HOA Legislation Update: What's Moving Through Sacramento Right Now

If you sit on an HOA board — or you're just a homeowner who wants to understand what's shaping your community's future — 2026 has been a busy year in the California Legislature. Several bills currently working their way through Sacramento could change how associations set assessments, disclose fees, fund reserves, and handle everything from construction defects to management contracts.

We track this closely at Welcome Property Management because these bills, if passed, will directly affect how we serve your community. Here's a plain-language rundown of what's on the table. (Note: none of these have become law yet — most are still moving between committees, and the details can change before a final vote. This is general information, not legal advice — talk to your association's attorney about how any of this might apply to your community.)

Capping how much assessments can rise (SB 1007)

This bill would limit how much an HOA can raise regular assessments each year without a member vote. The original version tied increases to inflation only; after pushback from industry groups (including the California Association of Community Managers, or CACM), it's been amended to allow increases up to 8% without a vote. It would also require associations to separately disclose management fees and show, in plain terms, what assessments actually pay for. The concern from managers and builders alike is that capping increases too tightly could leave associations unable to keep up with rising insurance and maintenance costs.

A new duty of care for managers (SB 1238)

Backed by the California Association of Realtors, this bill originally would have made community managers personally liable to homeowners under a “fiduciary duty” standard — a high bar typically reserved for financial advisors and trustees. After negotiation, that's been softened to a “duty of care” standard, and new disclosure requirements around things like reserve studies and exterior building conditions would rely on existing documents rather than requiring managers to make subjective judgment calls.

Better notice when where you send your payment changes (AB 2439)

This one was inspired by a real problem: homeowners who didn't get notice that their association changed management companies or bank accounts, missed payments as a result, and ended up with liens on their homes. The bill would require associations to notify members — by email if they've opted in, or by mail otherwise — whenever the payment process changes. It would also bar associations from restricting parking on public streets. Board members could face financial penalties for non-compliance, which is still a point of concern for the industry.

Reserve funding requirements (AB 2050)

Starting in 2032, this bill would require associations to keep reserve accounts funded well enough that the balance doesn't project to hit zero over a 30-year horizon. Associations that fall short would need to contribute a minimum share of their annual budget to reserves, and in some cases could need a member vote to raise a special assessment beyond the current 5% cap. The goal is to prevent underfunded reserves — a common source of financial trouble for HOAs — though affordability advocates worry about the impact of special assessments on homeowners.

Changes to construction defect claims (AB 1903)

This bill would make it harder for associations to pursue construction defect claims, requiring actual damage before a claim can be filed and limiting an association's ability to recover investigation costs. It would also let builders use their own chosen inspector to certify a building at construction — which could then shield the builder from future claims. This is one industry groups are actively opposing.

Manager licensing and fee transparency (AB 739)

After an earlier attempt to require all community managers to become licensed real estate brokers was defeated, this bill returned with a narrower focus: requiring board members to complete education hours early in their term, and requiring management companies to make fee information available to homeowners who request it in writing.

What this means for your community

None of these bills are final. Each still has to clear additional committees and votes before it could become law, and the language is likely to keep changing along the way. We'll continue to follow these bills as they move through the legislature and will keep our community boards updated on anything that could affect your association's budget, governance, or operations.

If you have questions about how a specific bill might affect your community, or you'd like to talk through your association's reserve funding or assessment strategy, reach out to your Welcome Property Management team.

This post is for general informational purposes only and does not constitute legal advice. Source: California Association of Community Managers (CACM) Legislative Update. None of these bills have become law; each is still moving through the legislative process and its details may change.