I write to inform you of a recent change to the Davis-Stirling Act that affects the manner in which common interest developments (planned unit developments, condominium complexes, stock cooperatives, and community apartment projects; collectively, “CIDs”) impose monetary penalties on any association member for violations of the governing documents.
Assembly Bill 130 took immediate effect on July 1, 2025, impacting several housing-related issues, including governing document violations in CIDs. Under the law as it existed before AB 130, CIDs were authorized to adopt a policy imposing monetary penalties on a CID member for a violation of the governing documents, and CID boards were required to adopt and distribute to each member a schedule of the monetary penalties that may be assessed for violations. Under the pre-AB 130 law, boards were able to impose a monetary penalty on a member for a violation of the governing documents up to the amounts set forth in the CID’s adopted monetary penalty schedule after a duly noticed hearing.
As a result of the new law, (a) CIDs are prohibited from assessing monetary penalties of greater than $100 per violation, (b) boards are required to give the member suspected of a violation the opportunity to cure a violation prior to the hearing, (c) if the board and member are in agreement at the hearing, the board will be required to draft a resolution, which, if signed by the board and member, would be judicially enforceable, (d) if the board and member are not in agreement after the hearing, the member will have the opportunity to request internal dispute resolution, and (e) if the board imposes a monetary penalty on a member or imposes a monetary charge on a member for damage to the common area and facilities, the board is required to provide the member with written notification of the decision within fourteen (14) days following the action.
These changes to the Davis-Stirling Act will undoubtedly change a CID’s governing document-enforcement procedure. For CIDs dealing with relatively minor infractions, boards will have to exhaust additional steps (and time and money) before a monetary penalty of up to $100 per violation may be assessed. For CIDs dealing with relatively greater violations, boards may consider enforcing the governing documents by other legal options. Either way, CID boards should closely review Civil Code Section 5850 and 5855 (where the pertinent changes are due to AB 130) with legal counsel and community management for any needed changes to the boards’ enforcement procedure.
If you have further questions regarding governing document enforcement or any other matters of importance to your association or stock cooperative, please contact Bill Scherer at wms@sfcounsel.com or Louis Sarmiento at ljs@sfcounsel.com.
– Written by Louis J. Sarmiento, Esq.