Committee advances HOA transparency bill that would require homeowner votes for large assessment increases

Senator Menjivar presented SB 1007 to increase transparency in homeowner associations and to limit how much associations can raise regular assessments without a homeowner vote. She said the bill would require a clear front-facing budget comparison showing anticipated versus actual expenditures and require HOAs to provide evidence used when charging a homeowner with a violation.

Robert Harrell, executive director of the Consumer Federation of California, said the bill’s reforms are reasonable guardrails. “Transparency increasing it, especially with the opaqueness of budget and budget related documents, which is really the core thing that an HOA should be doing,” Harrell said.

Opponents representing community associations and managers cautioned that the proposed cap could make it difficult for associations to meet operating and insurance obligations. Louis Brown of the Community Associations Institute said many assessment increases respond to spikes in insurance or mandated inspections and that boards often have limited choices. “If you look at the Davis Sterling Act, associations are only allowed to budget for their operating expenses,” Brown said.

Committee members wrestled with the interplay between a cap on regular assessment increases and existing tools—special assessments and emergency assessments—that remain available for major repairs and urgent needs. The author said those exceptions would not be touched; special assessments and emergency assessments would still be available under current law.

Given continued negotiations on the precise cap and other details, Senate members voted to move SB 1007 out of committee with the author’s commitment to amendments and further discussions with opponents.