By Matthew A. Gardner, Esq., CCAL, CAI Greater Inland Empire Chapter Liaison
This article first appeared in the CAI San Diego Community Insider Magazine, Winter 2025 Issue.
Every year shortly after the legislative dust settles at the Capitol building, members of California Community Associations Institute (CAI) gather to discuss our past year’s efforts in Sacramento. It is an opportunity to debrief on successes and failures, but also to put together an action plan for the upcoming year. The meeting brings together groups from all over California, and from all groups of community leaders: homeowners, business partners, managers, and our California Legislative Action Committee (CLAC) advocacy team. The 2025 legislative session gave us plenty to talk about, and even more to plan for 2026.
Obviously, the biggest topic of conversation was AB 130. Our advocacy team members Louie Brown and Carlos Gutierrez were able to give a more detailed explanation about how the bill found its way into legislation that was primarily about California Environmental Quality Act (CEQA) reform. The main objective of AB 130 was to promote “infill” multi-family housing development projects by providing exemptions to some of the more stringent CEQA requirements which would then encourage more building and tackle housing affordability. It was surprising to learn that in order to gain the support needed to get CEQA legislation passed, the senate housing members asked to include the language from then SB 681 on fine caps. It was less surprising to learn that the legislators were more interested in passing the CEQA reform rather than listening to our warnings about unintended consequences of the fine caps. It was also disappointing to learn that our advocacy team had met with the sponsor of SB 681 and proposed language that would modify the drastic impact on fine caps, before learning that it was slipped into AB 130.
The good news is that it does appear that constituents are reaching out to their legislators to give feedback on communities that are struggling with enforcement issues. Brown reported that some of the legislators are asking him questions about AB 130 and the consequences of limiting fines. Since the original “theme” behind AB 130 and CEQA reform was about tackling affordable housing, CLAC is able to provide actual examples of how this legislation might leave an association with the mostly unaffordable option of going into court to resolve community issues. More importantly, CLAC agreed that revising and fixing AB 130 will be a top priority in the upcoming year. CLAC will continue to communicate with the contact points in the legislature about the real-life impact of fine caps, and work to find support for neutralizing the fine caps.
Another negative bill that received a lot of attention and discussion was SB 770. It eliminated the requirement owners list their association as additional insured on individual policies covering EV charging equipment. Despite no objection from insurers to maintaining these protections for associations, the bill passed the Assembly and was signed by the governor to be effective January 1, 2026.
This is another law which leaves open the possibility of reform in the upcoming year. Keeping up with the theme of “unaffordable housing” and unintended consequences, legislators may not have considered that adding to the overwhelming burden of insurance coverage is going to make basic housing/ insurance costs increase for all owners. CLAC anticipates we will see some movement on this issue, and identified legislators that understand the increased liability and insurance costs that come from this new law.
Another priority for CLAC in 2026 will be clean up legislation on electronic voting. CLAC told us to expect to see a bill that targets the practical challenges in implementing the new electronic voting process, mostly focused on notice language and requirements.
One success from the past year that we celebrated was the failure of the manager licensing bill AB 739 to make it out of committee. However, there is a concern that this bill might find its way back in 2026 in modified form. CLAC is prepared with language that will remove the most burdensome aspects of the current licensing language.
A new issue that CLAC told us to expect was a renewed focus on reserves and funding requirements. Repeating the focus on housing affordability, the legislature may consider making a percentage funding requirement for reserves. CLAC formed a task force for options to present to interested bill sponsors if and when this issue starts gaining traction. We also learned that there may be some overlap on the federal side as we see Fannie and Freddie increasing minimum reserve requirements for approved communities. Since almost 70% of housing loans nationwide are backed by Fannie/Freddie, CLAC may have to coordinate with CAI National on appropriate language that satisfies both state and federal concerns.
Finally, CLAC does expect an attempt to address the impact of SB 410. That bill required a cover page to be added to SB 326 balcony inspections. While CLAC was neutral on the bill itself, which was signed and becomes effective January 1, 2026, they are already hearing that lenders are concerned the disclosure will harm the mortgage market. Lenders do not want to be invested in a community at risk of assessment increases for maintenance, or left with homeowners finding themselves underwater on their mortgage. Between insurance increases, reserve funding requirements, and disclosures about deferred or upcoming maintenance, lenders are going to want to see some language that gives them confidence to continue to back mortgages in common interest developments. CLAC is prepared when this issue comes out.
While a lot of the legislative process does happen behind the scenes and out of sight, there are still many opportunities to be heard. And ultimately, the success or failure of a bill comes down to the ability to be heard, and selecting those in the best position to present information helpful to your cause.
For real-time updates on legislative news, events, and compliance resources, follow CLAC at www.caiclac.com or on social media. Sign up and be ready to be called into action and let your legislators know what issues are important to you and your community.
