Colorado is Enabling a Pathway for the Separate Sale of an ADUs
For years in Colorado its been extremely difficult if not impossible to sell an Accessory Dwelling Unit (ADU) separately. You could sell the ADU with the overall property, but not individually which is key for developers who want to resell their investments. Its also a great way to provide more affordable housing than a standard stand alone single family home. So now ADUs can either be sold as a Condo or Lot split where zoning allows. Whether you are buying, selling or building this is exciting news for ADUS state wide! Call Krick Design Build if you want more information about selling your ADU.
Here is what the Colorado Department of Local Affairs is saying:
This strategy encourages the separate sale of an ADU, also referred to as ADU condominiumization or ADU condo conversion. This process allows an ADU to be split into a separately saleable condominium with distinct ownership, while remaining on the same parcel as the primary residence, meaning there is no actual subdivision of the land itself. The resulting for-sale ADU is a legally recognized, independent property with its own deed and ownership rights, managed under shared agreements and governance structures. By adopting an ADU condominiumization policy, an ADU Supportive Jurisdiction can help increase access to homeownership, wealth building, and ADU development.
Creates for-sale ADUs that are typically less expensive than primary homes in the same area.
Broadens access to homeownership and wealth generation through smaller, more affordable units. In particular, it can enable moderate-income buyers to enter the housing market, including in older, established neighborhoods.
Leverages existing residential properties to meet housing demands more efficiently.
Provides economic flexibility for homeowners by giving them the ability to sell or finance their ADU separately from the primary residence, unlocking equity and generating capital without needing to sell their entire property or to accrue rental income over time. For example, it can allow an elderly homeowner to convert his/her property, sell the primary residence to pay off debt, and remain mortgage-free in the condoized ADU.
Provides an option for larger, immediate financial returns on ADU development.
Can create increased property tax revenue because the ADUs are reassessed at market value upon sale.
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