AB 130 – Fining Authority
Effective July 1, 2025
Amends Civil Code Sections 5850 and 5855
On June 30, 2025, California Governor Gavin Newsom signed AB 130 into law. Because AB 130 is a budget bill, it became effective immediately; thus, the changes to the Civil Code became effective on July 1, 2025. AB 130 introduced substantial modifications to the Civil Code, ostensibly designed to further bolster homeowner due process and enforces a strict cap on the amounts of fines which boards may impose for most violations. While there are myriad changes that have been made to Civil Code Sections 5850 and 5855 of the Davis-Stirling Act, the most pertinent and pressing changes that require immediate attention are as follows:
1. Association Fines Capped at $100.00 for Most Violations: Civil Code Section 5850(c) now provides that the maximum fine an association can impose for a violation is $100.00. This cap applies unless a specific exception, as detailed below, applies.
2. Exception for “Adverse Health or Safety Impact”: The board may impose a penalty stated in the schedule of monetary penalties, or a supplement thereto, that is in effect at the time of the violation that is greater than one hundred dollars ($100.00) per violation, if the violation may result in an adverse health or safety impact on the common area or another association member’s property.
Before imposing a fine in excess of $100.00 under this health and safety exception, the board must first make a written finding specifying the adverse health or safety impact in a board meeting that is open to the members. This finding must clearly articulate the specific risk or danger posed by the violation; however, given that it must be made in an open meeting, identifying information concerning individuals subject to disciplinary proceedings should not be revealed.
3. Mandatory Opportunity to Cure Violation: Civil Code Section 5855(c) has been amended to state that, before imposing any discipline, including fines, a board must provide the member with an opportunity to cure the violation prior to the disciplinary hearing. Additionally, if the member cures the violation before the disciplinary hearing, or if curing the violation would take longer than the notice period and the member provides a financial commitment to cure the violation, such as a signed contract or paid deposit for repairs, then no fine or discipline can be imposed.
4. Shortened Notification of Decision: New Civil Code Section 5855(f) has also shortened the timeframe for the board to provide written notification of its hearing decision from fifteen (15) days to fourteen (14) days following the board’s action.
Recommendation:
Since the passage of Assembly Bill 130, community associations throughout California have been reexamining how they enforce their governing documents. With the fine caps described above, there is the concern that these laws have stripped boards of their primary tool for securing compliance with the governing documents of their association; however, a monetary penalty is only one tool available to an association and does not diminish the board’s authority to enforce compliance through other legal means. Associations may bring actions for injunctive relief, which are court orders compelling an owner to comply with the governing documents, when voluntary compliance fails. Further, many governing documents allow for associations to impose special assessments for reimbursement against owners. Specifically, an association can levy a reimbursement assessment for damage to the common area or for other purposes as authorized by its governing documents. Thus, while AB130 has created a $100.00 cap on fines, it has not eliminated a board’s enforcement rights and obligation to act.
In light of the foregoing, we recommend that all boards:
- Review and Update Enforcement and Fine Policies to ensure compliance with the new law.
- Engage legal counsel to review your CC&Rs to ensure compliance and confirm reimbursement assessment language.
- Ensure your board is taking prompt action in its enforcement procedures, taking careful documentation, and potentially a willingness to escalate enforcement earlier and pursue compliance through the courts. The associations that will adapt most successfully are those that treat enforcement as a process rather than a penalty, one rooted in fairness, consistency, and the understanding that protecting the community’s integrity remains the ultimate goal.
SB 410 – Exterior Elevated Elements
Effective January 1, 2026
Amends California Civil Codes §§ 4525, 4528, 5200, 5210, 5551
SB 410 adds new disclosure requirements for sellers in common interest developments regarding the exterior elevated element (“EEE”) inspections, mandated by SB326. This section adds the requirement for sellers to provide prospective purchasers with a copy of the most recent report and modifies Civil Code §§ 5200 and 5210 to add the SB326 EEE reports to the list of Association records an association is required to disclose to its members upon request. Civil Code §5551 specifies requirements for the inspection and reports.
This bill aims to enhance transparency for homebuyers in Associations by mandating the disclosure of critical structural safety information, specifically regarding balconies, decks, and other EEEs, making these reports part of standard CID disclosure packets.
Recommendation:
Associations should update their annual billing disclosure form setting forth the cost for documents provided during escrow to include a copy of the EEE reports to the list of available Association records. Managers should also be aware that while SB326 reports were previously not explicitly included in the list of “association records” subject to member inspection under a §5200 (but were subject to inspection as part of the reserve study to which they must be attached), they are now explicitly defined as an ”association record” and the same timelines and obligations for production apply.
SB 770 – Insurance for EVCS
Effective January 1, 2026
Amends California Civil Code § 4745
Existing law requires owners installing an electric vehicle charging station (“EVCS”) within their separate interest or within common area or exclusive use common area to maintain a liability insurance policy. SB770 removes the requirement for homeowners installing a EVCS in common area or exclusive use common area to name their association as an additional insured under the owner’s insurance policy. This effectively shifts risks and burdens of insurance from owners who actually uses the EV charging stations to their associations (and ultimately, the rest of the owners).
Recommendation:
Associations should adopt an EVCS Policy which contain protections for the association, despite this change in insurance requirements. Associations should ensure that existing policies are amended to reflect the current limitations. If an Association does not have an EVCS Policy, it should reach out to counsel to obtain guidance in adopting one.
SB 625 – Streamlined Architectural Approval After Disaster
Effective January 1, 2026
Adds Civil Code §§ 4752 and 4766
SB625 was enacted primarily to make it easier for homeowners to rebuild homes destroyed in disasters by voiding restrictive Association rules and streamlining architectural review for modifications. It specifically targets disaster recovery, ensuring homeowners can reconstruct substantially similar homes without excessive association interference, while also setting new rules for general home modification approvals.
Recommendation:
Associations should review their current architectural rules to ensure that vague language in the rules is replaced with objective design standards. This will not only meet the requirements in the added Civil Code sections related to disaster reconstruction, but also assist in all architectural enforcement actions, because vague language can result in challenges to architectural decisions. Having objective design standards is also important when it comes to approval of accessory dwelling units (ADUs) and junior accessory dwelling units (JADUs).
Ridley v. Rancho Palma Grande Homeowners Association
114 Cal.App.5th 788 (2025)
Association Duties Relating to Investigating and Remediating Water Intrusion
Background: A homeowner filed a claim against their association alleging breach of CC&Rs, negligence, and nuisance among other claims. In 2018, a flood occurred in the crawlspace beneath the unit, which was the common area of the association. Initial investigations conducted by the association’s experts concluded that the water came from an undestroyed well. The association delayed repairs for over 19 months, during which time the unit continued to sustain damage. The association attempted to engage the water district, which also advised the association to take repair and remediation steps to avoid further damage to the unit. The association also rejected recommendations from its remediation vendor and at least two (2) drilling vendors. The association also rejected advice from its legal counsel. The association repeatedly ignored expert recommendations and changed its position on the issue.
Holding: The court held that the association breached its duties under the CC&Rs by failing to adequately and reasonably investigate and repair the common area damage. The business judgment rule defense was rejected, and the court found the association’s actions constituted gross negligence. The Association was required to pay the complaining homeowner for lost rent and relocation costs in light of the holding.
Recommendation: The association has an obligation to investigate allegations relating to common area damage and repair the same in a reasonable and timely manner. The association’s protections under the business judgment rule can be negated by the association’s failure to act and/or failure to heed the advice of its experts. Association’s should consider adopting a water intrusion policy to address how each of members and the association should respond to reports of water intrusion.
Woolard v. Regent Real Estate Services, Inc.
107 Cal.App.5th 783 (2024)
Association has no duty to intervene in Neighbor-to-Neighbor Disputes; Limited Standing for Tenants
Background: The case arose from a physical altercation that occurred between condominium residents (Woolard and Hall, the “Tenants”) and their next-door neighbors (Smith and Thorne, the “Neighbors”). The Neighbors sued the Tenants for negligence and intentional torts arising from the physical fight. The Tenants filed a cross-complaint against the association, Greenhouse Community Association, and its management company, Regent Real Estate Services, Inc. The Tenants alleged that the altercation was the result of long-standing harassment by multiple neighbors, which the association and management company negligently failed to address. The negligence claim asserted that this failure to intervene led to the physical altercation. The trial court granted the association’s and the management company’s motion for summary judgment on the negligence claim. The Tenants appealed the summary judgment.
Holding: The Court of Appeal affirmed the trial court’s grant of summary judgment in favor of the association and the management company. Specifically, the Court held that the association had no duty to intervene in neighbor-to-neighbor disputes. The primary holding was that the alleged foreseeability of a physical altercation was insufficient to find that the association and management company had a legal duty to involve themselves in the alleged long-standing harassment between neighbors. The court explicitly stated that the duty of care for associations and management companies does not generally include mediating, deescalating, or resolving neighborly disputes. Further, the Court held that the Tenants’ status as non-owner residents meant they were in a limited relationship with the association. Their status as tenants, without being members of the association, deprived them of legal standing to maintain a complaint that the association failed to adequately enforce its own governing documents. Consequently, the association’s duties to the Tenants were more limited than they would be to actual owners.
Recommendation: Boards should consider adopting a policy regarding an association’s role in neighbor-to-neighbor disputes and anti-harassment policy. In light of the foregoing decision, the policy can provide that the association’s role is to enforce the governing documents, not to act as mediators, counselors, or law enforcement for neighbor-to-neighbor disputes which do not involve allegations of illegal harassment and can further establish a clear written protocol for responding to complaints. Boards should also ensure that their association’s have proper leasing rules in place which clearly define the responsibilities of tenants, and require owners to provide the association with contact information for their tenants and to provide tenants with copies of the association’s governing documents.
California Dental Ass’n v. Delta Dental of California
115 Cal. App. 5th 142, 337 Cal. Rptr. 3d 801 (2025)
Directors Owe a Duty to the Corporation; Not Necessarily the Members
Background: This case involves a nonprofit mutual benefit dental association wherein dentist members brought an action against the corporation’s directors for violation of the covenant of good faith and fair dealing and violation of fiduciary duties. The Court of Appeal cited several cases involving homeowners associations to justify its decision.
Holding: Directors owe a duty to the nonprofit corporation, but not necessarily to individual members.
Recommendation: There can be no doubt that boards of directors owe a fiduciary duty to the corporations they serve. The Corporation Code does not specifically state that directors also owe such a duty to the members of a nonprofit mutual benefit corporation. In a homeowner’s association, where a board has an obligation to enforce the governing documents, it has an obligation to exercise that authority in good faith and to avoid arbitrary decisions. However, this case points out that that duty is not established by statute. A court’s interpretation of this issue in any specific case may rely heavily on the language in the CC&Rs or other governing documents at issue. Directors and managers of homeowners associations are encouraged to seek legal advice for any questions regarding a director’s duties to the members.
Bird Rock Home Mortg., LLC v. Breaking Ground, LP
114 Cal. App. 5th 492, 337 Cal. Rptr. 3d 93 (2025)
Background: The Oceanside Community Association foreclosed upon a lien for delinquent assessments and collection costs totaling $37,763.21. Bird Rock Home Mortgage was the highest bidder at the trustee’s sale with a bid of $60,000.00. However, the association’s legal counsel, acting as trustee, extended the bidding for a period of 15 days pursuant to Civil Code section 2924m. During that extended bidding period, Breaking Ground submitted a higher bid of $203,000. The association’s legal counsel conveyed the property to Breaking Ground by recording a trustee’s deed upon sale. Bird Rock sued for declaratory relief.
Holding: Association lien for past due assessments was “mortgage” under nonjudicial foreclosure sale statutes and Davis-Stirling Common Interest Development Act, and thus, the statute regarding extended bidding applies.
Takeaway: Civil Code allows for an extended bidding period when the highest bidder at a foreclosure auction is not a prospective owner-occupant. This extended bidding period could result in additional funds being paid to the association or, as in this case, to the debtor/former owner.
Eng v. Opperman
2025 WL 3704973 (Cal. Ct. App. Dec. 19, 2025)
Business Judgment Rule Applies to Board Decision to Reject Accessory Dwelling Unit
Background: The Oppermans owned a home in Portola Valley Ranch Association, a planned development. They submitted an application to build an Accessory Dwelling Unit (“ADU”) on their lot. They proposed building an ADU in the current location of their garage and moving their garage forward on their property. Lacking guidance from the board about ADUs, the Association’s Design Review Committee (“DRC”) referred the matter to the board. After careful review, the board rejected the plans, citing traffic and fire safety concerns raised by the Opperman’s neighbors, the Engs.
The Oppermans were sued by the Engs for claims relating to the property. The Oppermans cross-complained and named the association as a cross-defendant. The Oppermans asserted that the CC&Rs prohibited the DRC from considering any issues other than aesthetics and that the board’s traffic and fire safety concerns were mere pretext. They argued that the board’s primary reason for rejecting the garage relocation was to force the Oppermans to park outside if they wanted to build an ADU.
Holding: For the association. The Court held that the business judgment rule extends to a board decision to reject an application to construct an ADU. The Court explained that the board had broader authority than the DRC, including the general authority to enforce the governing documents and to conduct the business and affairs of the corporation. The CC&Rs also obligated the board to look after the health and safety of all homeowners. The Court concluded that the board’s decision to deny the ADU application was wholly within the board’s authority and protected by the business judgment rule and that the uncontested evidence demonstrated that the board’s decision was made in good faith, contrary to Opperman’s conclusory assertions.
Recommendations: Review your governing documents carefully and seek legal advice before rejecting an application for an ADU. This case hinged on specific language in the CC&Rs that justified the board’s authority to consider fire and safety issues, above and beyond the mere aesthetic issues that the DRC could consider. If your association does not have an ADU policy in place, reach out to legal counsel to discuss adopting the same.
Roseman Law, APC, is a full-service law firm specializing in representing common interest developments. Our services include:
- Enforcement of Governing Documents
- Contract Negotiations, including Construction and Maintenance Agreements
- Lender/Developer Liability
- Alternative Dispute Resolution/Mediation
- Litigation
- Creation and Amendment of Governing Documents, Interpretation of CC&Rs, By-Laws, and Rules and Regulations
- SB800 Compliance/Construction Defect Claims
- Earthquake Claim Negotiation and Litigation
- Delinquent Assessment Collections – Judicial and Non-Judicial
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