Current Status: Pending

FindHOALaw Quick Summary:

Existing law requires an association to prepare an annual budget report and a policy statement. Existing law also requires the association to either deliver to all members the full report or a summary of the report that includes specified information, on the first page, whenever the annual budget report or a policy statement is prepared.

This bill would amend Civil Code Section 5300 to require the annual budget report to include a high-level summary breakdown of what the regular assessments fund and a statement regarding compensation of a management company. The bill would also amend Civil Code Section 5320 to require a summary of an annual budget or policy statement to also include a high-level breakdown that describes what the regular assessments fund.

Existing law prohibits increases in regular assessments for any fiscal year, unless the board complies with certain requirements, including certain information in its annual budget report. Existing law prohibits an association from increasing regular assessments by more than 20 percent, without the approval of a majority of a quorum of members.

This bill would amend Civil Code Section 5605 to prohibit an association from increasing a regular assessment, unless the board includes the above-referenced information pertaining to regular assessments. The bill would, instead, prohibit a board from imposing a regular assessment for the association’s preceding year, adjusted for inflation, without the approval of the majority of a quorum members.

Existing law requires the association to notify a member 10 days before a meeting to consider or impose discipline on a member, or a monetary charge, as a means of reimbursing the association for costs incurred by the association in the repair of damage to the common area and facilities caused by a member. Existing law also  requires the notification to include, among other information, the nature of the alleged violation, or nature of the damage to the common area and facilities.

This bill would add Civil Code Section 5860 to require the association to make any physical evidence used to determine a violation of the governing documents has occurred available to the member at least 5 business days before the hearing or deadline for the member’s response, if the association seeks to impose a monetary penalty against a member for violation of the governing documents.

**SB-1007 was amended May 21, 2026 to cap regular assessment increases to 8% without approval of the members and to require that the annual budget report include a comparison of anticipated expenditures versus actual expenditures of the current fiscal year:
(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board may not impose a regular assessment that is more than 8 percent greater than the regular assessment for the association’s preceding fiscal year, adjusted for inflation, or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election.

(13) A comparison breakdown of the anticipated expenditures of the current fiscal year versus actual expenditures of the current fiscal year. These expenditures shall be organized in major categories at the discretion of the association that shall include, but are not limited to, reserve contributions, a third-party management company, utilities, landscaping, maintenance, and insurance. The association may comply with this paragraph by including the comparison breakdown in the pro forma operating budget pursuant to paragraph (1).

(14) (A) A statement of the compensation of a management company, if applicable.