SB 9 Explained for Real Estate Agents

SB 9 Potential in California Real Estate

As a real estate professional in California, you’ve likely seen "SB 9 Potential" popping up in MLS remarks. With 20+ years helping California agents and students navigate compliance at ADHI Schools, I have seen how new laws create both massive opportunity and significant professional landmines.

The Danger:

Marketing SB 9 as a "guaranteed" four-unit build. If a buyer closes based on your marketing, only to find the city rejects the permit due to local objective standards or utility constraints, you—and your broker—could be in the crosshairs.

Legal Disclaimer:This guide is for informational purposes only and does not constitute legal or land-use advice. SB 9 implementation varies significantly by local jurisdiction. Always advise clients to verify feasibility in writing with the local planning department and qualified land-use counsel.

FAST ANSWER: What is SB 9?

Senate Bill 9 (SB 9) provides a ministerial pathway for homeowners to subdivide a single-family lot (Urban Lot Split) or build up to two primary units on one lot. While it limits local discretionary review, projects must still meet "objective standards" and specific eligibility criteria.

Agent Note: Never guarantee approval; always verify site-specific feasibility in writing with the city.

SB 9 Eligibility: The Quick Screen

Before you spend hours on a property, run these four checks. If any of these "Red Flags" appear, the project may be ineligible under state or local rules.

• Zoning: Is it a single-family residential zoning designation (e.g., R-1, RS, etc.)?
• Location: Is it in an "Urbanized Area" or "Urban Cluster"? Verify this on the local agency’s SB 9 eligibility map.
• Tenancy History: Hard-stop restrictions apply if the property was occupied by a tenant in the last 3 years. Generally, SB 9 cannot be used to alter or demolish tenant-occupied housing. Refer to Rent Control Laws in California (Agent Guide) to evaluate displacement risks.
• Ineligible Sites: Sites in very high fire hazard severity zones, floodways, or earthquake fault zones often trigger ineligibility. Treat these as red flags requiring written confirmation from the city. See Environmental Regulations California Agents Should Know for more on these overlays.

What SB 9 Actually Does (Agent Translation)

To advise clients safely, you must distinguish between the two separate pathways provided by the law.

1. Urban Lot Split (Gov. Code § 66411.7)

• The "40/60" Rule: Per state statute, the split must result in two lots where the smaller lot is at least 40% of the original lot's size. Both newly created parcels must be at least 1,200 square feet, unless a local ordinance allows smaller.
• Owner-Occupancy: State law requires an applicant to sign an affidavit stating they intend to occupy one of the units as a principal residence for at least three years. Exception: This requirement does not apply to "community land trusts" or "qualified nonprofit corporations."

2. Two-Unit Development (Gov. Code § 65852.21)

• The "800 Sq. Ft." Rule: Local objective standards generally cannot be applied in a way that would physically preclude the construction of at least two units that are at least 800 square feet each. This is a "backstop" against restrictive local standards, not a guarantee that every lot can accommodate this size.
• The Unit Cap: In practice, many jurisdictions treat the total unit count (including ADUs and JADUs) as capped at four across the original lot footprint. If a lot already has an ADU, your client’s SB 9 potential may be limited—verify local implementation.

SB 9 vs. ADU: Why Clients Get Confused

Agents risk misrepresentation claims when they conflate these two very different permit paths.

• Primary vs. Accessory: SB 9 units are "primary" dwellings; ADUs are "accessory."
• Separate Sale: SB 9 units can potentially be sold separately if a lot split is recorded and ownership is structured appropriately—verify with counsel. ADUs generally cannot be sold separately. (Learn more: California ADU Laws Explained).
• Parking: While state law limits parking requirements to 1 space per unit, multiple local waivers apply—verify the city’s specific SB 9 standards.
• Setbacks: State law generally allows a local agency to require up to 4-foot side and rear setbacks (Gov. Code § 65852.21), but no setback is required for existing structures rebuilt in the same footprint.



Marketing & Liability: How to Talk About "Potential" Safely

The "Do vs. Don't" Table

Don’t Say (High Risk)	Do Say (Compliance First)
"Approved SB 9 Lot Split"	"May qualify for SB 9; Buyer to verify with city."
"Guaranteed 4-Unit Build"	"Check local unit-count caps for SB 9 + ADU."
"Split Ready / No Restrictions"	"Subject to local objective standards & affidavits."

Pro-TipDo not use the words approved, guaranteed, by-right, or split-ready unless you have a written planning confirmation or city-stamped approval in your hand.

Verification Artifacts (The "Agent File" Checklist)

• Written email confirmation from the Planning Department regarding the specific APN.
• Preliminary Title Report highlighting any private CC&Rs (SB 9 does not automatically override private restrictions).
• "Will-Serve" notes from utility providers (water/sewer/power).
• Seller-signed tenant history declaration.

Real-World Scenarios

• The Unrecorded Access: A listing marketed "SB 9 split potential." The buyer discovered the "back lot" had no legal frontage and the neighbor refused an easement.

  • Agent Fix: Check for Water Rights & Easements in California Real Estate and ensure legal access is recorded on title. Document in file: Preliminary Title Report.

• The Utility Capacity Halt: An investor bought a lot for a duplex build. The water district denied new meters due to infrastructure limits.

  • Agent Fix: Always include "will-serve" verification in your buyer's due diligence.
    Document in file: Water District written response.

• The Tenant Surprise: A seller failed to disclose a roommate who paid rent. The city denied the permit because the property wasn't "tenant-free" for the required 3-year lookback.

  • Agent Fix: Document in file: Signed seller declaration regarding tenancy.

Frequently Asked Questions

Can I list "SB 9 potential" if there are HOAs?

SB 9 does not explicitly override private CC&Rs. Treat HOA/CC&Rs as a major red flag requiring attorney review before you market the project as feasible.

What kills SB 9 feasibility most often?

High-fire hazard zones, unrecorded easements, and the 3-year tenant occupancy rule are the most common "deal killers."

Is owner-occupancy always required?

For an Urban Lot Split, yes—a 3-year affidavit is required (Gov. Code § 66411.7(g)(1)), unless the applicant is a community land trust or qualified nonprofit. For a Two-Unit Development (no split), many cities do not require it.

Your Compliance Playbook

Navigating California land use requires more than just reading a headline. This article is part of our California Real Estate Laws & Compliance Guide, designed to be your professional compliance playbook.