Articles Tagged with fines

The recent enactment of Assembly Bill 130 (AB 130) has prompted widespread discussion across the California homeowners association (HOA) industry regarding the future of continuing or daily fines for ongoing violations of an HOA’s governing documents. While the statute now caps disciplinary fines at $100 per violation under Civil Code §5850(c) (absent a health and safety exception), it does not clearly address how HOAs should treat violations that continue over time.

In the past, many associations used continuing fines as a practical enforcement tool for violations that persist day after day or week after week. Common examples include situations where an owner leaves a recreational vehicle parked in a prohibited location or refuses to remove an unapproved architectural improvement. Under typical enforcement policies, an HOA could impose a fine for each day, week, or month that the violation continued until it was corrected. AB 130 now limits fines to $100 “per violation,” but the statute does not explicitly address whether an ongoing condition can be treated as repeated violations occurring over time.

Our firm’s position is that continuing fines may still be permissible if implemented sensibly and with proper due process. One reasonable interpretation of Civil Code §5850(c) is that, for certain types of violations, each day an owner remains out of compliance may reasonably be treated as a new instance of the same violation, provided the fine for each instance does not exceed the $100 statutory cap. Treating each day of continued noncompliance as a new violation respects the statutory cap while still allowing HOAs to address ongoing misconduct that would otherwise remain uncorrected. The law does not expressly prohibit this interpretation, which is consistent with how many regulatory and municipal enforcement systems treat ongoing noncompliance.

That said, because AB130 is ambiguously drafted and there is not yet any published case law interpreting it, associations should proceed cautiously. Any enforcement policy allowing continuing fines should include clear procedural safeguards. Owners must receive advance written notice and the opportunity for a hearing under Civil Code §5855, and the hearing notice should clearly disclose that continuing fines may be imposed if the violation remains uncured after the hearing. Continuing fines should begin prospectively, only after the hearing and after the owner has had a meaningful opportunity to correct the violation.

Associations should also ensure that any fines are reasonable and proportionate. The $100 amount is a statutory ceiling, not an automatic penalty, and HOA boards should consider factors such as the nature of the violation, its impact on the community, and the owner’s cooperation in attempting to cure the issue. If an owner demonstrates genuine progress toward compliance, such as providing a contractor agreement with a reasonable completion timeline, associations should consider suspending or deferring additional fines.

Ultimately, AB 130 leaves this issue in a legal gray area. Many professionals believe continuing fines remain allowed under the statute with appropriate notice and due process, while others disagree. Until courts interpret the law or the Legislature clarifies it, this will likely remain an area of debate.

For now, HOAs considering continuing fines should adopt clear enforcement policies, provide robust notice and hearing procedures, and consult their HOA lawyer to ensure compliance with the evolving requirements of California law. As always, the goal of enforcement should be achieving compliance and maintaining community standards, not generating revenue through monetary penalties.