Los Angeles Real Estate Laws That Changed: AB 1033, SB 9, Measure ULA, and More

California is already one of the most regulated real estate markets in the country. The last two years have added several significant new rules that every buyer, seller, landlord, and agent in Los Angeles needs to understand. Here is a clear breakdown of what changed and what it means for your next transaction.

AB 1033 — ADUs Can Now Be Sold Separately (Effective 2024)

Assembly Bill 1033 allows homeowners in participating California cities to sell their Accessory Dwelling Unit (ADU) as a separate condominium-style unit, independent of the main house. This is a major shift. Previously, an ADU and the primary residence had to be sold together as a single parcel.

For Los Angeles, the practical implications are significant: homeowners who built ADUs as rentals now have an exit strategy that doesn't require selling the whole property. For buyers, an ADU could be purchased as a primary residence at a more accessible price point in a neighborhood that would otherwise be out of reach. The mechanics require the municipality to opt in, so check current Los Angeles city and county participation status before structuring a deal around this.

SB 9 — The Duplex Law and Lot Splits

Senate Bill 9 allows most single-family homeowners in California to split their lot and build up to two units on each resulting parcel, creating the potential for four units on what was previously a single-family lot. This applies across most of Los Angeles, with some exceptions for historic districts, flood zones, and fire hazard areas.

Investors and developers have been paying close attention. The entitlement process is ministerial, meaning the city cannot deny a compliant application based on discretionary review. That removes a major risk factor that has historically slowed development in Los Angeles.

Los Angeles Mansion Tax (Measure ULA) — What You Need to Know

Measure ULA, which took effect April 1, 2023, imposes an additional transfer tax on property sales in the City of Los Angeles above $5 million. Properties selling between $5M and $10M are taxed at 4%, and properties above $10M at 5.5%. This is on top of existing transfer taxes and applies to all property types: residential, commercial, and industrial.

For high-end residential sellers in Los Angeles city limits, this is a material cost that should be factored into net proceeds calculations from day one of listing discussions. A $6M sale now carries an additional $240,000 in Measure ULA taxes alone.

Updated Rent Control and Just Cause Eviction (AB 1482)

California's tenant protection law AB 1482, originally passed in 2019, continues to shape the multi-family investment landscape in Los Angeles. Properties built more than 15 years ago are generally subject to annual rent increase caps (currently 5% plus local CPI, capped at 10%), and owners must have just cause to terminate tenancies. Understanding which properties are covered and which are exempt is essential before acquiring any multi-family asset in Los Angeles County.

Short-Term Rental Regulations — Los Angeles

The City of Los Angeles requires all short-term rental operators to register with the city and limits STR hosting to primary residences only. You cannot rent a non-primary investment property on Airbnb or similar platforms within city limits. Enforcement has increased significantly, and the City has the authority to fine unregistered operators and remove listings. If your investment thesis involves short-term rental income on a non-primary property in the City of Los Angeles, it needs revision.

What This Means for Buyers and Investors

These regulatory changes cut both ways. For investors who understand them, they create opportunity: ADU lot splits, development potential unlocked by SB 9, and a clearer picture of the rent control landscape for multi-family acquisition. For buyers and sellers who don't, they create expensive surprises at the closing table. Working with an agent who understands these rules before writing an offer is not optional in today's market.