AB-130: The Law That’s Making Bad HOAs Panic in California

In June, California enacted AB-130, legislation that amended portions of the Davis-Stirling Common Interest Development Act and affected how homeowners associations may impose and collect certain fines. For years, many HOA disputes have involved allegations of excessive fines, limited procedural protections, and disputes over enforcement authority. AB-130 modifies existing law in ways that place additional statutory limits on HOA enforcement practices in California.

This legislation represents a policy shift by the Legislature toward increased procedural protections for homeowners, particularly in the context of monetary penalties imposed by associations.

What Is AB-130?

AB-130 is a California statute passed in 2024 that amended sections of the Davis-Stirling Act governing monetary penalties and enforcement procedures. The law focuses on limiting certain fines and fees and clarifying procedural requirements that must be satisfied before an HOA may impose discipline.

While the bill does not eliminate HOA enforcement authority, it places clearer boundaries on how fines may be structured and collected under California law.

The bill addresses three primary areas:

- A statutory cap on certain HOA monetary penalties.
- Restrictions on interest and late charges tied to disciplinary fines.
- Clarified procedural requirements before fines may be imposed.

Monetary Penalty Limits Under AB-130

Prior to AB-130, associations often relied on their governing documents to set escalating fine schedules. In some cases, homeowners challenged those fines as unreasonable or improperly imposed.

AB-130 places a statutory limit on certain disciplinary fines, generally capping a single violation at $100, subject to the specific circumstances and statutory exceptions outlined in the Davis-Stirling Act.

Practical effect:

- Associations are more limited in using escalating fines for the same violation.
- Monetary penalties must align with statutory limits, not just governing documents.
- Enforcement strategies relying heavily on cumulative fines face greater scrutiny.

Interest and Late Charges on HOA Fines

AB-130 restricts the imposition of interest and late fees associated with disciplinary fines. Historically, some associations added additional charges when fines went unpaid, which increased the total amount owed.

Under the amended statute:

- Disciplinary fines are not intended to accrue interest in the same manner as assessments.
- Late fees tied specifically to fines are limited by statute.

This distinction reinforces the separation between assessments, which fund the association, and disciplinary penalties, which are regulatory in nature.

Procedural Requirements Before Fines Are Issued

A key component of AB-130 is its emphasis on procedure. The law reinforces that associations must follow specific steps before imposing discipline.

Under the statute:

- Homeowners must receive written notice of the alleged violation.
- The notice must provide an opportunity to be heard.
- Any hearing must be conducted by the board in accordance with statutory requirements.

These provisions codify procedural protections that are frequently at issue in HOA enforcement disputes.

Why the Law Has Changed HOA Enforcement Practices

AB-130 reduces the flexibility associations previously relied upon when structuring fine schedules and collecting penalties. Boards must now ensure that enforcement policies comply not only with their governing documents, but also with updated statutory limits.

As a result:

- Enforcement actions are more likely to be challenged if procedures are not followed.
- Monetary penalties receive greater scrutiny.
- Associations must rely more heavily on compliance-based solutions rather than financial pressure.

AB-130 in the Broader Context of California HOA Regulation

AB-130 fits within a broader trend in California of increased legislative oversight of common interest developments. The Legislature has periodically amended the Davis-Stirling Act to address perceived imbalances between association authority and homeowner protections.

This law does not eliminate HOA enforcement power, but it reflects a policy choice to impose clearer statutory guardrails on that authority.

Practical Considerations for Homeowners

Homeowners dealing with fines or enforcement actions may wish to:

- Review their association’s enforcement policy in light of statutory changes.
- Maintain written records of notices, hearings, and communications.
- Monitor whether disciplinary procedures align with Davis-Stirling requirements.

Understanding how AB-130 interacts with existing governing documents is often a threshold issue in HOA disputes.

When HOA Disputes Continue

Even with statutory changes, disagreements over enforcement, fines, and procedure still arise. Disputes often turn on whether an association complied with statutory notice requirements, followed its own rules, and stayed within legally permissible penalty limits.

Laws affecting HOAs are only effective when properly applied, and disagreements about compliance frequently become the subject of formal dispute resolution or litigation.