Five bills are sitting on the Governor's desk that land directly on an association: cooling systems, ADU restrictions in your CC&Rs, ADU impact fees, the annual management fee review, and insurance nonrenewals. He has until September 30. Here is what each one does to a board, and what to do in the nine days before he acts.
The Legislature adjourned on August thirty-first. The Governor has until September thirtieth to sign or veto what they sent him. That is nine days from today. Anything he neither signs nor vetoes by then becomes law without his signature.
Most of what came out of this session will not touch your association. Five bills will. I went through all of them and pulled the ones that land on a board, on a set of governing documents, or on a townhome owner in a common interest development. Here is what each one actually does, in the order that matters least to most.
One housekeeping note before we start. Everything below is enrolled and presented, which means both houses passed it and the text is locked. It is not law yet. If the Governor signs, most of it starts January first, twenty twenty-seven unless the bill says otherwise, and two of these say otherwise.
Number five: AB 739, your management fee statement becomes a review item
Assembly Bill 739 requires an HOA board that uses a managing agent to conduct an annual review of a statement detailing management fees, including specified management charges, fee schedule charges and reimbursable expenses. That statement also becomes an association record, which means a member can ask to inspect it.
What it does to your board: it turns a line in your budget into a governance obligation with a date attached. The associations that get hurt by this are the ones that never actually reviewed the management agreement, because the fee schedule changed two renewals ago and nobody opened the attachment. Put the review on the calendar next to your annual audit, and make your manager explain the fee schedule in plain English before you sign off on it.
Number four: SB 1117, the ADU impact fee math changes
Senate Bill 1117 changes how impact fees are calculated on a qualifying accessory dwelling unit. Instead of fees based on the whole unit, the proportional calculation applies only to the interior livable area above 750 square feet.
On a 1,100 square foot ADU, the fee exposure is calculated on the 350 feet above the threshold, not on the full 1,100.
What it does to your association: nothing directly, and that is the point. This one is an owner opportunity, not a board burden. In a planned development the practical question is whether your architectural process can handle the applications that follow. There are limits in the bill, including provisions about how many ADUs sit on a lot, so do not build a budget around the simple example above. But if your documents route every ADU request through a discretionary hearing, expect more of them.
Number three: AB 956, the ADU restriction in your CC&Rs takes another hit
Assembly Bill 956 requires local agencies to ministerially approve up to two detached, new construction accessory dwelling units on a single family lot. The old number was one.
The second half of the bill matters more to a board. It revises the rule that voids covenants prohibiting or unreasonably restricting ADUs, and widens its reach from lots strictly zoned single family to lots zoned to allow single family residential use. The bill does not force ministerial approval of a junior ADU on a lot that already has two detached units.
What it does to your documents: this is the second bill in two sessions aimed squarely at ADU restrictions in governing documents. If you have not had counsel read your architectural guidelines against Civil Code Section 4751 since the last round, you are carrying a clause a court will not enforce. An unenforceable restriction is worse than no restriction, because boards keep enforcing it and the association pays for the lesson.
Number two: AB 1684, your association cannot say no to air conditioning
AB 1684 voids any provision in a common interest development's governing documents that prohibits or limits installing, upgrading, replacing or using a cooling system that complies with applicable state and local building codes. Portable units, window units, evaporative coolers, heat pumps and similar systems all count. An association that willfully violates it is exposed to actual damages, a civil penalty up to two thousand dollars, and attorney fees.
The penalties are per violation, not per board decision. A three unit association that blocks three owners is looking at six thousand dollars plus three sets of legal fees.
What it does to your board: it closes the excuse that architectural review takes time. Anyone who has managed a building with an aggressive architectural committee knows the pattern. An owner applies for cooling, the committee sits on it, summer ends. That path is gone, and a violation letter sent after the Governor signs is itself the willful violation.
The associations that get hurt by a bill like this are the ones whose guidelines have not been touched since the nineties. Pull the cooling, air conditioning, HVAC, window unit and thermal comfort provisions out of your CC&Rs and your architectural guidelines and put them in front of association counsel before the next hot week, not after the first demand letter.
Number one: SB 1301, the bill that decides whether the community keeps its insurance
For townhome and condominium owners, the last three years have not been about rent caps. They have been about what happens when the carrier walks and the association is left buying a policy nobody wants to write.
Senate Bill 1301 is aimed at that. Effective January first, twenty twenty-eight, it requires a residential property insurance nonrenewal notice at least ninety days before the policy expires, up from seventy five. If the policy fails to meet underwriting guidelines because of something curable, the insurer has to send a notice at least one hundred twenty days out explaining what needs to be remediated, and has to give the policyholder not less than ninety days to do the work. The insured gets a detailed, plain language explanation of the grounds for nonrenewal, plus all nonaerial imagery the insurer relied on. Aerial imagery is carved out, which matters, because a drone or satellite photo is how a lot of these decisions start. Ask for the inspection findings and the insurer has fifteen days to produce them. Insurers cannot decline renewal solely on the basis of certain claims or a prior inquiry. Roof age alone is also off the table, but only if the owner obtains and pays for an independent inspection confirming at least five years of useful roof life remaining. Annual reporting to the Insurance Commissioner starts April first, twenty twenty-nine.
What it does to your association: it turns a letter you cannot argue with into a problem you can fix. That is the whole difference. A nonrenewal you learn about seventy five days out with no stated reason is a scramble into the FAIR Plan and a special assessment. A nonrenewal that arrives one hundred twenty days out, names the condition, hands you the ground level photos they used, and gives you ninety days to remediate, is a maintenance item.
Southern California is where this bites hardest. If your community carries fire exposure, this is the most valuable bill of the five. It is also the one that takes the longest to help, so plan on 2028.
The bill that is not on the desk
The biggest rent number of the session was a bill that died, and it matters here more than it matters to a landlord.
AB 1157 would have dropped the statewide cap from five percent plus cost of living, ten percent maximum, down to two percent plus cost of living, five percent maximum. It would have pulled separately alienable properties, meaning single family homes, condominiums and individually owned townhomes, into both the rent cap and just cause. And it would have deleted the January first, twenty thirty sunset so all of it ran indefinitely.
It failed passage in committee on January thirteenth, twenty twenty-six, and died on January thirty-first under the constitutional deadline for bills carried over from the prior year. If you own a townhome you rent out, that bill was aimed at you. It missed by one committee.
One correction I make every time this comes up, because I hear it stated wrong constantly. Propositions 10 in 2018, 21 in 2020 and 33 in 2024 were not referendums on the state rent cap. All three were efforts to repeal or weaken Costa-Hawkins so cities could pass their own stronger local rent control, and voters declined all three. Get that right if you argue it in front of a council, because the other side will.
Where the rest of the session landed
AB 1892 is no longer on the desk. The common area utility bill was signed and filed as Chapter 169 and takes effect January first, twenty twenty-seven. Unless the declaration provides otherwise or the utility provider is responsible, the association is responsible for repairs and replacements needed to restore gas, heat, water or electrical service when the interruption begins in the common area, even when the problem extends into another area. The same bill changes election procedures, including nomination notice timelines. If your community has not updated its maintenance and election materials for this one, that work is already overdue.
Two more worth a line, both still on the desk. AB 2025 requires disclosure when a rental advertisement uses a digitally altered image, with the unaltered image made accessible, which matters to any owner advertising a rental. AB 1680 rewrites California FAIR Plan oversight and adds Insurance Commissioner enforcement authority, which pairs naturally with SB 1301.
What to do in the next nine days
Nothing in the statute changes until the Governor acts. What changes now is your calendar.
Pull your CC&Rs and your architectural guidelines and find every clause that mentions cooling, air conditioning, HVAC, window units, thermal comfort or accessory dwelling units. Get those provisions in front of association counsel. Put the annual management fee review on your governance calendar. If your insurance renewal lands in the next two years, start the file now on the conditions a carrier is likely to flag, because SB 1301 only helps the association that is ready to remediate. And if you sit on a board where these documents have not been opened in a decade, understand that every one of these bills was written for an association like yours.
I will publish what he signs.
Sacramento passes it. You live with it.
Too curious to retire, too stubborn to be put out to pasture.
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