Generally, HOA fines are considered a tool the HOA uses to enforce rules and regulations effectively. However, California has introduced a new provision in its legislation that outlines HOA fine limits for communities across the state. But what does this entail, and how can your HOA adapt?
What are HOA Fines?
In an HOA, fines or penalties serve as a deterrent in the community. It is a set amount of money paid by residents who commit violations to the HOA as a form of consequence.
Yes, the HOA may issue warning notices initially, especially for first-time offenders. However, homeowners tend to be more careful when monetary penalties are involved. Simply put, it’s a way for the association to discourage rule-breaking and for the board to handle violating residents without immediately jumping to legal actions.
Are HOA Fines Enforceable?
Many homeowners who are new to planned communities may be surprised by the monetary penalties involved. For some, it may even feel illegal, especially since homeowners are already expected to pay monthly dues.
However, yes, HOA fines are enforceable and legal. It’s usually outlined in the HOA’s governing documents, which residents agree to when buying a home in an HOA community. Those documents outline the rules and indicate the HOA’s authority to impose fines in enforcing them.
In addition to the governing documents, most states also allow HOAs to impose penalties for rule violations. Usually, the states recognize that the HOA has the power and responsibility to enforce its rules. As long as the HOA’s fine policy is consistent with state law, it is enforceable.
How Much Can HOA Fine You in California?
The amount of money an HOA in California can impose on residents has recently changed. AB 130 is a state law enacted on July 1, 2025. Essentially, the bill puts a limit on the amount of HOA fines an association can impose on homeowners.
So, what is the maximum fine for an HOA in California?
That HOA fine limit is set at $100 per violation, and it affects many communities that rely on larger fines to encourage rule compliance.
The legislation means well, as it aimed to improve property affordability for homeowners. However, as a consequence, it negatively impacted an HOA’s enforcement authority. Without an effective deterrent, more residents might disregard rules more often.
Other Provisions of AB130 for HOAs
Apart from the HOA fine cap, the legislation also includes other provisions outlining how violations and fines can be handled.
For one, the legislation says HOAs can no longer charge for late fees or interest on fines. However, this, along with the cap, doesn’t apply to penalties already issued before July 1, 2025.
However, another notable provision is that AB130 allows residents with violations to “cure” them before penalties are imposed. This means HOAs must allow homeowners to rectify their violations before imposing fines.
While great on paper, it sparks more questions. It is unclear how it could be applied to moment and time-sensitive violations, such as illegal parking violations and short-term rentals.
Are There Exceptions to AB 130?
Yes, the cap doesn’t apply to all violations. The provisions of AB 130 allow board members to impose higher fines if a violation would negatively affect the health and safety of the community. However, the law doesn’t outline or indicate what such violations may be. So, the HOA will need to specify such violations in an open meeting first before this could be enacted.
What Can HOA Board Members Do?
Having an HOA fine limit has many implications for the HOA Board. Here’s what your HOA board can do to stay on top of it.
1. Review Your Governing Documents
The first thing you would want to check is your HOA’s governing documents. In particular, you will need to review the fine policy that you have in place. Check whether your policies are aligned or consistent with the new law.
If it is, there’s no need to change anything. If it is not, you will need to revise your policies. Make sure to follow the proper process of amending the said provision. As a best practice, consult a local HOA attorney to ensure your new policies comply with the law.
2. Make a List of Health and Safety Violations
As previously mentioned, AB 130 has exempted the HOA fine limit requirement for health and safety violations. However, it didn’t list what violations would fall under these categories.
To better enforce its fine policies and rules, the HOA should have a definitive list of the health and safety violations. Conduct an open meeting and involve residents so that they are also aware of the exemption.s
3. Continue Providing Due Process
A HOA fine limit may reduce the effectiveness of HOA fines for enforcement. However, this doesn’t mean the HOA board can dispense with due process for its residents.
When you find a violation, follow the enforcement process outlined in your governing documents. Also, allow time for the resident to “cure” rectifiable violations so they remain compliant with the new law.
4. Don’t Rely on HOA Fine Collections for Budgeting
When creating your HOA budget, never rely on the funds you can potentially collect from HOA fines. In any scenario, it’s hard to predict how much funding you can get from it in the first place. Additionally, even with a lot of rule-breaking in an HOA community, the amount you can get from HOA fines is not enough to cover much of the HOA’s expenses.
On top of this, relying on HOA fines to fund community operations is both legally and morally questionable.
Adapting to New Legislation
Over time, changes, especially in the law, are inevitable. Part of running an effective and compliant community is adapting to changes, such as those affecting AB130 and HOAs in California.
Optimum provides expert management services to community associations in Southern California. Call us today at (714) 508-907 or contact us online to learn more!
