About Senate Bill 9 (SB 9)
Senate Bill 9 (“SB 9”) is a state law that passed in 2021 that gives homeowners in California the right to split their existing property and create a new legal parcel with their unused space.
Once split, homeowners can sell their new parcel separately from their existing home receive $150k - $1M.
SB 9 Frequently Asked Questions
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There is no jurisdiction size minimum that can be enforced with SB9 but the new lot must be between 40%-60% of the original size. For example, if your existing lot is 7500 sf, the minimum new lot size is 3000 sf.
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Yes! If you have a have a standard Fannie/Freddie/FHA mortgage as long as your mortgage balance is less than 60% of the final appraised value of your property after the split, you are not required to make a paydown on your mortgage.
If your balance is projected to be greater than 60% you can still proceed with the lot split, your options are:
Payoff your mortgage out of pocket (prior to recording/sale) to achieve 60% LTV
Keep both properties secured by your mortgage and refinance your mortgage once you sell the new lot
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Generally the lot split substantially increases your combined property value, however we typically assume the existing property will lose 5%-15% of its existing value
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Any homeowner with property in a single-family residential zone may qualify, provided the property meets certain criteria, such as not being in environmentally sensitive or historic areas. Contact Newbound today to see if your property qualifies!
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A lot split divides a single property into two smaller lots. Building additional units involves constructing up to two new housing units on an existing lot without splitting it. Homeowners can choose one or both options, depending on their goals and the property’s size.
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Yes. Units created under SB 9 can be rented out, but they cannot be used as short-term rentals (e.g., Airbnb).
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SB 9 streamlines the process but still requires projects to comply with certain local design and building standards. However, local governments cannot deny qualifying SB 9 projects solely due to zoning restrictions.
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Yes, for lot splits, homeowners must sign an affidavit stating they will live on the property for at least three years after the split.
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No. Properties located in designated historic districts or those listed as historic landmarks are excluded from SB 9 eligibility.
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Properties governed by HOAs may face additional restrictions. While SB 9 is a state law, your HOA rules may limit or prevent you from pursuing a project, depending on the bylaws.
