AB 130 IN CALIFORNIA: EARLY PREDICTIONS OF HOA CHAOS ARE ALREADY COMING TRUE
OVERVIEW
When California lawmakers passed AB 130 earlier this year, they sold it as a way to rein in excessive HOA fines. By capping fines at $100 per violation, the Legislature claimed it was protecting homeowners from abusive boards. But within just six weeks of the law taking effect, the real consequences are already surfacing, and they match exactly what homeowner-side HOA attorneys with actual and direct legal experience warned would happen.
Instead of creating fairness, California’s new HOA fine cap under AB 130 has already started unleashing mass uncertainty, encouraging bad actors, and pushing even well-intentioned HOAs into untenable positions. Homeowners across the State of California are asking whether they may now start treating fines as a mere “cost of doing business,” and many good HOA boards are not sure what to do.
And, as predicted, these good HOA boards are already indicating a fear of being accused of “stacking,” and are asking whether moving straight into ADR and eventual litigation is the solution. The result is mounting conflict, anticipated higher litigation costs, and a wave of confusion that benefits no one except bad HOAs and irresponsible members.
Drawing on direct client experiences, consultations, and industry reactions, including recent media coverage and conversations with actual experts on both the homeowner and HOA sides, this article breaks down why AB 130 is already backfiring, what uncertainties remain, and what the statute actually requires by way of notice, hearings, and enforcement procedures. By understanding both the fallout and the law’s black-letter requirements, homeowners can see why AB 130 is already creating more chaos than clarity.
For a deeper dive into the immediate fallout and why these problems were entirely predictable, you can also watch my most recent HOA HELL podcast episode on AB 130 by clicking here. You can also review my prior articles on AB 130 by clicking here and here.
AB 130: EARLY SIGNS OF PREDICTED HOA CHAOS
Within weeks of AB 130 taking effect, the fallout has been immediate and widespread. Many homeowners are treating the California HOA fine cap as a license to disregard rules, asking whether fines are now just the “cost of doing business.” Meanwhile, even good HOA boards are paralyzed, fearful of being accused of “stacking” fines (issuing immediate repeated fines for an ongoing violation), and in response, they’re now considering litigation much earlier than ever before.
The new $100 fine limit for California HOAs has already triggered disputes over whether boards can issue repeat fines for the same violation. In consultations with both potential and current clients, as well as in discussions with numerous opposing counsel, one theme has been consistent in the last six weeks: nobody (at least nobody who’s competent) is certain what AB 130 actually allows. Boards are asking whether they can issue repeat fines, escalate penalties, or re-notice a violation when a homeowner refuses to cure it. Homeowners are asking whether they can openly ignore architectural rules or nuisance provisions without consequence. The statute provides no answers.
This uncertainty is already producing exactly what we predicted: more conflict, not less. Some HOAs are retreating and doing nothing, exposing themselves to lawsuits for failing to enforce their governing documents. Others are moving straight into ADR and litigation, a drastic step that shifts the costs from modest fines to six-figure lawsuits—costs ultimately borne by homeowners themselves.
HOW GOOD HOAS ARE RESPONDING TO AB 130
AB 130’s immediate impact isn’t just confusion among homeowners. It’s a wave of hesitation and second-guessing among those good HOAs that would otherwise act responsibly. Good HOA boards that want to enforce the rules fairly are now caught between two bad options.
We’re already seeing good HOAs beginning to worry about being sued for improper “stacking.” So, some of them are contemplating doing nothing at all for the time being (beyond issuing a single $100 fine). This will, of course, leave neighbors stuck living next to violations that never get cured, and this in turn will open these otherwise good HOAs up to liability for failing to enforce the governing documents, creating the very lawsuits the statute was supposed to prevent.
Other good HOAs are heading in the opposite direction by moving directly into ADR and the litigation process. Instead of relying on fines to deter violations, they are preparing to file lawsuits for injunctive relief, demanding that homeowners remove unapproved construction, correct nuisance conditions, or stop violating the rules. For many boards, this route feels safer: if a clear violation of the governing documents has occurred, proving it in court is usually straightforward, and a prevailing HOA can recover its attorney’s fees. By contrast, if a board guesses wrong about what AB 130 allows or prohibits, it risks a court ruling against them and being forced to pay the homeowner’s attorney’s fees. Faced with that choice, litigation seems like the “safe” option, even if it costs everyone more, and even if it significantly increases the number of lawsuits filed in California.
The result is a lose-lose scenario. Responsible HOAs face greater risk no matter what path they choose if they risk guessing as to what they can and can’t do under AB 130, while homeowners face either unchecked violations that harm property values or skyrocketing costs tied to litigation (or both). And here is the bigger irony: this law punishes the good HOAs while rewarding the bad ones. My office exists to fight against the abusive boards, i.e., the bad HOAs that manipulate the Davis-Stirling Act, violate the law until a court slaps them down, and exploit loopholes at the expense of homeowners. Those HOAs won’t suddenly start playing fair because of AB 130. Nor will the bad HOA members who disregard the rules and treat their neighbors with contempt. They will keep doing what they’ve always done, while the good HOAs, and the good homeowners who play by the rules, are the ones left to deal with the fallout.
WHAT AB 130 ACTUALLY REQUIRES: A BRIEF REMINDER
AB 130 made changes to more than part of the Davis-Stirling Act, including Civil Code section 5850. And yet, for all of the uncertainty AB 130 has created, one question matters most: what does the law actually now require? Here are the key procedural mandates every California HOA must now follow:
- Advance written notice of the violation. AB 130 made no changes to the requirement that boards must give homeowners written notice before any disciplinary hearing. The notice must state the date, time, and location of the hearing, describe the alleged violation, and explain that the member has the right to attend and be heard. It must be delivered personally, sent via first-class mail, or, if the homeowner has consented in writing, by email or other electronic means.
- Cancellation of hearings upon cure or financial commitment. The board must cancel a scheduled hearing if the member cures the violation at least seven days in advance. AB 130 added that the board must also cancel if the homeowner shows a “financial commitment” to cure. Exactly what qualifies as a valid “commitment” remains undefined, and this is already proving to be one of the most problematic ambiguities in the law.
- Executive session hearing. Disciplinary hearings must still be held in executive session, outside the presence of other members, with the homeowner given the chance to respond. This protects privacy and ensures due process.
- Right to Internal Dispute Resolution (IDR). If no agreement is reached at the hearing, the homeowner retains the right to request IDR under Civil Code section 5910 (a right that already existed even if it was unstated in the old version of the statute).
- Judicially enforceable agreements. If the board and the homeowner reach a resolution at the hearing, the board must draft a written agreement. Once both sides sign it, the agreement is enforceable in court.
- 14-day written notice of decision. The board must provide the homeowner written notice of its decision within 14 days of the hearing. This shortens the previous 15-day deadline. The notice rule applies to all disciplinary actions, including fines and suspensions of privileges.
- No interest or late fees on unpaid fines. AB 130 prohibits HOAs from charging interest, late fees, or penalties on unpaid fines. This removes one of the most common ways HOAs historically turned fines into snowballing financial burdens, but it also reinforces how absolute the California HOA fine cap now is. [This one, in particular, presents no problem for me because I think it’s actually one of the very few positive aspects of AB 130.]
These may look straightforward on paper, but most of these requirements are laced with unanswered questions. Terms like “financial commitment” are undefined and ripe for substantial abuse, the scope of the $100 cap is unclear, and the enforcement mechanics remain unsettled. These gaps are already collapsing into the uncertainty and conflict that I and other competent HOA attorneys warned about before AB 130 ever took effect.
BAD HOAS AND BAD HOA MEMBERS ARE THE ONLY ONES WHO BENEFIT FROM AB 130?
The Legislature and a very few “pretenders” out there (i.e., attorneys who tout themselves as homeowner-side experts, but who actually have little direct legal experience) have framed AB 130 as a victory for homeowners. But the reality emerging just weeks after enactment shows the opposite. Competent HOA attorneys on both the homeowner and HOA sides agree that the statute is not helping ordinary members or good HOA boards. Instead, it is empowering the very people least deserving of protection.
- Bad HOA boards. Bad HOA boards that already ignore the Davis-Stirling Act will continue to do so. These boards already interpret every ambiguity in their own favor, daring members to spend tens of thousands of dollars in court to prove them wrong. AB 130 gives such HOAs more cover to keep acting as they always have, while members pay the price.
- Bad HOA members. There are, of course, homeowners who simply don’t care about their neighbors and will use AB 130 as cover to do whatever they want, regardless of the impact on the community. But even beyond that, the law also encourages otherwise “good” HOA members to treat fines as a loophole (seeing the $100 cap as a cost of doing business rather than an obligation to comply). Both groups will exploit the uncertainty, leaving the remaining homeowners to bear the consequences.
The irony is inescapable. AB 130 will not restrain the abusive HOAs it was supposedly written to check. Those boards already act outside the law. Nor will it meaningfully protect responsible members who follow the rules. Instead, the statute shifts the risk to good HOAs and good homeowners, creating the very chaos that was predicted long before the bill took effect.
CONCLUDING THOUGHT
AB 130 promised to protect homeowners, but in reality it has unleashed confusion, conflict, and unnecessary costs. Within weeks of taking effect, the California HOA fine cap law produced exactly what experienced HOA attorneys predicted: paralyzed boards, emboldened violators, and the specter of rising litigation that will further drain already cash-strapped communities. Good HOAs now face lose-lose choices, while bad HOAs and irresponsible members exploit the statute’s gaps. Unless the Legislature steps in to clarify its own law, AB 130 will continue driving the chaos it was supposed to prevent, and California homeowners will keep paying the price.