This year, the Legislature focused on energy and climate upgrades inside the home: cooling systems, heat pumps, energy-efficient windows, and plug-in solar. It also set long-term reserve funding rules, expanded ADU protections, required more transparency on management fees, and cleaned up election and utility-repair rules. Several bills that would have changed fines, assessments, meetings, and construction defect claims stalled and did not become law.
Below is a summary of the enacted and pending legislation and the court decisions from this past year that will affect associations through 2027 and beyond.
ENACTED LEGISLATION
The bills below have been signed and approved by the Governor and will take effect January 1, 2027, as “New Law,” unless otherwise noted. One urgency measure, AB 2692 (Los Angeles County declaration reinstatement), is already in effect. The reserve funding rules in AB 2050 do not become operative until January 1, 2032.
AB 2050: Reserve Funding Requirements
Ch. 796, Stats. 2026 | Civil Code §§ 5550 (amended, repealed, and re-added) and 5552 (new) | Effective January 1, 2027; new funding rules operative January 1, 2032
What Does Current Law Say? At least every three years, an association must have a reserve study done, including a visual inspection of the major components it must repair or replace (if their replacement value is at least half of the gross budget). The study estimates the annual contribution needed and includes a funding plan, but current law does not require any minimum level of reserve funding.
What Changed? Beginning in 2032, AB 2050 mandates that reserve studies identify the minimum annual reserve contribution necessary to ensure balances do not fall below zero over a 30-year period, so that the association may fund the reserves at or above the minimum level and, if need be, transfer funds from the operating budget or utilize a reserve special assessment.
What Should Associations Do? Start planning now. 2032 is closer than it looks in reserve terms. Ask the reserve specialist to model a 30-year “minimum contribution” scenario at the next study or update, so the board can see whether current funding would meet the 2032 standard. Build gradual assessment increases into the next several budgets to avoid a forced 15% transfer or a special assessment in 2032, and work with counsel on any increase that may need member approval.
AB 1684: Cooling Systems
Ch. 887, Stats. 2026 | Civil Code § 4738 (new) | Effective January 1, 2027
What Does Current Law Say? Associations generally regulate equipment installations, including air conditioners, through architectural review and their governing documents. No current statute specifically protects an owner’s right to install cooling equipment.
What Changed? AB 1684 makes void and unenforceable any restrictions in governing documents or architectural guidelines that effectively prohibit or restrict the installation, replacement, or use of a cooling system. Willful violations may trigger actual damages and civil penalty of up to $2,000.
What Should Associations Do? Review architectural guidelines, application forms, and denial letter templates with counsel and remove application or review fees for cooling systems, as well as any required brands or types. Boards can continue to require the installations be code-compliant and that owners continue to maintain them, but speak with legal counsel before requiring an owner to enter into any maintenance or indemnity agreements.
SB 222: Heat Pump Water Heaters and HVAC Systems
Ch. 738, Stats. 2026 | Civil Code § 4737 (new); Government Code permitting provisions | Effective January 1, 2027 (some local permitting duties begin July 1, 2027 and July 1, 2028)
What Does Current Law Say? Associations may adopt reasonable architectural rules for equipment, subject to existing Civil Code limits on certain energy and water-saving improvements.
What Changed? Two kinds of restrictions are now void: (1) Any provision of the governing documents that prevents replacing a gas-burning appliance with a code-compliant electric appliance; and (2) Any provision that effectively prohibits or restricts installing or using a residential heat pump water heater or heat pump HVAC system that serves a single home. An association cannot charge a fee, require a specific product or contractor, claim a rebate, or require removal. The same exceptions apply as for cooling systems: the work would violate the law, or a required permit was not granted. Owners remain responsible for any damage. Unlike the cooling system law, § 4737 does not specifically authorize licensed-contractor or buyer-disclosure conditions.
What Should Associations Do? Update architectural guidelines and approval checklists for heat pumps and gas-to-electric conversions. Remove any “gas only” requirements and fees, and train management and committee members not to deny these applications on grounds the law now voids.
SB 908: Energy Code-Compliant Window Replacements
Ch. 787, Stats. 2026 | Civil Code § 4754 (new); Government Code § 65850.73 (new) | Effective January 1, 2027
What Does Current Law Say? Associations commonly regulate window replacements (materials, color, grids, appearance) through architectural standards and review.
What Changed? Restrictions that effectively prohibit or restrict a code-compliant “residential window replacement project” are void and unenforceable. Restrictions that impose requirements on Energy Code-compliant windows are also void. This covers separate interest windows, exclusive use common area windows, and common area windows that serve only one unit. Associations may still adopt “reasonable restrictions” on installations and reasonable aesthetic restrictions (if in multifamily buildings of more than 20 units, not including townhomes). The association may also require a recorded notice and installer indemnity.
What Should Associations Do? Work with counsel to determine whether the association’s documents actually contain “reasonable restrictions” and “reasonable aesthetic guidelines,” if applicable. If they do not, no window review may be required and the association won’t be able to ensure a uniform exterior appearance of the building.
SB 1267: EV Charging Station Use and Installer Indemnity
Ch. 350, Stats. 2026 | Civil Code § 4745 (amended) | Effective January 1, 2027
What Does Current Law Say? An owner who installs an EV charging station in the common area or exclusive use common area (and later owners) must pay for damage caused by its installation, maintenance, repair, removal, or replacement, keep liability coverage, and meet other conditions.
What Changed? Owners are now also responsible for damage caused by the use of the charging station. The installer must indemnify or reimburse the association or its members for loss or damage caused by the installation. The Legislature’s intent is that an association that otherwise complies with EV charging station laws should have liability protection for injuries and damage from a charging station it does not own.
What Should Associations Do? Update EV charging policies, owner agreements, and contractor requirements before January 1, 2027, to cover damage from “use” and to require installer indemnity. Keep a complete file showing that each approval followed § 4745 (written decision, licensed contractor, certificate of insurance, annual renewal). Ask the association’s insurance broker how owner-owned chargers are treated under the master policy.
AB 956: Accessory Dwelling Units (ADUs) and Junior ADUs
Ch. 791, Stats. 2026 | Civil Code §§ 714.3 and 4751 (amended); Government Code § 66323 (amended) | Effective January 1, 2027
What Does Current Law Say? Civil Code § 4751 voids restrictions in a planned development that prohibit or unreasonably restrict ADUs or JADUs on a lot “zoned for single-family residential use.” Civil Code § 714.3 contains a similar rule for recorded instruments generally. Reasonable restrictions are still allowed.
What Changed? AB 956 expands prohibitions on restrictions to build and transfer ADU/JADUs to any lot zoned to allow single-family use, including condominiums, townhouses, and cooperatives.
What Should Associations Do? Planned developments should review ADU/JADU policies and expect applications for two detached ADUs on single-family lots. Condominium associations should not assume either way: § 4751’s text is still limited to planned developments, but § 714.3 applies to recorded instruments generally. Ask counsel how the zoning of the property affects your documents.
AB 739: Annual Managing Agent Fee Statement
Ch. 506, Stats. 2026 | Civil Code §§ 5200 and 5500 (amended) | Effective January 1, 2027
What Does Current Law Say? The board must review monthly financial reports (reconciliations, budget comparisons, bank statements, and similar). Civil Code § 5200 lists the “association records” members may inspect. Until now, the “association records” and financial review did not include a distinct statement regarding management’s fees.
What Changed? AB 739 requires an annual board review of a statement of fees charged by the managing agent, and such statement is added to the list of association “records” available for member inspection.
What Should Associations Do? Calendar the annual review (for example, with budget adoption or the annual financial review) starting in 2027, and record it in the minutes. Confirm the management agreement requires the manager to provide the statement in the three statutory categories. Keep the statement with association records for member inspection requests.
AB 1892: Utility Interruptions and Election Notices (Cleanup)
Ch. 169, Stats. 2026 | Civil Code §§ 4775, 5103, 5105 (amended) | Effective January 1, 2027
What Does Current Law Say? Under § 4775, unless the CC&Rs say otherwise or a utility provider is responsible, the association must restore interrupted gas, heat, water, or electrical service that begins in the common area. Elections by acclamation (§ 5103) required an initial notice at least 90 days before the nomination deadline and a reminder 7 to 30 days before it. Electronic-ballot elections (§ 5105) required individual notice to each member 30 days before the election.
What Changed? AB 1892 narrows electronic voting notices to be sent 30 days prior, only to members actually voting electronically, rather than the whole association and shortens the mandatory notice timeline for uncontested elections by acclamation from 90 days to 30 days before the deadline. AB 1892 also clarifies association responsibility for repairing and restoring interrupted utility services originating in common areas.
What Should Associations Do? Update election rules, calendars, and notice templates (acclamation and electronic ballot) for elections held after January 1, 2027. Confirm the association’s utility-outage response plan meets § 4775’s 14-day “commence repairs” requirement.
AB 2035: Court Petitions to Amend Declarations in Large Senior Communities
Ch. 916, Stats. 2026 | Civil Code § 4275 (amended) | Effective January 1, 2027
What Does Current Law Say? When the CC&Rs require a supermajority to amend, the association or any member may petition the court to reduce the required percentage. Generally, the amendment must have received more than 50% of the votes.
What Changed? For senior citizen housing developments with more than 6,000 separate interests, AB 2035 lowers the vote threshold for court approved CC&Rs amendments from more than 50% to more than 37%, subject to conditions, including that the declaration has not been amended for at least 35 years.
What Should Associations Do? Most associations are not affected. Very large senior communities that have struggled to get turnout should confirm eligibility with counsel before balloting, because the petition depends on how the vote is conducted.
AB 2692: Reinstating Terminated Declarations (Los Angeles County Only) – URGENCY, ALREADY IN EFFECT
Ch. 124, Stats. 2026 | Civil Code § 4276 (new) | Urgency statute, in effect since approval on August 24, 2026 | Repealed January 1, 2028
What Does Current Law Say? When CC&Rs expire under their own term provisions (for example, because members did not vote to extend it in time), there was no clear statutory path to bring it back and typically 100% membership approval is required to reinstate.
What Changed? For associations in Los Angeles County only, CC&Rs that terminated under its initial-term provisions may be reinstated by approval of the percentage of members the CC&Rs already require to extend its term, or, if none is stated, a simple majority. Balloting must follow the governing documents, the Davis-Stirling Act, and other applicable law. The term of the extension equals the original term or 20 years, whichever is less.
What Should Associations Do? Los Angeles County associations with expired or expiring CC&Rs should talk to counsel now. The window closes January 1, 2028. Every association, regardless of location, should check whether their CC&Rs renew automatically or require action before it expires. Acting too late might leave your community without CC&Rs and without a viable way to revive them, short of obtaining 100% membership approval.
AB 1957: Post-Sale Bidding at Foreclosure Sales
Ch. 279, Stats. 2026 | Civil Code §§ 2924d, 2924f, 2924h, 2924m (amended) | Effective January 1, 2027
What Does Current Law Say? Civil Code § 2924m delays the finality of trustee’s sales of 1-4 unit residential properties so that tenants, owner-occupants, nonprofits, and other “eligible bidders” can submit bids for 15 to 45 days after the sale. Courts have applied this process to association assessment-lien foreclosures.
What Changed? Starting in 2027, the post-sale bidding process applies to “eligible property.” That is defined as residential property of four or fewer units sold under a power of sale in a first lien deed of trust or mortgage. The bill also removes “prospective owner-occupants” from the list of eligible bidders, renames tenant bidders, and lets public prosecutors seek a civil penalty against ineligible bidders.
What Should Associations Do? Because an association’s assessment lien is usually not a first lien deed of trust, the 15-to-45-day post-sale bidding window may no longer apply to association lien foreclosures after January 1, 2027. Boards should confirm with collections counsel and the foreclosure trustee how sales will be handled before relying on that reading, and update collection policy disclosures as needed.
Related Energy Note – SB 868: Plug-In (“Balcony”) Solar Devices
Ch. 985, Stats. 2026 | Public Utilities Code §§ 8530-8532 (new) | Effective January 1, 2027; utility exemption ends January 1, 2030
What Does Current Law Say? Solar equipment that feeds a home’s electrical system generally must go through the utility’s interconnection process.
What Changed? Small plug-in solar devices are exempt from utility interconnection requirements until January 1, 2030. To qualify, a device must produce no more than 1,200 watts AC per home, plug into a standard outlet, meet electrical code, be certified by a recognized testing laboratory, and be unable to send power to the grid during an outage. Utilities cannot require approval, fees, or extra equipment, but they may require a simple online registration.
What Should Associations Do? SB 868 changes utility rules only. It does not amend the Civil Code or override governing documents. Associations may still see more requests for balcony and patio solar kits. Boards should ask counsel how existing solar protections (including Civil Code § 714) and exclusive use common area rules apply before adopting or enforcing a policy on these devices.
Housing Note – SB 1116: Starter Home Lot Splits (Does Not Apply to CIDs)
Ch. 808, Stats. 2026 | Civil Code § 714.9 (new) and Government Code amendments | Effective January 1, 2027
What Does Current Law Say? The Starter Home Revitalization Act lets local agencies ministerially approve certain small-lot subdivisions and starter-home projects.
What Changed? SB 1116 expands the Act and adds Civil Code § 714.9. This new section voids recorded covenants and other instruments that prohibit, or would physically prevent, a housing project permitted under the Act. Objective, uniformly applied design and use standards are still allowed. § 714.9 expressly does not apply to real property that is part of a common interest development.
What Should Associations Do? Non-CID neighborhoods with recorded restrictions (for example, tracts without a Civil Code-bound association) should have counsel review whether their lot-split or density restrictions remain enforceable.
| CALENDAR REMINDERS (prior laws and future dates) |
| January 1, 2029 – Nonfunctional turf: Potable water may no longer be used to irrigate nonfunctional turf in HOA/CID common areas (Water Code § 10608.14, added by AB 1572 (2023)). Associations with more than 5,000 sq. ft. of irrigated common area must certify compliance starting June 30, 2031, and every three years through 2040. SB 1139 (Ch. 88, Stats. 2026) adds Monterey Peninsula Water Management District enforcement but does not change association deadlines.January 1, 2028 – AB 2692 reinstatement window closes (Los Angeles County only).January 1, 2032 – AB 2050 minimum reserve funding rules take effect.Still in effect – AB 130’s $100 fine cap and cure rules (since July 1, 2025) remain the law. AB 2579 (below) did not pass. |
PENDING/INACTIVE LEGISLATION
The following bills did not finish the legislative process in 2026 and are not law. With narrow exceptions, bills cannot pass after August 31 of the second year of a session, and the 2025-2026 session ends November 30, 2026. These bills show where HOA law may be heading, and similar bills may be introduced in 2027.
AB 2579: Fines Above $100 – Assembly Inactive File
Last amended April 29, 2026; moved to the Assembly inactive file at the author’s request May 21, 2026.
What Does Current Law Say? Since AB 130 (2025), fines are capped at $100 per violation unless the violation may have an adverse health or safety impact on the common area or another member’s property. A member who cures the violation before the hearing, or makes a financial commitment to cure it, cannot be disciplined.
What May Change? AB 2579 would have required the Department of Real Estate to develop and publish, by January 1, 2028 and after public input, a list of clearly defined violations (such as fire and life-safety hazards, dangerous animal issues, and violence or threats) that could carry fines over $100. It would have also clarified that a member with habitual, repeated, or continuing violations is not considered to have “cured” simply because the violation is not happening at the time of the hearing.
What Should Associations Do? Keep fine schedules and enforcement policies compliant with AB 130 (or update them if you haven’t already), including a clear explanation of which violations the board considers “health or safety” violations, definitions for “continuing” or “repeat” violations, and clarifying what it means to give a “financial commitment” to cure under current law.
SB 1007: Budget Reports, Assessment Increases, and Discipline – Inactive
Passed the Senate May 27, 2026; amended in Assembly June 15, 2026; Assembly Housing Committee hearing canceled at the author’s request June 24, 2026.
What Does Current Law Say? A board that complies with the budget-report requirements may raise regular assessments up to 20% per year without a member vote (Civil Code § 5605).
What May Change? SB 1007 would have lowered the board’s no-vote cap on regular assessment increases from 20% to 8%, making it exceptionally more difficult for associations to meet budgetary needs amidst ongoing rising costs in all sectors.
What Should Associations Do? No action needed now. Boards planning large increases should keep in mind that the Legislature has shown interest in a lower cap.
AB 1184: Board Meetings, Minutes, and Recordings – Inactive
Passed the Senate with amendments August 26, 2026; Assembly concurrence pending since August 27, 2026; not enrolled.
What Does Current Law Say? The Open Meeting Act bars the board from acting outside a meeting and from meeting by a series of electronic transmissions except in emergencies. Minutes must be available within 30 days.
What May Change? This bill would have barred a majority of directors from using a series of communications of any kind to discuss, deliberate, or act on association business outside a meeting; required executive session minutes to identify litigation by case name, number, and court; made recordings of open meetings association records, with notice at the start of each recorded meeting; etc.
What Should Associations Do? No action needed. As a best practice, boards should already avoid email “meetings” and serial discussions among a majority of directors.
AB 1903: Construction Defects (SB 800 / “Right to Repair Act”) – Inactive
Passed the Senate August 31, 2026; held at the Assembly Desk September 2, 2026; not enrolled.
What Does Current Law Say? Civil Code Title 7 (SB 800) sets construction standards, prelitigation procedures, and limitations for defect claims involving homes, including common interest developments.
What May Change? This bill would have revised the water, structural, soil, and fire-protection standards, changed prelitigation notice and proof requirements, allowed builders to obtain releases in exchange for certain repairs, and added insurance provisions.
What Should Associations Do? Newer associations and associations nearing developer turnover should continue to follow current SB 800 procedures with counsel and watch for this issue in 2027.
CALIFORNIA CASE LAW
“Published” court decisions are law and binding. “Unpublished” decisions are not law, but they illustrate how courts handle issues common to associations. Every decision below is published.
Eng v. Opperman (Portola Ranch Association) – PUBLISHED
(2025) 117 Cal.App.5th 354 | 1st Dist., Div. 2, No. A170737 | Filed Dec. 19, 2025; certified for publication Dec. 22, 2025
1. Facts: Owners in a planned development applied to convert their garage into an ADU and build a new garage elsewhere on the lot. The design review committee said it had no ADU expertise and referred the application to the board. The board retained an independent architect-consultant, reviewed the application, tried to reach a compromise, and denied the application in a detailed letter citing traffic and fire-safety concerns. The owners sued the association for breach of the governing documents and breach of fiduciary duty.
2. Court Decision: The Court of Appeal affirmed judgment for the association. The governing documents gave the board authority to review the application and deny it on safety grounds. The board’s decision was protected by the business judgment rule and by Lamden judicial deference, which the court applied to this architectural (ADU) decision and not just to maintenance decisions. The association’s attorney fee award was also affirmed.
3. Takeaways: A careful, documented process makes a real difference: expert input, a written explanation tied to safety, and a good-faith effort to compromise. Boards must still follow the ADU statutes (see AB 956, above). The decision does not allow unreasonable ADU restrictions; it rewards a well-supported decision.
Ruffier v. Volcano Hills Road Maintenance Assn. – PUBLISHED
3d Dist., No. C101551 | Filed Dec. 15, 2025; certified for publication Jan. 6, 2026
1. Facts: A road-maintenance association for 22 parcels in Amador County had a $200-per-year assessment cap in its 1974 declaration. At an annual meeting attended by a bare quorum, members voted to amend the bylaws to remove the cap. The board then raised the annual assessment from $200 to $1,000. Several members sued for a declaration that the increase was invalid.
2. Court Decision: The Court of Appeal reversed and directed the trial court to declare the increase void. Under Civil Code § 5605, the board had neither complied with the budget-report requirements of § 5300 nor obtained member approval, and any increase over 20% requires approval by a majority of a quorum of members. The association’s argument that the roads presented an “emergency” (§ 5610) was not considered because it had not been raised in the trial court. The court also noted, without deciding, that using a bylaw amendment to get around a declaration provision appears improper.
3. Takeaways: Members can sue to invalidate an improper assessment increase. Before any large increase, confirm budget-report compliance and member approval thresholds. If the board believes an emergency exists, it must make that determination and build the record at the time. Never amend a lower-ranking document to work around the declaration.
Arroyo v. Pacific Ridge Neighborhood Homeowners Assn. – PUBLISHED
4th Dist., Div. 1, No. D084293 | Filed Nov. 4, 2025; certified for publication Dec. 1, 2025
1. Facts: A director facing a recall asked the inspector of elections to include her written statement in the recall ballot materials. The association’s mailing included a statement from the one member who ran to replace her, but the inspector refused to include hers, reasoning that only candidate statements went in the mailing.
2. Court Decision: The court held that candidate statements printed and mailed by the association are “association media” under Civil Code § 5105, so the director had to receive equal access to respond for purposes reasonably related to the recall. The court reversed the judgment for the association. It did not automatically void the recall: on remand, the association may show that the violation did not affect the election result.
3. Takeaways: Treat everything the association prints, mails, or posts about an election, including recall materials, as association media subject to equal access, regardless of how the election rules define the term. Train inspectors and managers, keep the full election record, and call counsel when in doubt.
Parsons v. City of Indian Wells – PUBLISHED
4th Dist., Div. 2, No. E082591 | Filed and certified Aug. 31, 2026; modified Sept. 22, 2026 (rehearing denied, no change in judgment)
1. Facts: Indian Wells declared short-term rentals (STRs) a nuisance and adopted a 29-night minimum stay, which effectively banned STRs. A later ordinance let members of a qualifying CID vote to “opt out” and allow shorter stays. The plaintiffs, CID owners, were denied an STR permit. They argued that Civil Code § 4740, which protects owners from later-adopted CC&R rental bans, preempted the city’s rules. The trial court agreed.
2. Court Decision: The Court of Appeal reversed. § 4740 applies only when a CID’s governing documents restrict rentals. It does not address whether a city may regulate STRs by ordinance, and an opt-out vote under the city ordinance is not an amendment to the governing documents. The ordinance was also not an unconstitutional delegation of city power. The judgment and the owners’ fee award were reversed.
3. Takeaways: City and county STR rules apply regardless of what the CC&Rs allow, and § 4740 “grandfathering” does not protect owners from local ordinances. Boards should know their local STR rules and treat any city opt-out vote as separate from a governing-document amendment.
Cocoa AJ Holdings, LLC v. Schneider – PUBLISHED
(2025) 115 Cal.App.5th 980 | 1st Dist., Div. 3, No. A167555 | Filed Oct. 8, 2025; certified for publication Oct. 31, 2025
1. Facts: A developer that owned 19 units in a San Francisco mixed condominium and timeshare project wanted to amend the CC&Rs so it could sell its units as whole units. A timeshare owner campaigned against the amendments, wrote to other owners and spoke at meetings criticizing the developer and the board, and threatened and filed litigation. After he sued, the developer cross-complained against him for interference, breach of contract, unjust enrichment, and defamation.
2. Court Decision: The court affirmed an order striking the cross-complaint under the anti-SLAPP statute (Code Civ. Proc. § 425.16). The owner’s campaigning on the CC&R amendments, his statements about association management, and his litigation-related communications were protected activity on issues of interest to the whole community, and the developer did not show a likelihood of winning any claim.
3. Takeaways: Owner criticism and organizing about association governance is often protected speech. Anyone considering a claim against a vocal owner, including an association, director, or developer, should talk to counsel first. A losing anti-SLAPP motion can be costly.
WCST Enterprises, LLC v. Ling – PUBLISHED
4th Dist., Div. 3, No. G065236 | Filed and certified for publication Sept. 28, 2026 (earlier appeals in the same case were unpublished)
1. Facts: Two condominium neighbors fought for nearly a decade over a garage parking space. The plaintiff won a quiet title judgment based on the grant deeds, and the judgment named it the “prevailing party.” It then sought about $292,000 in attorney fees under Civil Code § 5975 and the CC&R fee clause.
2. Court Decision: The court affirmed the denial of fees. Being named “prevailing party” does not automatically entitle a party to fees. Under § 5975(c), the party must show the case was an “action to enforce the governing documents.” Here, the gravamen of the case was enforcing rights under the grant deed, not the CC&Rs, and merely relating to the governing documents is not enough.
3. Takeaways: Fee recovery depends on what the case is really about. Before suing (or defending), associations should identify the specific governing-document provisions being enforced and plead and prove them. Title or deed disputes between owners may not carry Davis-Stirling fee rights.
This Legal Update is a general summary for boards and managers. It is not legal advice for any particular association. Please contact counsel about how these laws apply to your association.