2026 California HOA Legislative Update: What Every Board Needs to Know Right Now

This California legislative year has been relentless for HOA boards and community managers. Bills impacting the common interest development industry have come from every corner of the policy arena. CACM has been in constant meetings and legislative hearings fighting for the interests of HOA communities and professional managers. As the legislature moves into its opposite-house phase, here is where every key bill stands and what your board needs to know.

SB 1007 — Assessment Increases and Management Fee Disclosure

Author: Menjivar | Status: Passed Senate, now in Assembly Housing and Judiciary

The original version eliminated an association's ability to increase regular assessments by up to 20% without a membership vote, only allowing an inflation adjustment. It also required a separate management fee statement and visual aid in the annual budget report. CACM strongly opposed, as constrained assessment authority leads to underinsurance, deferred maintenance, and potential insolvency. The author amended the bill to allow increases up to 8% without a vote. CACM remains opposed — the cost of insurance alone currently exceeds 8% annual increases in many California markets. The building industry and affordable housing advocates have now joined the opposition. CACM secured notable NO votes on both sides of the aisle and continues fighting in the Assembly for amendments that carve out insurance, state and local mandates, and reserves.

Board action: Review your 3-5 year budget projections now. If an 8% annual assessment cap would create a funding problem for your association — especially for insurance — that conversation needs to happen at your next meeting.

SB 1238 — Manager Duty of Care and Lending Disclosures

Author: Wahab | Sponsor: California Association of Realtors | Status: Moving through Assembly

Originally, this bill imposed a full fiduciary duty on managers to both the association and individual homeowners, and required managers to make subjective judgments about whether buildings met federal lending critical repair standards. CACM spent considerable resources fighting it. Key wins: all requirements for managers to make subjective representations have been removed, and disclosures can now be pulled from existing documents. The fiduciary duty requirement was eliminated and replaced with a duty of care standard — materially lower and more manageable. CACM continues working to eliminate the duty of care to individual members entirely.

Board action: Your management company will carry a duty of care to individual homeowners if this passes. Ensure your manager carries adequate E&O coverage and is held to a professional standard.

AB 2439 — Assessment Payment Notification Requirements

Author: Rubio | Status: Amended, moving through committees

This bill originated when two sitting legislators were not notified of a management change and missed assessment payments, resulting in liens on their homes. The original version required certified mail with return receipt for any change in where assessments are sent, with a $1,000 civil penalty on individual board members for non-compliance. After CACM's advocacy, the bill was significantly amended: initial notice now requires only email (for opted-in owners) or first-class mail with certificate of mailing. Certified mail is only triggered if an owner then misses two consecutive payments after that first notice. CACM remains opposed due to the personal board member liability provision.

Board action: If AB 2439 passes, your board must send specific notification to all owners whenever there is a management or payment process change. Failure could result in $1,000 personal fines on individual board members.

AB 2050 — Reserve Account Minimum Funding Mandate

Author: Caloza | Sponsor: CAI | Status: Moving through Assembly | CACM SUPPORT

Effective January 1, 2032, this bill requires associations to fund reserve accounts at a level ensuring the balance does not fall below zero over a 30-year period. CACM supports this as a necessary step toward addressing California's chronic HOA reserve underfunding crisis. Recent amendments replaced mandatory special assessments with a requirement that associations transfer a minimum of 15% of gross annual budget to reserves annually until projections are no longer negative. If 15% is insufficient, a special assessment is required — but member approval is needed if it exceeds the 5% cap.

Board action: AB 2050 gives California HOAs until 2032 to get reserve funding right. Start now. Boards whose 30-year reserve projections fall below zero need a corrective funding plan before this law requires one.

AB 1903 — Construction Defects and the SB 800 Right to Repair Act

Author: Wicks | Status: Moving through Senate | CACM OPPOSE

This bill was gutted and amended into legislation that fundamentally undermines the SB 800 Right to Repair Act. As currently written: requires actual damage before filing a notice of claim, removing the ability to address latent defects before visible damage occurs; prohibits recovery of investigative costs; prohibits extrapolation of defects across units; and establishes a builder-controlled certification process that provides builder immunity and forces associations to release all future claims. CACM successfully eliminated the original requirement that 75% of members approve and that every member sign the notice — two provisions that would have made construction defect claims nearly impossible. The bill remains deeply problematic and CACM is working with a broad coalition in opposition.

Board action: If your community was built after 2003 and you have identified potential construction defects, pursue your SB 800 claims NOW before this bill changes the legal landscape. SB 800 deadlines are real — missing them permanently waives your rights.

AB 739 — Manager Education and Fee Disclosure

Author: Jackson | Status: Amended and moving through committees

AB 739 has traveled a long road. Originally introduced in 2025 as a requirement for all HOA managers to become licensed real estate brokers — stopped by CACM — it returned in 2026 requiring 12 hours of board member education within two years of election, and proactive management fee disclosure to all homeowners. After extensive negotiations, a workable compromise was reached: boards must now annually review management base fees, fee schedule charges, and reimbursable expenses. Individual homeowners may electronically receive the same information only upon written request. No proactive universal disclosure required.

Board action: If AB 739 passes, your board must conduct an annual fee review and make the information available to requesting homeowners. California Communities already provides this transparency to every board we manage without being asked.

The Bottom Line for California HOA Boards

This is the most active California HOA legislative session in recent memory. The bills moving through Sacramento will change how associations operate, how managers are held accountable, how reserve funds must be structured, and how construction defect rights are enforced. Some changes are positive. Others create real risk for boards that aren't prepared.

California Communities tracks every bill that affects HOA communities and updates compliance procedures the moment legislation passes. We send legislative updates to every board we manage. Our PCAM/MCAM-certified, principal-led management means your board always has an expert who knows the law and knows your community. If your board wants a full briefing on how these bills affect your specific association, book a free consultation at californiacommunities.biz or email info@californiacommunities.biz.