SB 1007 would have cut California's HOA assessment increase cap to 8% — it died in June
SB 1007 would have cut California's HOA assessment increase cap to 8% — it died in June
2026-09-09 · California · Legislation · Did not pass
California homeowners associations may still raise regular assessments by up to 20 percent a year without a member vote. The bill that would have cut that to 8 percent passed the Senate on the closest vote of any common interest development measure this session, and then never received a hearing in the Assembly.1
SB 1007's last recorded action is dated June 24, 2026: “June 24 set for first hearing canceled at the request of author.” It missed the deadline, and the 2025–2026 session has since adjourned.
The 8 percent cap
Authored by Senator Caroline Menjivar with Senators Lena Gonzalez and Tim Grayson as coauthors, SB 1007 would have amended Civil Code sections 5300, 5320 and 5605 and added section 5860.2
The headline provision would have cut the cap on regular assessment increases without member approval from 20 percent to 8 percent greater than the preceding fiscal year's regular assessment. Annual increases would also have been conditioned on the board complying with new budget report disclosure requirements.
The budget disclosures
Section 5300 would have added to the annual budget report a comparison of anticipated versus actual expenditures for the prior fiscal year, broken out by major category — reserves, management, utilities, landscaping, maintenance and insurance — plus a statement of the compensation of a management company where one is engaged.
Section 5320 would have carried both requirements into the summary distributed to members where an association distributes a summary rather than the full report.
And an evidence rule before fining
New section 5860 would have required that, before imposing a monetary penalty, an association make any physical evidence used to determine the violation available to the member at least five business days before the hearing — expressly including digital metadata such as the time, date and location attached to photographs and recordings.
How it died
The Senate passed it 24–13 on May 27, 2026. Six Assembly and Senate Democrats joined Republicans in opposition. Senator Catherine Blakespear argued that energy and insurance costs, not board self-dealing, drive assessment increases.
The bill was received in the Assembly the same day and referred on June 4 to three committees — Housing and Community Development, Judiciary, and Appropriations. It returned from committee with author's amendments on June 15, and the June 24 hearing was cancelled at the author's request. Nothing followed.3
What this means for boards: three things stay as they were
The 20 percent limit in section 5605(b) is unchanged. A board may increase the regular assessment by up to 20 percent over the prior fiscal year's regular assessment without a member vote, subject to the statute's other conditions — including that the board has distributed the annual budget report.
This matters more in 2026 than it has in years. Insurance renewals and deferred maintenance are pushing California associations toward increases that would have been unusual a decade ago, and an 8 percent ceiling would have forced many of them to a membership vote. That vote requirement did not arrive.
The annual budget report's contents are unchanged. No anticipated-versus-actual comparison is required, and no management compensation statement. Boards that want to publish either may — and there is a case for doing so voluntarily in a year of large increases — but nothing compels it.
Note the adjacent development: AB 739, on the Governor's desk, would require an annual board review of a categorized management fee statement and make it an inspectable record. If signed, it delivers part of what SB 1007 proposed, by a different route and without the assessment cap attached.
No pre-hearing evidence disclosure rule exists. An association is not required to give a member physical evidence five business days before a disciplinary hearing, and the metadata provision does not exist. The general requirements of Civil Code section 5855 — notice at least 10 days before the meeting, stating the nature of the alleged violation, the date, time and place of the meeting, and the member's right to attend and address the board — are what govern.
A bill that passed one house and never got a hearing in the other
The procedural shape is a useful lesson for anyone tracking California legislation.
A three-committee referral is a signal in itself. Housing, Judiciary and Appropriations each represent a hearing to schedule, a vote to win and an analysis to survive, and the referral came on June 4 with the house-of-origin work already behind it. Cancelling the first hearing at the author's request left no realistic path to clear three committees before the deadline.
A bill can therefore pass a full house of the Legislature and never be heard by a single committee in the other. SB 1007 is the clean example from this session.
The market conditions that produced it
The reporting around the bill supplied context worth keeping, independent of the bill's fate: nearly one in ten California associations levied a special assessment in 2025, and special assessments of $40,000 to $60,000 per unit have been reported at some communities.
Building industry groups warned that an 8 percent cap risked underfunded associations and lender ineligibility — an argument that connects directly to AB 2050, the mandatory reserve funding bill now on the Governor's desk. The two measures pull in opposite directions: one would have constrained what boards can collect, the other would compel them to collect more.
Only one of them survived to reach the Governor.
What to watch next
SB 1007 cannot be revived. The two-year session has adjourned and a successor would be a new bill in December 2026 or later.
The question worth watching is whether a 2027 successor separates the pieces. The assessment cap drew the opposition; the budget transparency provisions and the evidence rule did not obviously do so, and both could travel independently in a bill that does not touch section 5605 at all.
Related California HOA Topics
- SB 1007, California Legislature — bill status (common interest developments: annual reports: assessments: discipline) ↩
- SB 1007, California Legislature — complete bill history, confirming no action after the cancelled June 24, 2026 hearing ↩
- SB 1007, California Legislature — bill text and Legislative Counsel's Digest (amending Civil Code §§ 5300, 5320, 5605; adding § 5860) ↩
- CalMatters, 'California bill would cap HOA fee increases' (June 2026) — floor vote detail and opposition ↩
Stay on top of California HOA law
Every week: new California legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.