SB 1007 - Fair and Affordable HOAs

HOAs represent an ever-growing share of California’s housing stock and membership is not optional. It’s automatic.

SACRAMENTO - Today, Senator Caroline Menjivar (D-San Fernando Valley) introduced Senate Bill 1007 - Fair and Affordable HOAs to protect affordability for the approximately 14 million Californians living under a homeowner association (HOA). Common sense guardrails in SB 1007 can ensure homeowners know what their HOA fees fund, protect them from exorbitant increases of certain fees without homeowners’ approval, and guarantee that homeowners who are facing fines can access the HOA Board’s evidence against them. 

“During a time when Californians are gripped by dual threats, an unprecedented housing shortage and a crippling affordability crisis, many find their homeownership dreams destabilized by the volatile and sometimes arbitrary escalation of homeowner association fees,” said Senator Caroline Menjivar. “Nearly 67% of all newly built single-family homes nationwide are a part of HOAs. Protecting homeowners’ financial stability requires more HOA oversight, including rules for transparency, financial accountability, and due process, keeping these monthly costs reasonable and predictable for homeowners who are on a tight budget."

HOAs largely operate outside of state oversight but hold tremendous power over many homeowners' ability to pay their fees, in some extreme cases even leading to foreclosures. Stories of refusal or significant delays to repair maintenance issues, fines for alleged violations with an unclear process to contest, and ever-growing HOA duties without explanation for the increase are adversely impacting household budgets across the state. 

SB 1007 seeks to mandate the disclosure of third party management company costs, require HOAs to provide a clear, concise breakdown of what their fees fund, limit the HOA boards’ authority to unilaterally raise HOA fees without a homeowners vote to the rate of inflation, and establishes the right of a homeowner who is facing fines to view any evidence the HOA Board is reviewing to make their determination.

“Associations aren't social clubs.  They are quasi-governmental entities – like school boards or water districts – though they operate with little state oversight. They are self-financed with homeowner assessments that, under current law, can increase 20% a year. Yet homeowners have a hard time finding out how their money is being spent by HOA boards or why fees are increasing," said Marjorie Murray, President of the Center for California Homeowner Association Law.  "Senate Bill 1007 aims to address these problems of affordability and accountability impacting association families across the state." 

"As homeownership becomes increasingly hard for many California consumers to attain, HOAs far too often exacerbate this challenge. Many HOAs impose large and rapidly increasing monthly fees, overly strict guidelines and rules and some HOAs even foreclose on their own members for relatively small amounts of back debt or for failing to adhere to obscure processes," said Robert Herrell, Executive Director of the Consumer Federation of California. "Senator Menjivar's bill will bring much-needed transparency and enhanced consumer protections to these associations by ensuring clear operational and cost disclosures, fee hike guardrails, and stronger protections for homeowners facing claimed violations."

Senator Menjivar and bill co-sponsor Consumer Federation of California are teaming up once again, expanding on their previous legislative work together to deliver increased consumer protections and preserve affordability for Californians.

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