A significant legislative change in California now limits homeowners association (HOA) fines to just $100 per violation, down from penalties that previously reached thousands of dollars. Effective July 1, 2025, this cap was included in Assembly Bill 130 to protect California’s middle- and low-income residents from excessive financial burdens. The law also prohibits additional late fees or interest charges, with exceptions only for health and safety violations.
The legislation has sparked mixed reactions across California’s 50,000+ HOAs governing approximately 65% of homeowners. While advocates celebrate protection from devastating fines and foreclosure, HOA board members worry the reduced penalty may weaken enforcement and increase noncompliance. Edward Susolik of Callahan & Blaine suggests this could positively reshape how associations approach minor violations, though some fear it may force reliance on costly legal action.
The cap was included as part of Assembly Bill 130, a larger housing reform initiative that also seeks to streamline environmental reviews for new housing projects. The specifics of the fine cap were integrated into this legislation with little public notice, drawing attention only when it was finalized shortly before the governor’s signature. This decision has sparked a mixed response among homeowners, HOA boards, and legal experts.
Louis Brown, an attorney representing HOAs, expressed concerns about the implications of the legislative change, emphasizing a desire for greater transparency rather than an outright cap on fines. He highlighted that the sudden inclusion of the fee cap caught many board members off guard, as many had been advocating for more comprehensive oversight in the enforcement of regulations.
In California, the prevalence of HOAs is notable, with over 50,000 associations overseeing around 65% of homeowners. The number of newly constructed homes under HOA governance has surged, making them an often unavoidable feature of the housing market. Homeowners within these associations typically pay a median monthly fee of $278, one of the highest in the nation.
While some disputes may be resolved amicably, others escalate to significant conflicts, sometimes involving formal hearings before any fines are deducted. The new law also prohibits additional late fees or interest charges alongside the cap with an exception for health and safety-related rules.
Senator Aisha Wahab, who backed the measure, stated that capping fines is a vital step toward addressing the financial strains excessive fees have placed on families. “By capping fines—except for health and safety—we set fair standards, protect generational wealth, and finally put homeowners and HOA boards on equal footing,” she said.
However, concerns persist regarding the impact of the new restrictions on HOA authority. Many board members worry that the reduced incentive to enforce rules may lead to an increase in noncompliance, as homeowners may choose to absorb the minor fines rather than adhere to the regulations. David Zepponi, chief executive of the Executive Council of Homeowners, articulated that the cap could weaken the HOA’s ability to encourage adherence to community standards, potentially leading to a rise in violations.
The shift may also prompt a greater reliance on costly legal action if noncompliance continues. Despite these concerns, legal experts believe the change is unlikely to undermine HOA finances significantly, as fines do not constitute a major revenue stream for associations. Susolik noted that this could signal a shift in how associations enforce rules, suggesting that expectations around minor violations—like the color of a garage door—may evolve for the better.
As the community grapples with the implications of this legislative change, the balance of power between homeowners and HOA boards may be undergoing a fundamental transformation in California’s housing landscape.
