AB 130 FAQ

Following the surprise enactment of Assembly Bill 130 (“AB 130” or “Bill”), late on June 30, 2025, and effective immediately, we have been contacted by numerous clients and colleagues asking what it means and how to comply with the new limitations on fines. To assist and help guide our clients, we have prepared this AB 130 FAQ to answer the most common questions we have been asked about the new law.

What is AB 130?

The legislature passed immediate amendments to California Civil Code Sections 5850 and 5855, enacted through AB 130, which Governor Newsom signed into law. The language amending Sections 5850 and 5855 was added to AB 130 just days before the law was enacted, catching everyone by surprise. Unlike many legislative bills that largely affect our industry, AB 130 did not go through the normal legislative process. The Bill was not assigned to any legislative committees and, unfortunately, the public did not have the normal opportunity to comment on the proposed language after it was inserted into the Bill.

Why is the law effective immediately?

Although the amendments to Sections 5850 and 5855 have no fiscal impact on the state budget, they were inserted into a bill that was adopted as part of the state budget process. We do not know nor fully understand how Senator Wahab (D-Senate District 10), who introduced this language, was able to have it inserted into a budget-related bill. However, it does not seem appropriate for the language to have been included, especially since it did not go through the normal legislative process or allow for public comment. Due to the nature of the legislative process, in order for the State to continue operating with a budget on July 1st, all budget-related bills were required to be passed and signed by the Governor by midnight on June 30, 2025. As a result of being included in AB 130, the amendments to Sections 5850 and 5855 were effective immediately.

What does the new law do?

Limitation on Monetary Penalties:

With the amendments to Section 5850, fines are capped at the lesser of the association’s stated fine schedule or $100 per violation. The only exception is when the violation may result in an adverse health or safety impact on the common area or another association member's property. In those cases, fines may exceed $100. However, to impose a health and safety related fine in excess of $100, the board must make a written finding specifying the adverse health or safety impact of the violation in a board meeting open to the members.

No Late Charges:

Members cannot be charged late fees or interest on fines.

Opportunity to Cure Violations:

Changes to Section 5855 provide that members are given the opportunity to cure any violation prior to the hearing and avoid any discipline for violating their association’s governing documents. Furthermore, the board may not impose discipline if curing the violation would require more time than the period between the notice of the hearing and the hearing itself and if, prior to the hearing, the owner makes a financial commitment to cure the violation.

Internal Dispute Resolution:

If the board and the member are not in agreement after the hearing, a member shall have the opportunity to request internal dispute resolution. If, after the meet and confer, the board and the member agree on the matter, the board must draft a written resolution, and both the board and member of the dispute must sign it. The signed resolution binds both the association and the member, and is judicially enforceable as long as it is not in conflict with the law or the association’s governing documents.

Notification of Discipline:

The period to provide written notification of any imposed discipline or monetary charges (i.e., fies) is reduced from 15 days to 14 days.

What about fines levied prior to July 1, 2025?

The law is not retroactive. Therefore, we believe that fines levied prior to July 1st, where the notice of hearing results was also mailed to the owner prior to that date, are effective and nothing further is required for those fines to comply with the law.

It is unclear whether fines levied prior to July 1, 2025, but for which a notice of hearing results was not sent prior to that date, are subject to the $100 fine cap. While we believe that fines levied prior to July 1st are permitted to exceed the cap, associations may want to reschedule hearings where the notice of hearing results was not mailed to the owner prior to July 1st, to ensure compliance with the new requirements and avoid potential challenges or confusion.

Do we need to revise our fine and enforcement policy or cancel any hearings?

No. There is no requirement that the association revise its policies or delay any hearings. The law is clear that an association can levy a fine of $100 or the amount stated in the schedule of fines, whichever is less. That implies that the schedule of fines can have amounts listed that exceed the $100 max fine per violation, but the association just cannot levy a fine greater than $100 per violation. The one circumstance in which an association may want to revise its policies is if the governing documents do not define what constitutes a “violation,” and the association wants to define what is a “violation” in a manner that may allow for fines each day that a breach of the governing documents remains uncured. If an association’s policies already define what a violation is, there may be no need to revise them at all.

Are daily fines permitted?

The amendments to Section 5850 state that the $100 fine cap is per violation. Therefore, daily fines are not permitted. However, what constitutes a “violation” is not addressed in the law. Associations should consider revising their fine and enforcement policies to eliminate ambiguity and expressly state that each day a violation remains uncured constitutes a separate violation subject to a distinct fine. In using this approach, the notice of hearing should identify each day the noncompliance as a separate violation, with the date of each violation clearly stated. At the hearing, the board should consider each item and decide and issue a fine (if appropriate) for each violation. Keep in mind that if the violation is cured by the date of the hearing (including health or safety related violations), or if the violation is of a nature that could not be cured by the time of the hearing and the owner has entered into a financial commitment to cure the violation, the owner cannot be fined, and no disciplinary action may be taken.

What about damage to the common area? Are reimbursement assessments still permitted?

Damage to common area is not addressed by a fine, but rather by levying a reimbursement assessment. None of the changes to Sections 5850 or 5855 address or create any limitations on reimbursement assessments.

Can associations recover attorney fees or other costs related to enforcement?

While attorney fees are recoverable in a lawsuit, expenses incurred for attorney demand letters are not. With the deterrent effect of fines being removed, associations are going to have to engage legal counsel more frequently to enforce the governing documents. This will result in increased costs for associations and, ultimately, in higher assessments for owners, making already expensive housing even more expensive. Associations should consider working with counsel to amend their governing documents to clearly allow for pre-litigation reimbursement of enforcement-related costs. These may include not only attorney fees, but any fees or costs charged by management related to enforcement.

What about escalating or ladder-based fine schedules?

The law is clear that the maximum fine is $100 per violation. Escalating or ladder-based fines where the fines increase until the violation is cured are not permitted.

Can fines for short term rentals exceed $100 per violation?

No. However, as stated above, associations should consider adopting a clear definition of what constitutes a “violation,” including whether each day a noncompliance remains uncured may be treated as a separate violation. Even then, the maximum fine is still capped at $100 per violation, and any such fines will likely be absorbed as a cost of doing business or passed along to the renter.

Can all violations be “cured”?

There is a question regarding if violations of governing documents such as short-term rentals or nuisances related to noise (think loud parties) can be cured by the time of the hearing or if an association can levy fines for past conduct. The damage caused by these types of violations has occurred (the disruption of other's quiet enjoyment of their property), and the fact that it is not happening at the time of the hearing does not "cure" that issue. Associations should consult their counsel on how to address these types of violations to determine if fines can be levied even in circumstances where the behavior that caused the violation is not occurring at the time of the hearing. In many cases, the most effective form of enforcement may not be levying a fine but seeking injunctive relief against the owner to prevent future short-term rentals in violation of the governing documents

What constitutes “health and safety” violations that would allow fines in excess of $100?

Under the new law, fines may exceed $100 if the violation “may result in adverse health or safety impact on the common area or another association member’s property. Generally, the courts consider "health and safety" in terms of the well-being and protection of individuals from harm. In the context of homeowners associations, "health and safety" could pertain to maintenance issues or violations affecting the structural integrity of common areas or individual units, which might pose a risk to residents. Some additional possible examples could include parking in areas that limit visibility for vehicles as they drive by the area, parking in fire lanes, or any action or condition which exposes people to risk of harm. Associations should consult with counsel to determine if a specific type of violation constitutes a risk to health and safety not subject to the $100 limitation on fines.

Does the Board have to hold a hearing on a “health and safety” violation in open session?

No. The board has to make a finding that violations of the type being considered create a “health and safety” risk. A board can still hold a hearing in executive session and then make the determination on whether the type of violation at issue creates a health and safety risk in open session. Doing so does not require any identification of the owner. In addition, a board could potentially adopt a resolution identifying a list of certain types of violations as those that constitute health and safety risks not subject to the cap on fines. The resolution should indicate it is not an exclusive list of health and safety issues, and each violation may be considered on its own merits.

Will revoking owner privileges such as pool use and other amenities still be allowed for noncompliance?

Yes. An association may impose discipline in addition to levying a fine. However, if the violation has been cured by the time of the hearing, no discipline can be imposed, including suspension of membership privileges.

How can we voice our concerns about this law?

You can contact your legislators and the Governor by phone and email to express any concerns about this new law and its impact on your community. To find contact information for the Governor and your state representatives, please visit: www.gov.ca.gov/contact/ and https://findyourrep.legislature.ca.gov.

Conclusion

We recognize that some of these changes are significant and will limit an association's ability to deter violations with fines. However, boards must continue efforts to enforce the governing documents through all available means. Enforcement efforts should include requesting that a member participate in a meeting with the board through the association's internal dispute resolution process; sending letters from legal counsel advising the owner of the violation; proposing alternative dispute resolution, such as mediation; and, where appropriate, filing a civil action seeking an injunction to require compliance and recover attorney fees. Boards and managers should also consult with counsel to determine if updates to the association's fine and enforcement policy are warranted to align with the new law, along with any additional suggestions to enhance the association's ability to enforce its governing documents.