Since AB130’s enactment on July 1, 2025, this small bill has left community associations with a big question: how does this bill affect future litigation? For community associations, this bill is likely to fuel more disputes, increase pre-litigation friction, and ultimately drive more matters to the courtroom.

One of the most notable changes in AB130 is the reduction of allowable fines for common violations. Although intended to promote “fairness” and prevent what some legislators viewed as excessive penalties, the practical effect for community associations is very different. By lowering fines, AB130 unintentionally removes one of the most effective tools community associations have for achieving compliance with their Governing Documents—and in doing so, sets the stage for more violations, more disputes, and ultimately more litigation.

For better or for worse, fines work because they create consequences for those who fail to follow the Governing Documents. When owners know a violation will cost them a meaningful amount of money, they tend to comply more quickly. But with AB130 reducing fines, many violations will now be too minor to influence owner behavior, or the fine will be cheaper to ignore than to fix. In other words, AB130 now makes noncompliance with the Governing Documents a low-risk choice that will only cost $100 should an owner choose not to comply. When owners feel there is no downside to a violation, violations will increase—and with them, the disputes and enforcement actions that may ultimately end in litigation.

Because fines are now less effective in gaining owner compliance, boards may have no choice but to move from routine enforcement to seeking injunctive relief through litigation. Historically, fines have served as a pre-litigation buffer to encourage owner compliance because owners rarely want fines to accumulate. However, now that AB130 removes that buffer, community associations’ options for achieving compliance are reduced, and they will be forced into court sooner and more often.

Ironically, the reduced fines may create more unfairness than the fairness they were enacted to address. Reduced fines do not reduce conflict; instead, they reduce compliance by removing a key buffer in owner disputes. By removing this buffer, community associations can expect disputes to escalate more quickly and ultimately cost more as they head to the courtroom more often.