unit and an ADU to be under separate ownership. This approach was in line with requiring owner-occupancy in either the primary unit or the ADU. Recent amendments to State law prohibit the City from requiring owner-occupancy on a property with an ADU; that is, the owner is allowed to rent out both the primary residence and the ADU. While owner-occupancy is unilaterally prohibited, the City has the option to implement AB1033 and allow for the separate sale of the two units, i.e., the principal unit and the ADU. In addition to requirements related to objective design standards in the Subdivision Map Act and conformance with the Davis-Stirling Common Interest Development Act, which is related to the formation of a Homeowners Association (HOA) for maintenance of common areas such as driveways or shared landscaping, the homeowner must notify providers of utilities (e.g., water, sewer, gas, electricity) of the condominium conveyance. The City reviews requests for condominium subdivisions via a parcel map, typically acted upon by the Zoning Administrator. If the Planning Commission were to recommend the City allow for the separate conveyance of ADUs, a similar process to the current one for parcel maps would likely be recommended by staff. Considerations for the Planning Commission related to separate conveyance of ADUs include whether or not this flexibility would result in a greater number of ADUs in the City and if the separate conveyance would function to encourage a larger number of homeowners to construct an ADU since a homeowner would benefit from the monetary gain by sale of the unit. State law acknowledges, however, that establishing an HOA between the principal unit and the ADU within a community which already has an HOA may not be ideal for implementation of the CC&Rs or administration of dues by the HOA. Accordingly, State law requires the property owner to obtain written permission from the HOA before forming the owners’ association for the principal unit and ADU prior to recordation of a condominium plan. Based on these concerns, and given the likely marginal benefit, limited applicability, and added administration on behalf of existing HOAs to allow separate conveyance of the principal unit and ADU, staff recommends the City consider deferring the consideration of an ordinance to allow separate conveyance until other jurisdictions similar to Pleasanton (i.e., with a large number of planned developments and active HOAs) adopt an ordinance, or until such time the City experiences a higher degree of interest or number of requests to allow separate conveyance. PUBLIC NOTICE Notification of this code amendment has been published in The Valley Times as an upcoming agenda item for the September 11, 2024, Planning Commission meeting. At the time this report was prepared, staff has not received comments regarding the proposed code amendments. Excerpt of September 11, 2024 Planning Commission Agenda Report