A New Law and Its Impact on Homeowners Associations

Introduction to the Problem

Jinah Kim’s HOA said she couldn’t fix a doorway inside her condo. She did it anyway. She figured it was fine. After all, the doorway was completely inside her home, separating an office and dining room. But when the complex’s manager peeked into her place through the open garage door one day in March and saw the renovation, she received a notice the next day. The privacy intrusion was shocking, but the cost of noncompliance was even worse: a single $100 fine at first, then up to $500 per day — $3,500 per week — starting July 10 until she changed the doorway back.

The New Law

But on July 1, when Gov. Gavin Newsom signed Assembly Bill 130 into law, her HOA nightmare vanished with the stroke of a pen, and her fee for defiance was capped at $100. “It’s a game changer,” Kim said. “For years, HOAs have been able to bend entire communities to their will on a whim. This stops that.” Before and after photos of Jinah Kim’s doorway. The blocked doorway on the left was in compliance with her HOA. The renovated doorway on the right was out of compliance. (Jinah Kim)

Impact on the HOA Industry

Industry experts and HOA lobbyists were taken by surprise in June when Newsom pushed AB 130 through the state Legislature and signed it into law — not because it passed, but because it included a last-minute update redefining HOA law in California. The overall goal of the bill is to expedite housing by easing California Environmental Quality Act regulations for many projects, but it also amends the Davis-Stirling Act, the framework that governs homeowners associations. The biggest change? HOA fines are now capped at $100 per violation unless there are health or safety impacts. Want to paint your house neon green? $100. Erect a giant Halloween skeleton on your front lawn year-round? $100.

Details of the New Law

The bill also bans interest and late fees on violations and prohibits HOAs from disciplining homeowners as long as they address violations before the hearing. It allows homeowners to request internal dispute resolution if they don’t agree with the board’s findings at hearings. Overview of Shadow Ridge at Oak Park condominiums. (Al Seib / For The Times)

Reaction from the HOA Industry

It’s a massive win for disgruntled homeowners, who have long claimed that California HOAs are too aggressive, stringent and overbearing. It’s a startling blow for HOAs, which were left blindsided by the changes. Dyanne Peters, an attorney with Tinnelly Law Group who practices HOA law, said her firm was tracking the legislation, but in a different bill. The HOA language was originally part of Senate Bill 681, a housing bill authored by state Sen. Aisha Wahab (D-Hayward). Peters said HOA lobbyists were making headway negotiating the bill and coming to a mutual agreement, but on June 27, the HOA language from SB 681 was added into AB 130 and passed three days later, leaving the HOA industry reeling.

Potential Consequences

Peters said no one likes paying fines, but noted that fines aren’t a money-making tool for HOAs. Instead, they’re used as deterrents for actions that disrupt communities. For example, if a neighborhood doesn’t allow homes to be used as short-term rentals such as Airbnbs, but a homeowner shirking the rules only has to pay $100 one time, they’ll probably just pay the fine and keep renting out their home. Or if a resident wants to build a huge fence but doesn’t want to deal with the architectural approval process, they’ll just eat the $100 and build whatever they want. “It’s frustrating because these new rules are handcuffing homeowners associations,” Peters said. “It takes away the ability for HOAs to govern their own communities. Clients are calling us asking, ‘What’s the point?’”

Exceptions to the New Law

However, the bill added a lifeline for HOAs by specifying that fines can be greater than $100 if they “result in an adverse health or safety impact on the common area or another association member’s property.” Peters said associations should go through their current rules and see which could be health or safety violations, and then adopt resolutions that specify in writing that certain actions, such as speeding or having aggressive pets, have health or safety impacts and therefore qualify for fines greater than $100.

Homeowner Reactions

Luke Carlson, an attorney who represents homeowners in HOA disputes, called the bill a “long-overdue course correction.” “AB 130 is more than a law — it’s a signal that Sacramento is finally starting to hear the voices of homeowners who’ve suffered in silence for too long,” said Carlson, who authored the book “Bad HOA: The Homeowner’s Guide to Going to War and Reclaiming Your Power.” Carlson said HOAs in Southern California are uniquely aggressive because of soaring home prices. Property values are high — and so are the stakes for maintaining a problem-free community that keeps those values high.

Conclusion

In conclusion, the new law has brought significant changes to the way HOAs operate in California. While it may be seen as a win for homeowners, it also poses challenges for HOAs in governing their communities. As the industry adjusts to these changes, it will be important to monitor the impact and make adjustments as necessary.

FAQs

What is Assembly Bill 130?

Assembly Bill 130 is a new law that amends the Davis-Stirling Act, which governs homeowners associations in California. It caps HOA fines at $100 per violation unless there are health or safety impacts.

How will the new law affect HOAs?

The new law will limit the ability of HOAs to impose fines on homeowners, potentially leading to a decrease in the effectiveness of HOAs in governing their communities.

Are there any exceptions to the $100 fine cap?

Yes, fines can be greater than $100 if they result in an adverse health or safety impact on the common area or another association member’s property.

What should HOAs do in response to the new law?

HOAs should review their current rules and adopt resolutions that specify which actions have health or safety impacts and therefore qualify for fines greater than $100.

How will the new law affect homeowners?

The new law will provide relief to homeowners who have been subject to excessive fines and penalties by their HOAs. It will also give homeowners more freedom to make changes to their properties without fear of retaliation from their HOA.