AB-130 Passed – Hard Cap on Disciplinary Fines

The California Legislature passed Assembly Bill 130 and the Governor has signed it into law effective immediately. While this bill covers multiple topics related to housing, it also includes language capping association disciplinary fines at $100.00 per violation, unless “the violation may result in an adverse health or safety impact on the common area or another association member’s property.” Moreover, before imposing any penalty greater than $100, the board must make a written finding specifying the adverse health or safety impact, and must do so in an open meeting. Late charges and interest may not be charged on monetary penalties.

The new law also contains an automatic right to cure any violations before a monetary penalty can be imposed. Thus, if the homeowner cures the violation before the disciplinary hearing, then no discipline can be imposed. If curing the violation would take longer than the time between the notice of the hearing the actual hearing date, then the member may provide a financial commitment to cure the violation, in which case no discipline can be imposed.

The new law also reduced the time to provide written notice to the homeowner of the board’s decision following a hearing from 15 days to 14 days, and imposes a requirement on the board to draft a written resolution of any agreement reached with the homeowner at the hearing. The written resolution will need to be signed by the board and the homeowner, and it is intended to bind the association and be judicially enforceable.

We suspect that these requirements will be relaxed with subsequent legislation, but for now this is the law. Boards should take immediate action to revise their enforcement policies and fine schedules to be in compliance. Our office can prepare compliant documents for a low flat fee. Please do not hesitate to contact us for assistance.