California HOA Legislation 2025–2026: AB-21, SB-681, SB-410 and What Every Board Must Know

Overview

California's 2025 legislative session was one of the most active in years for HOA law. Several bills targeted the Davis-Stirling Common Interest Development Act directly — proposing changes to board meetings, fine structures, disclosure requirements, and manager licensing. Some passed. Some died in committee. And at least one will be back in 2026.

This guide summarizes every significant 2025 bill affecting California HOAs, what it means for your board, and how to prepare. This is not legal advice — consult qualified HOA counsel for guidance specific to your community.

AB-21: Board Meeting Transparency (Died — But Coming Back)

**What it proposed:** AB-21 (DeMaio) was the most comprehensive Davis-Stirling governance bill of the 2025 session. Key provisions would have required:

• **Mandatory audio/video recording** of all open session board meetings, with recordings treated as association records and available to members on the same basis as written minutes
• **Notice at the start of every meeting** that the session is being recorded
• **Prohibition on informal board communications** — a majority of board members could no longer discuss, deliberate, or take action on association business outside an authorized meeting, even indirectly through intermediaries
• **Litigation disclosure in minutes** — if the association becomes involved in litigation, the court name and case number must be announced at the next meeting and included in executive session minute notes
• **Insurance claim disclosure** — boards would be required to announce any insurance claim or policy change at the subsequent open meeting
• **Free electronic distribution of minutes** — no charge for minutes delivered electronically
• **Strengthened meeting notice requirements** — notices must include instructions for members to obtain the agenda packet

**What happened:** AB-21 failed to advance out of committee in 2025. The author has stated his intention to reintroduce it in 2026. California HOA boards should treat the core concepts — especially mandatory recording and informal communication restrictions — as likely future law.

**What boards should do now:** Begin documenting board communications more formally. Ensure that substantive association business is not conducted through informal texts, email chains, or conversations among a majority of board members outside an authorized meeting. This is already a best practice under existing open meeting law; AB-21 would have codified stricter enforcement.

SB-681: $100 Fine Cap and Cure Opportunity

**What it proposed:** SB-681 (Wahab) would have imposed a $100 maximum fine per violation — regardless of what the association's fine schedule provides — and required boards to give members an opportunity to cure a violation before any fine could be imposed. Additional provisions included reducing the written notification period for discipline from 15 days to 14 days and prohibiting financial penalties related to ADU or JADU construction.

**What happened:** The bill passed out of the California Senate 28–10 and continued advancing through the legislative process.

**What boards should do now:** Review your current fine schedule. If your schedule includes fines above $100 for initial violations — as many do — begin discussing whether to voluntarily update your enforcement policies ahead of potential legislative mandate. More importantly, ensure your violation and hearing procedures already provide an opportunity to cure before fines are imposed, which is both a best practice and increasingly the direction of California law.

SB-410: SB-326 Balcony Inspection Reports Must Be Disclosed to Buyers

**What it proposed:** SB-410 (Grayson) requires HOAs to provide potential buyers with the exterior elevated element inspection reports required under Civil Code §5551 (SB-326). This closes a significant gap: SB-326 mandated inspections, but did not previously require that the resulting reports be included in the disclosure package provided to prospective purchasers.

**What happened:** The bill passed out of the Senate 34–0.

**What this means:** If your Bay Area condo or townhome association has completed its SB-326 inspection (as required by the January 2025 deadline for most associations), you will be required to provide the report to prospective buyers as part of the standard disclosure package. If you have not yet completed your SB-326 inspection, this becomes doubly urgent — you face both the compliance deadline and the inability to make legally complete disclosures in sales transactions.

**What boards should do now:** Confirm your SB-326 inspection has been completed and the report is in your association's records. Work with your management company to ensure the report will be included in future disclosure packages. If your inspection revealed deficiencies requiring repair, document the remediation plan and status — buyers will have this information.

SB-282: Heat Pump and Electric Appliance Restrictions Voided

**What it proposed:** SB-282 (Wiener) would void any restriction in HOA governing documents that prevented the replacement of a gas-burning appliance with an electric appliance, or that prevented installation or use of a residential heat pump water heater or heat pump HVAC system.

**What happened:** The bill passed out of committees but was sent to the suspense file in the Appropriations Committee.

**What this means for Bay Area HOAs:** Even without SB-282, California Civil Code §4745 already protects EV charging station installation rights. The direction of California law is clearly toward voiding restrictions on clean energy alternatives. Bay Area associations should review their CC&Rs for any provisions that would restrict heat pump installation or electric appliance replacement — these provisions are increasingly difficult to enforce and may create liability.

SB-770: EV Charging Station Insurance Requirement Changed

**What it passed:** SB-770 (Allen) deletes the prior requirement that an EV charging station owner in a common area or exclusive use common area provide a certificate of insurance naming the association as an additional insured. The previous requirement had created friction in EV charging station approvals.

**What this means:** EV charging station requests in California HOAs are now easier to approve from an insurance standpoint. Boards that previously denied or delayed EV charging applications based on insurance certificate requirements should revisit their policies. The association can still require appropriate installation standards and liability allocation.

SB-625: HOA Obligations in Disaster Reconstruction

**What it passed:** SB-625 (Wahab/Richardson) creates a streamlined ministerial approval process for rebuilding residential structures damaged in a disaster, establishes timelines for HOA review of development proposals, limits HOA covenant restrictions that would prevent reconstruction of disaster-damaged structures, and allows mobile home habitation on property for up to three years following a declared disaster.

**What this means for Bay Area HOAs:** Following the significant wildfire activity in California, this bill directly addresses HOA obligations in disaster reconstruction. Bay Area associations — particularly those in fire-adjacent areas — should review their architectural and design review procedures to ensure they can process disaster reconstruction proposals within the required timelines and do not have CC&R provisions that could be found to unreasonably restrict reconstruction.

AB-739: Manager Broker License Requirement (Died)

**What it proposed:** AB-739 (Jackson) would have required every managing agent of a common interest development to hold a California real estate broker license.

**What happened:** AB-739 was not heard in committee and appears dead for 2025. However, the concept of increased licensing requirements for HOA managers has been circulating in the California legislature for several years and may return in future sessions.

**What this means:** For Bay Area HOA boards, this is a reminder that professional management qualifications matter. When evaluating management companies, ask about their team's professional certifications (CACM, CMCA, AMS, PCAM), ongoing education, and compliance infrastructure.

Corporate Transparency Act: HOAs Now Exempt

**The background:** The Corporate Transparency Act (CTA) had created significant uncertainty and compliance burden for HOAs since 2024, with conflicting court rulings and regulatory guidance.

**The resolution:** On March 21, 2025, FinCEN issued an interim final rule removing the beneficial ownership information reporting requirement for U.S. companies and U.S. persons. Domestic HOAs (including California community associations) are now fully exempt from CTA reporting requirements. The focus has shifted entirely to foreign reporting companies.

**What boards should do:** No CTA filings are required for your California HOA. If your association began a CTA compliance process, you may discontinue it. Work with your association's counsel if you have questions about prior filings.

FAIR Plan Insurance: What Bay Area HOAs Need to Know

Several 2025 bills addressed the California FAIR Plan insurance crisis:

**AB-1:** Requires the Department of Insurance to periodically update regulations on building hardening measures and wildfire mitigation — passed the Assembly 79–0. This signals continued regulatory pressure on HOAs in wildfire-adjacent areas to implement hardening measures.

**AB-226:** Authorizes FAIR Plan to issue bonds to increase claims-paying capacity — passed the Assembly 77–0. This provides some stability to the FAIR Plan, which is the insurer of last resort for many California HOAs that have lost standard market coverage.

**What Bay Area HOAs with FAIR Plan coverage should do:** FAIR Plan policies should be treated as temporary, last-resort coverage — not a permanent insurance solution. Work with a broker experienced in HOA insurance to develop a path back to the voluntary market. Boards should document wildfire mitigation efforts (defensible space, ember-resistant vents, Class A roofing) as these factors influence underwriting in the voluntary market.

"Missing Middle" and "Gentle Density" Housing: Emerging HOA Issues

Two overlapping housing policy concepts are reshaping California's approach to residential development — and will increasingly affect HOA communities:

**Missing middle housing** refers to medium-density housing types (ADUs, condos, duplexes, fourplexes) positioned between single-family homes and mid-rise construction. California policy increasingly supports missing middle housing to address the housing shortage.

**Gentle density** encompasses ADUs, duplexes, fourplexes, townhomes, and other moderately dense developments that predate modern zoning restrictions.

**For HOA boards:** Expect continued legislative pressure to void HOA CC&R restrictions that prohibit or impede ADU construction, lot splits, and other gentle density housing types. SB-677 (Wiener/Wicks) — which would have required local agencies to ministerially approve certain housing developments and urban lot splits and voided HOA private restrictions that effectively prohibit them — did not make it out of committee in 2025 but reflects where California housing policy is headed.

Review your governing documents for restrictions that prohibit ADUs, lot splits, or housing conversions. These provisions may increasingly be at risk of being voided by future legislation.

What California HOA Boards Should Do Before January 2026

1. **Complete SB-326 inspection immediately** if not done — the deadline has passed and SB-410 now requires disclosure to buyers

2. **Review your fine schedule** for potential SB-681 compliance ahead of any new legislation

3. **Update EV charging policies** to reflect SB-770's removal of the insurance certificate requirement

4. **Review disaster reconstruction provisions** in your CC&Rs in light of SB-625

5. **Discontinue any CTA compliance efforts** — domestic HOAs are fully exempt

6. **Audit wildfire insurance** — FAIR Plan coverage should be a temporary bridge, not a permanent solution

7. **Watch AB-21 closely** — board meeting recording requirements are likely coming in 2026

Association Property Managers serves HOA and condo communities throughout the Bay Area and Michigan, and we stay current on every relevant California legislative development so your board doesn't have to. Contact us for a free proposal and compliance consultation.