California HOA Law Changes 2021–2025: What Every Board Needs to Know

<h2>Overview of California HOA Law Changes 2021–2025</h2>

<p>California community associations are governed by the Davis-Stirling Common Interest Development Act (Civil Code § 4000 et seq.), which is one of the most detailed and frequently amended HOA statutes in the country. Between 2021 and 2025, the California Legislature enacted a series of significant changes — affecting ADU rental rights, mandatory balcony inspections, election procedures, reserve studies, solar and EV charging rights, and rental restrictions. California boards that have not kept current with these changes face significant legal exposure. Here's a comprehensive session-by-session breakdown.</p>

<h2>2021 Legislative Session</h2>

<h3>SB 391 — ADU Rental Rights (AB 3182 Cleanup)</h3>

<p>SB 391 reinforced and clarified AB 3182 (2020) by explicitly prohibiting HOAs from adopting rules that effectively ban the rental of accessory dwelling units (ADUs) or junior ADUs. Associations may not require owner-occupancy as a condition of renting an ADU. Any covenant, rule, or regulation that conflicts with this provision is void and unenforceable as a matter of law. This means that even if your CC&amp;Rs contain a rental prohibition or owner-occupancy requirement that predates 2020, it cannot be enforced to prevent the rental of a properly permitted ADU. Boards that receive ARC requests for ADU construction should consult counsel to ensure their review process does not impermissibly restrict ADU rental rights.</p>

<h3>AB 1101 — Financial Controls and Reserve Fund Rules</h3>

<p>AB 1101 strengthened financial oversight requirements for California community associations. Associations with annual assessments over $75,000 are now required to use two-signature approval for disbursements over $10,000, reducing the risk of unauthorized spending. The bill also expanded reserve fund requirements and tightened the definition of what constitutes a proper reserve expenditure under Civil Code § 5510. Boards must ensure that reserve funds are used only for the capital components identified in the association's reserve study — not for operating expenses or other purposes.</p>

<h2>2022 Legislative Session</h2>

<h3>Inspector of Elections Requirements — SB 323 Full Implementation</h3>

<p>Beginning January 1, 2022, all California HOAs with 50 or more separate interests were required to use a third-party Inspector of Elections for board elections. The Inspector must be a genuinely independent third party — not a board member, officer, director, candidate, management company employee, or anyone with a financial interest in the outcome. Associations must adopt election rules that comply with Civil Code §§ 5100 through 5135. Boards that have been using the property manager or a board member to count ballots are in clear violation of California law. The Inspector of Elections requirement is one of the most frequently violated Davis-Stirling provisions — and one of the most commonly litigated.</p>

<h3>AB 1410 — Rental Caps and Short-Term Rental Restrictions</h3>

<p>AB 1410 prohibited California HOAs from adopting rules that impose rental caps below 25% of the total number of units, or that restrict rentals to less than 30 days on any platform. There is an important exception: rental cap restrictions that were in place before January 1, 2022, or were adopted by the required member supermajority vote, remain valid. Boards considering rental cap amendments must carefully analyze the pre-existing CC&amp;R provisions and the required approval thresholds. This bill also extended ADU rental protections and clarified that owner-occupancy requirements cannot be applied to ADU units regardless of any CC&amp;R language.</p>

<h2>2023 Legislative Session</h2>

<h3>AB 1033 — ADU Condominiumization</h3>

<p>AB 1033 permitted local agencies to allow ADUs to be sold separately as condominiums from the primary unit, effective with a local ordinance opt-in. HOAs in jurisdictions that adopt this provision may encounter situations where a newly condominiumized ADU creates a new unit within the existing development — potentially affecting assessment obligations, voting rights, and use restrictions. Boards in jurisdictions considering ADU condominiumization ordinances should consult with legal counsel proactively about amendments to their governing documents that may be needed.</p>

<h3>SB 326 — Balcony and Exterior Elevated Element Inspections Now Required</h3>

<p>SB 326 (enacted 2019) became fully operationally effective in 2023, with the first inspection deadline of January 1, 2025. All California condominium associations with 3 or more units must have all exterior elevated elements inspected — balconies, decks, walkways, stairways, guardrails, and any similar elevated structure that extends beyond the building wall and is designed for human occupancy or use. Inspections must be performed by a licensed structural engineer or licensed architect. The written inspection report must be maintained in the association's records and disclosed to all unit owners. If the inspector identifies a condition that poses an immediate threat to life safety, repairs must begin within 180 days. SB 326 compliance is non-negotiable — boards that have not completed their first inspection cycle are now in violation of California law.</p>

<h2>2024 Legislative Session</h2>

<h3>AB 2159 — Election Rules — Candidate Nomination Update</h3>

<p>AB 2159 amended Civil Code § 5105 to clarify candidate nomination procedures for HOA board elections, including the deadlines for submitting candidate statements and the rights of write-in candidates. The bill established that associations must mail or deliver candidate nomination forms to all members at least 30 days before the close of the nomination period. Candidate statements submitted on time must be included in the election mailing to all members. Associations must update their election rules and calendars to reflect the revised nomination timelines enacted by AB 2159.</p>

<h3>SB 900 — Enhanced Reserve Study Requirements</h3>

<p>SB 900 enhanced California reserve study requirements by requiring a full reserve study (not just an update) every 3 years for associations with over 100 separate interests. The study must include a 30-year projection of reserve needs and a funding plan identifying the annual contribution level needed to achieve and maintain a fully funded reserve. Annual reserve funding disclosures to members were also expanded — the budget disclosure must now include the current percent funded and the recommended annual contribution per the most recent reserve study. Boards that have been conducting reserve study updates in lieu of full studies every 3 years must update their reserve study schedule.</p>

<h2>2025 Legislative Session</h2>

<h3>HOA Manager Licensing — Study Completed</h3>

<p>The California Bureau of Real Estate completed its feasibility study on licensing requirements for HOA managers, with legislation expected in the 2026 session. California is currently one of the few large states without mandatory manager licensing. Boards should expect professional management licensing requirements — similar to Nevada's CAMR program — to take effect within the next 1-2 legislative cycles. Associations currently working with unlicensed managers should begin evaluating management company qualifications proactively.</p>

<h3>Civil Code § 5975 — Attorney Fees in Enforcement Actions</h3>

<p>Updated guidance on California's attorney fee reciprocity provision clarified that prevailing parties in Davis-Stirling enforcement actions — whether associations or homeowners — are entitled to reasonable attorney fees. Courts have applied this provision expansively, making boards more cautious about pursuing enforcement actions that lack a clear governing document basis. Boards should document every enforcement decision carefully and ensure that violations cited have a specific, articulable governing document basis before proceeding with formal enforcement.</p>

<h2>Board Action Checklist</h2>

<ul>

<li>Complete SB 326 balcony inspection — if not done, engage a licensed structural engineer immediately</li>

<li>Engage an independent Inspector of Elections for all board elections (required for associations with 50+ units)</li>

<li>Update election rules to comply with Civil Code §§ 5100–5135 nomination and ballot procedures</li>

<li>Audit CC&amp;Rs for ADU rental restrictions — remove or amend any provision that prohibits ADU rentals</li>

<li>Review rental cap provisions — ensure they meet the 25% minimum threshold or document their pre-2022 adoption</li>

<li>Schedule a full reserve study if one has not been performed within the past 3 years (100+ unit associations)</li>

<li>Implement two-signature approval for disbursements over $10,000 (associations with annual assessments over $75,000)</li>

<li>Review enforcement actions for Civil Code § 5975 attorney fee exposure — document all violation bases clearly</li>

</ul>

<h2>How APM Helps California HOA Boards Stay Compliant</h2>

<p>APM provides remote HOA and condo management for California communities in the San Francisco Bay Area, Los Angeles, San Diego, Sacramento, and across the state. Our Davis-Stirling compliance team tracks annual legislative changes and ensures client election procedures, SB 326 inspection schedules, reserve studies, and enforcement policies remain aligned with current California law. <a href="/remote-hoa-management/california">Learn about our California remote management services</a>.</p>

<p><em>Legal disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed California attorney for Davis-Stirling guidance specific to your community.</em></p>