New California Bill Could Raise Fees for Millions of Homeowners
Summary
California is considering a new law called Assembly Bill 2050 that would make homeowners associations (HOAs) save more money for building repairs and maintenance. The law aims to prevent building problems like those that caused the Surfside condo collapse in Florida, but it could also lead to higher fees or special charges for homeowners.Key Facts
- The bill was introduced by Democrat Jessica Caloza and supported by Republicans and Democrats alike.
- Governor Gavin Newsom has until September 30 to decide if he will sign or veto AB 2050.
- AB 2050 requires HOAs to keep a 30-year reserve fund to pay for big repairs and maintenance.
- If the reserve fund falls below zero, HOAs must raise at least 15% of their annual budgets to rebuild the fund.
- If the HOA budget can’t cover these costs, they can charge homeowners special fees.
- HOAs must inspect buildings and common areas at least once every three years.
- The bill is a response to the 2021 Surfside condo collapse in Florida, which happened partly because of poor maintenance and lack of funds.
- Similar laws in Florida caused HOA fees to rise and condo prices to drop, making some owners sell their units quickly.
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