AUTHOR / PHIL WAHLQUIST, ESQ., ROSEMAN LAW, APC
This article first appeared in the CAI California North Chapter, The Voice Magazine, Fall 2025 Issue.
On June 30, 2025, California Governor Gavin Newsom signed AB 130 into law. As relevant for community associations, AB 130 amended California Civil Code §§ 5850 and 5855. Unlike other pieces of legislation impacting community associations, AB 130 was tied to the state budget and thus took immediate effect and was in force as of July 1, 2025. This legislation introduces significant changes to how community associations may impose fines for violations of their governing documents. While the over- arching goal of the legislation is to address housing affordability, it directly limits the authority of association boards to use monetary fines and other discipline as mechanisms to gain compliance with their community association’s governing documents.
Below is an outline of the key changes to California law brought about by AB 130 and a discussion regarding how community associations should respond to the same.
AB 130’S MAJOR CHANGES
1. Most Association Fines Are Capped at $100
As a result of AB 130, the maximum fine an association can now impose for a violation of its governing documents is $100, unless the violation poses an “adverse health or safety impact.” In such cases, a board may levy a fine in excess of this $100 threshold, provided the violation could harm the common area or another member’s property. To impose a fine exceeding $100 via this exception, the board must adopt a written finding in an open board meeting, detailing the specific health or safety risk presented by the violation without disclosing identifying information about the individual member involved. Additional- ly, associations may no longer apply late charges or interest to any monetary penalty.
2. Members Have an Opportunity to Cure Violations
While associations must still provide notice of and hold a disciplinary hearing with a member alleged to be in violation of the association’s governing documents prior to imposing any discipline (monetary or otherwise), AB 130 now requires associations to give a member an opportunity to cure the alleged violation before the disciplinary hearing.
If the member cures the violation before the disciplinary hearing, or if additional time is reasonably necessary to cure the violation and the member provides a financial commitment to cure the violation, the association cannot impose a fine or other discipline against the member. While what constitutes a “financial commitment to cure the violation” is not outlined in the amended statutory language, a member providing the association with a copy of a contract or proposal for work that will correct the violation likely establishes a satisfactory financial commitment to cure the violation.
In the event the alleged violation is not cured, or the member does not commit to curing the alleged violation ahead of
the disciplinary hearing, the association can proceed with the disciplinary hearing. If, following the disciplinary hearing, the association and member are not in agreement, the member may request an internal dispute resolution (IDR) pursuant to Civil Code § 5910. If, alternatively, the association and member agree as to a course of action to resolve the alleged violation, the association must prepare a written resolution, signed by the board and the member, documenting such resolution. Importantly, once signed, this resolution is binding and judicially enforceable.
3. Shortened Notification Period for Disciplinary Decisions
AB 130 amends Civil Code § 5855 to slightly shorten the time- frame within which associations must provide written notice of hearing decisions, in the event an association decides to impose discipline against a member. Associations must now provide written notices of decision within 14 days (reduced from 15 days) after the association’s action to impose discipline.
LIKELY IMPACTS OF AB 130
As briefly mentioned above, the central goal of the legislation is to address housing affordability in California. Ironically, AB 130 will likely have the effect of moving community associations away from cheaper methods of enforcing their governing documents, such as fines, toward more expensive ones. Given that AB 130 significantly limits the amount of monetary fines an association may impose, associations will likely need to resort to non-monetary remedies to enforce their governing documents. Aside from sus- pending membership privileges, if permitted by an association’s governing documents, AB 130 incentivizes associations to resort to alternative dispute resolution, such as mediation, or formal legal action, such as pursuing a court-ordered injunction, to gain members’ compliance with the governing documents.
As many associations already know, imposing fines in nominal sums, such as the maximum $100 allowed by AB 130, rarely results in compliance. Without the authority to impose fines in larger amounts, associations should prepare for a world where monetary penalties are no longer the primary means for enforcing their governing documents.
Moreover, since members must now be given the opportunity to cure violations before a disciplinary hearing is held, associations may no longer impose daily or monthly fines for continuing violations after a single noticed hearing.
While fines in amounts higher than $100.00 are permitted if the association concludes a violation creates an adverse health or safety impact on the common area or another association member’s property, many violations will simply not present facts that support a reasonable argument that an adverse health or safety impact exists. Even where an association has strong grounds for presenting such an argument, given the procedural requirements to impose a higher fine, coupled with the “appeal” rights granted to owners via AB 130, associations should anticipate a rise in IDR requests from owners seeking to challenge board determinations.
While some may view AB 130’s passage as a victory for com- munity association members, the impact of the legislation may result in members writing larger checks to fund special assessments and/or increased regular dues. AB 130 will likely result in an increase in IDRs, mediations, and lawsuits, and these formal enforcement mechanisms will drive up legal expenses for associations. Who foots the bill for these increased association expenses? Members.
Given the need to fund these additional dispute resolution and enforcement processes, associations should consider revising their budgets to account for increased legal expenditures and pro- actively consult legal counsel when developing or revising their enforcement policies.
SO, WHAT SHOULD MY ASSOCIATION DO?
First, associations should work with legal counsel to review their governing documents, including their current enforcement policies and fine schedules, to update the same to comply with AB 130. Revising these documents will help ensure associations’ enforcement procedures are consistent with the new statutory framework prescribed by AB 130.
Associations should also engage legal counsel to explore non- monetary enforcement alternatives. Every community is unique, and associations should work closely with legal counsel to formulate creative strategies that may fit their particular community.
It is important to remember that AB 130 does not eliminate an association’s authority to enforce its governing documents; it simply shifts an association’s incentives to leverage certain enforcement mechanisms. As explained above, associations should be prepared to look at not just fines but to alternatives such as ADR (like mediation) and formal legal action, as first-line tools to gain compliance.
Given AB 130’s immediate effect, associations should anticipate the law in this space to continue to evolve. While AB 130 may be a source of frustration for community associations, it also reinforces the importance of having reliable and forward-thinking legal counsel at your side to help your community navigate the dynamic and ever-changing landscape of community association law.
