Fines Capped at $100: What California's New Law (AB 130) Means for Your HOA
For years, HOA boards in California have relied on fine structures as a primary tool for enforcing community rules. However, a significant and immediate change to the Davis-Stirling Act has fundamentally altered the landscape of HOA enforcement. As of July 1, 2025, Assembly Bill 130 is now law, and its impact on your association's authority is something every board member needs to understand.
This new legislation introduces a strict cap on most fines, forcing boards to rethink their enforcement strategies. Here’s a breakdown of what has changed and what it means for your community.
The Core Change: A $100 Cap on Fines
The most significant provision of AB 130 is that fines for most governing document violations are now capped at a maximum of $100 per violation. This is a dramatic reduction from previous fine schedules, which could often escalate into thousands of dollars for ongoing issues. Additionally, the new law prohibits associations from charging late fees or interest on these fines.
The Exception: Health and Safety Violations
The law does provide an important exception. A board can impose a fine greater than $100 if the violation "may result in an adverse health or safety impact on the common area or another association member's property."
However, to use this exception, the board must take a specific procedural step: it must make a written finding during an open board meeting that details the specific health or safety impact of the violation.
The Mandate: An "Opportunity to Cure"
Another key change is the reinforced "opportunity to cure." AB 130 mandates that no disciplinary action may be taken against a homeowner if they fix (or "cure") the violation before the scheduled hearing date. If curing the issue will take more time, the member can provide a "financial commitment" to remedy the violation, which also prevents the fine from being imposed.
What This Means for Your Board
This new law presents a significant challenge to the enforcement authority of your association.
Reduced Deterrent for Major Violations: For high-reward violations like unauthorized short-term rentals (Airbnb) or unapproved architectural changes, a $100 fine may simply be seen as a "cost of doing business" rather than a true deterrent.
Urgent Need to Review Policies: Your association's existing fine schedule is likely now unenforceable. The board must promptly review and revise its enforcement and fine policies to comply with the new statutory cap.
Proactive Identification is Key: Boards should work with legal counsel to proactively identify which violations within their community could legitimately be classified as health or safety risks to justify a higher fine. This requires clear documentation and formal adoption in a board meeting.
While this law aims to protect homeowners from excessive penalties, it requires boards to be more strategic and procedurally precise than ever before. It underscores the importance of clear communication, diligent documentation, and a proactive approach to governance.
While our focus is on capital planning, staying informed on all aspects of HOA governance is key to a healthy community. For questions about your long-term financial strategy, contact Apex Reserve Group for a complimentary 30-minute consultation.