California community associations already operate in one of the most regulated environments in the country, and each legislative session brings proposed laws that could further affect how Boards govern, budget, enforce rules, and maintain their communities. The 2027 legislative session includes several bills that may have a meaningful impact on common-interest developments—from reserve funding to cooling systems and electric vehicle charging stations. It is important that Boards not wait until new laws take effect to understand their implications, but rather anticipate how new legislation could impact their association and be prepared to act accordingly.

▪ Assembly Bill 2050 – Association Financial Planning Is a Priority
One of the most significant pieces of proposed legislation this year is Assembly Bill 2050 (“AB 2050”), which would establish new minimum reserve funding requirements for California homeowners associations.

Under this proposed legislation, an association’s reserve study would need to identify the minimum annual contribution necessary to prevent the reserve balance from falling below zero over the next 30 years. If a reserve fund is projected to fall below zero over the next 30 years, the association may be required to contribute a minimum of 15% of its annual operating budget to reserves to ensure proper funding over time.

In practical terms, this new law would limit an association Board’s ability to underfund reserves in the interest of keeping assessments low. Associations with significantly underfunded reserves would need to increase regular assessments, adjust spending, or consider other funding options to meet the required reserve contributions. For many associations, AB 2050 would represent a meaningful change in the way reserve funding decisions are made. Boards have traditionally had significant discretion in balancing operating expenses and reserve contributions in determining homeowner assessment amounts. AB 2050 would establish a more defined minimum funding requirement tied directly to the association’s 30-year reserve projections.

Whether or not AB 2050 becomes law in its current form, the message is clear: California policymakers continue to focus on the long-term financial health of community associations, and Board Members should be doing the same. Adequately funding reserves is not simply an accounting exercise – it is the responsible stewardship of the community. Deferring common area maintenance to artificially suppress assessment increases may feel like the easier or more popular decision in the short term, but it will undoubtedly result in large special assessments, bank loans, and significant financial burdens for homeowners in the future. If passed, associations would need to be compliant by 2032, which means Boards would need to perform an in-depth analysis now to determine if their reserve balance is projected to drop below zero at any point in the next 30 years, and if so, formulate a strategic plan to properly fund reserves to ensure compliance by the deadline.

▪ Assembly Bill 1684 —Limiting HOA Restrictions on Cooling Systems
Under existing California law, associations may regulate aspects of an owner’s separate interest through
their governing documents, architectural guidelines, and rules and regulations. While mobile home
residents already receive statutory protection for the installation and use of qualifying cooling systems,
those protections have not generally applied to owners within common interest developments governed
by the Davis-Stirling Act.

Assembly Bill 1684 (“AB 1684”) would extend protections to homeowners of condominium communities
and planned developments. The bill would make provisions in governing documents, architectural
guidelines, deeds, and certain other agreements void and unenforceable if they effectively prohibit or
restrict an owner’s installation, upgrade, replacement, or use of cooling systems in the owner’s separate
interest that comply with state and local building codes.

If enacted, the bill would also prohibit an association from:

• Charging a member a fee in connection with the installation, upgrade, replacement, or use of a
  cooling system;
• Requiring a member to use a particular cooling system, system type, contractor, or product;
• Claiming a rebate, credit, or commission related to a member’s cooling system installation,
  upgrade, replacement, or use; or
• Requiring a member to remove a cooling system or preventing the member from replacing or
  upgrading an existing cooling system.

AB 1684 would not prevent an association from enforcing applicable state and local building code
requirements. Associations may also address systems that require a permit the owner has not obtained
or that cause damage to the common area when the owner refuses to repair the damage. An association
that willfully violates the law could be liable to the affected owner or actual damages, a civil penalty up to
$2,000.00, and reasonable attorney’s fees and court costs.

Boards should review their governing documents, architectural guidelines, and enforcement practices for
provisions that could prohibit or improperly restrict residential cooling systems.

In particular, associations may need to:

• Remove or revise blanket provisions on window units, portable air conditioners, evaporative
  coolers, and similar equipment;
• Update architectural procedures to focus on legitimate code compliance, permitting, safety, and
  common-area damage concerns;
• Confirm that enforcement communications and violation notices do not conflict with the new
  statutory protections; and
• Consult association legal counsel before denying a cooling system request or taking enforcement
  action involving a qualifying system.

In summary, the bill does not eliminate an association’s ability to enforce lawful safety, building code,
permits, and property damage requirements; rather, it limits the association’s ability to use its rules to
prevent owners from obtaining compliant cooling systems in their separate interests.

▪ Senate Bill 1267 — EV Chargers in Common Areas: Further Liability Protection for Associations
Current California law allows an owner in a condominium community or planned development to install
an electric vehicle (“EV”) charging station in common areas for the owner’s exclusive use, subject to
statutory requirements and association approval procedures. The association may establish reasonable
conditions addressing the station’s location, installation, permits, electrical capacity, insurance,
maintenance, and allocation of costs. The owner and any future owner of the charging station is
responsible for damage to the station, common area, or other owners’ property resulting from its
installation, maintenance, repair, removal, or replacement. The owner must also maintain liability
insurance and provide the association with a certificate of insurance within 14 days after approval.

Senate Bill 1267 (“SB 1267”) would provide additional liability protection for associations when an EV
charging station is privately owned and located in association common area or exclusive use common
area.

If enacted, the bill would:

• Clarify that a qualifying association is generally protected from civil liability for injuries or damage
  arising from an EV charging station, or its use, when the association does not own the station,
  subject to statutory exceptions and requirements;
• Expand the owner’s responsibility for damage to include damage resulting from the use of the
  charging station, not only damage caused by its installation, maintenance, repair, removal, or
  replacement;
• Permit an association to require the owner to enter into a maintenance and indemnity agreement
  addressing responsibility for injury, damage, maintenance, repair, removal, insurance, and related
  obligations; and
• Require the installer to indemnify or reimburse the association and its members for certain loss or
  damage caused by the installation of the charging station.

In practical terms, SB 1267 is intended to reinforce that the owner of a privately installed charging station
bears responsibility for risks associated with that charging station.

In Conclusion – Stay Informed, Be Prepared
The legislative process is fluid, and bills can be amended, delayed, defeated, or adopted with revisions.
While there is no action for Boards to take at this time regarding the above-mentioned proposed bills, it
is important to follow proposed legislation so that you’re prepared should these new laws pass.
Additionally, being informed regarding proposed legislation gives you the opportunity to make your voice
heard by contacting your association’s respective California representatives. You can find your local
representative’s contact information here: Find Your California Representatives. PMP will continue to
keep you informed of both proposed and new legislation, and you can also monitor proposed legislation
via the Community Associations Institute California Legislative Action Committee (CAI-CLAC).

For questions related to association governance, reserve planning, or preparing your community for
legislative changes, please contact your PMP Community Manager or your association’s attorney.