Newsom Vetoes Two California HOA Bills: AB 2439, SB 1238

California Governor Gavin Newsom vetoed two homeowners association bills on September 20, 2026, rejecting AB 2439 on assessment collection and public streets and SB 1238 on managing agent duties. Neither became law, and the Davis-Stirling Act governs unchanged.

Information last verified on September 24, 2026.

Status: Both bills were vetoed on September 20, 2026. Neither took effect, and the Davis-Stirling Act is unchanged.

Jurisdiction scope: This article covers California only, and only common interest developments governed by the Davis-Stirling Common Interest Development Act, which includes most condominium projects, planned developments and stock cooperatives in the state. It does not describe HOA law in any other state, and it does not cover rental housing.

What Happened

Governor Gavin Newsom returned Assembly Bill 2439 and Senate Bill 1238 to the Legislature without his signature on September 20, 2026. Both veto messages are dated that day and are posted on the Governor's office website.

The legislative histories confirm the outcome. The AB 2439 history file shows a final entry of "Vetoed by Governor" on 09/20/26. The SB 1238 history file shows "Vetoed by the Governor" on 09/20/26, followed by a Senate entry the same day reading "Consideration of Governor's veto pending."

Neither bill was a close call in the Legislature. AB 2439, introduced by Assembly Members Blanca Rubio and Lowenthal with Assembly Members Kalra and Pacheco as coauthors, passed the Assembly 74 to 0, passed the Senate 32 to 5, and cleared concurrence in Senate amendments 76 to 0. SB 1238, introduced by Senator Wahab, passed the Senate 36 to 2, passed the Assembly 76 to 0, and cleared concurrence 39 to 0.

Under Article IV, section 10 of the California Constitution, a vetoed bill returns to its house of origin, and it becomes a statute only if each house then passes it again with two-thirds of the membership concurring. Absent that, both bills are dead for this session. The practical consequence for California homeowners and board members is simple: the rules that applied on September 19 are the rules that apply today.

What Each Bill Would Have Changed

AB 2439: public streets, payment notices and collection liability

AB 2439 was an act to amend Civil Code sections 5655 and 5690, and to add section 4755.

New section 4755 would have provided that, "Except for restrictions to enforce public health and safety standards and requirements imposed by local authorities, the governing documents shall not impose restrictions on a member's use of public streets." That is the provision aimed at associations that police parking and access on streets the public owns.

The amendments to section 5655 were the heart of the bill. Current section 5655 has only three subdivisions: payments apply to assessments first and only then to collection costs, attorney's fees, late charges and interest; an owner may request a payment receipt; and the association must publish an overnight payment address in its annual policy statement. AB 2439 would have added four more.

Under the proposed subdivision (d), an association would have had to give members individual notice within 60 days whenever the person or entity authorized to receive assessment payments changed, by electronic delivery for members who opted into it and otherwise by first-class mail evidenced by a certificate of mailing. Proposed subdivision (e) would have required certified mail with return receipt requested if a member then missed the next two consecutive assessment payments, unless the member had affirmatively responded to the earlier notice. Proposed subdivision (f) would have required the association to keep proof of those notices for five years and to supply that proof to a requesting member at no charge.

The amendments to section 5690 added the enforcement teeth. Current section 5690 says only that an association that fails to follow the pre-lien procedures must recommence the notice process before recording a lien and must bear the cost of doing so. AB 2439 would have added a subdivision making the association liable to the owner for the reconveyance fee "and any costs of the owner of the separate interest associated with the association's failure to comply," and a further subdivision making the board liable to the owner for a civil penalty of one thousand dollars on a third failure within a five-year period, with general notice to the membership of that failure.

SB 1238: managing agent duty of care, disclosure and reserves

SB 1238 was an act to amend Business and Professions Code sections 11500 and 11501, and to amend Civil Code sections 4525, 5200, 5510, 5550, 5551, 5560 and 5565, and to add Civil Code section 5390.

The provision the Governor singled out is the new section 5390, which would have read: "Any managing agent, including its employees, that facilitates activities pursuant to Sections 5300, 5310, and 5500, or other activities pursuant to this part that are authorized by the board, owes a duty of care that is prudent and provides the highest good faith effort to the association and its members."

Those three cross-referenced sections are the association's core financial reporting duties: section 5300 requires the annual budget report, section 5310 requires the annual policy statement, and section 5500 requires the board's monthly review of operating and reserve account reconciliations, budget-to-actual figures, bank statements and the delinquent assessment receivable report. The bill would also have revised the definition of management services in Business and Professions Code section 11500 to cover acts performed by an agent, including a managing agent and its employees, in an advisory capacity for an association.

The rest of the bill was housekeeping around resale disclosure and reserves. It would have required an association, on request, to give a selling owner or their agent the annual budget report, financial statement review, annual policy statement and the most recent inspection report as soon as practicable, and would have required the seller to point a purchaser, on separate request, to where facts about exterior elevated elements and the number of units affected appear in that report.

Why the Governor Said No

Both veto messages run to the same objection: the drafting left a legal standard open-ended, and open-ended standards produce litigation that homeowners pay for.

On AB 2439, the September 20, 2026 veto message states:

"I support protecting homeowners from improper collection practices and ensuring they know where to make their assessment payments. However, this bill would make an association liable for "any costs" a homeowner incurs because the association failed to follow assessment-collection procedures. The bill neither defines nor limits those costs. This broad standard could create uncertainty, invite disputes and litigation, and impose costs on associations and their members disproportionate to the underlying violation."

The message then turns to the civil penalty:

"The bill also makes the board liable for a $1,000 civil penalty when an association commits a third specified notice violation within five years. Existing law generally places this type of liability on the association. The bill does not explain how liability against "the board" would operate or how it would apply when board membership changes between violations. This uncertainty could discourage residents from volunteering to serve and make effective association governance more difficult."

The same message also objects that the certificate of mailing and certified mail with return receipt requirements "could impose substantial administrative costs that would ultimately be passed on to homeowners."

On SB 1238, the September 20, 2026 veto message identifies a conflict-of-duty problem:

"A managing agent acts on behalf of the association, while the association owes duties to its members. Establishing a duty owed to both the association and its individual members could create conflicting obligations when a member's interests diverge from those of the community as a whole. The resulting uncertainty could invite litigation, the costs of which homeowners would ultimately bear."

That message adds that the provision "leaves unclear how the new statutory duty of care would interact with a managing agent's existing obligations to the association under common law," and that several remaining provisions "overlap with existing requirements governing reserve planning and homeowners' access to association records, limiting their added benefit." It closes:

"California should improve transparency and accountability in homeowners associations without creating legal uncertainty that could invite litigation and increase costs for homeowners."

Notably, neither message disputes the goal. Both object to the mechanism.

What California HOA Law Still Requires

This is the part that actually governs a homeowner's next assessment notice or records request. None of it changed.

The act itself. Civil Code section 4000 provides that "This part shall be known and may be cited as the Davis-Stirling Common Interest Development Act." It runs from section 4000 through section 6150.

Delinquency and what can be charged. Under Civil Code section 5650, regular and special assessments are delinquent 15 days after they become due unless the declaration allows longer. The association may recover reasonable costs of collection including reasonable attorney's fees, a late charge capped at 10 percent of the delinquent assessment or ten dollars, whichever is greater, unless the declaration sets a smaller one, and interest at an annual rate not to exceed 12 percent, commencing 30 days after the assessment becomes due.

How payments are applied. Civil Code section 5655 still requires that a payment go first to the assessments owed, and only after those are paid in full to fees, collection costs, attorney's fees, late charges or interest. An owner may request a receipt showing the date of payment and who received it, and the association must publish an overnight payment address in its annual policy statement. What did not survive is the new duty to announce a change in payee, so a homeowner who suspects the payment address has changed should confirm it directly with the association rather than assume a notice is owed.

The 30 day pre-lien notice. Civil Code section 5660 still requires the association to notify the owner of record in writing by certified mail at least 30 days before recording a lien, and the notice must include a general description of the collection and lien procedures and how the amount was calculated, an itemized statement of the delinquent assessments, fees, attorney's fees, late charges and interest, a statement of the owner's right to request a meeting with the board under section 5665, the right to use the association's internal dispute resolution process, and the right to alternative dispute resolution. It must carry the statutory warning that a separate interest placed in foreclosure may be sold without court action.

The board vote. Civil Code section 5673 requires the board itself to approve a decision to record a lien by majority vote of the directors in an open meeting, and to record that vote in the minutes. That decision cannot be delegated to a collection agent.

The recorded notice. Civil Code section 5675 requires the notice of delinquent assessment to state the amount owed, a legal description of the owner's separate interest and the name of the record owner, and requires a copy of the recorded notice to be mailed by certified mail to every record owner no later than 10 calendar days after recordation.

Enforcement. Civil Code section 5700 provides that after 30 days following recordation, the lien may be enforced in any manner permitted by law, including sale by the court, sale by the trustee designated in the notice of delinquent assessment, or sale by a substituted trustee.

The existing remedy for procedural failure. Civil Code section 5690 still requires an association that failed to follow these procedures to recommence the notice process before recording a lien, at the association's cost and not the owner's. That remedy survives. The expanded damages and the $1,000 board penalty do not exist.

Records access. Civil Code section 5200 still defines association records and enhanced association records, and section 5205 requires the association to make them available for inspection and copying by a member or the member's designated representative on the timetable in section 5210. Under section 5210, records are subject to inspection for the current fiscal year and each of the previous two fiscal years, with current fiscal year records produced within 10 business days of the request and prior-year records within 30 calendar days.

Managing agents. The managing agent provisions in Civil Code sections 5375 through 5385 are untouched, including section 5380, which requires a managing agent who receives association funds to place them in a trust fund account at an insured California financial institution and hold them until disbursed on the association's written instructions.

Related reading on adjacent California property and residency rules: our guides to California landlord-tenant law and to searching California property records cover the documents that often surface in an HOA dispute. For the surveillance questions that come up in common areas, see HOA security camera rules. Readers comparing residency rules across jurisdictions can start from the state-by-state landlord and tenant hub.

Analysis: Why This Matters

The following is analysis from the Recording Law Editorial Team.

Two things stand out about this pair of vetoes.

The first is that neither veto is a defense of associations. Read the AB 2439 message again: the Governor opens by saying he supports protecting homeowners from improper collection practices and supports making sure they know where to send payments. The objection is to an undefined liability standard and to a penalty aimed at a body whose membership rotates. That is a drafting objection, not a policy reversal, and it points at a real problem the bill created. A board is not a legal person that persists across elections in the way an association is, so a penalty that accrues on a third violation over five years would have attached to volunteers who may have joined after the first two.

The second is the shape of the SB 1238 objection, which is more structurally interesting. A managing agent is the association's contractor. The association, in turn, owes duties to its members. Stacking a direct duty to individual members on top of the agency relationship creates the exact scenario the message describes: a member's interest diverging from the community's, with the agent owing both. That is a genuine conflict, not a hypothetical one, and it shows up constantly in assessment disputes where one owner's position is adverse to the reserve position of everyone else.

What that leaves is a practical gap that homeowners should understand clearly. The lien procedure in the Davis-Stirling Act is detailed and protective on its face, but its enforcement remedy is thin. Section 5690 tells an association that botched the notice process to start over and eat the cost. That is a do-over, not damages. AB 2439 was an attempt to put a price on the failure, and it did not survive. For now, a homeowner whose association skipped a step is back to the recommencement remedy plus whatever general legal theories are available, and the association's exposure for the owner's out-of-pocket costs remains unsettled.

There is also a documentation lesson here for anyone in a common interest development. Because the payee-change notice requirement died, the burden of knowing where an assessment payment is supposed to go stays with the owner. Keep receipts under section 5655(b), keep the annual policy statement that carries the overnight payment address, and use the section 5205 and 5210 inspection rights early rather than after a lien is recorded. Records requests are far more useful before a dispute hardens.

Finally, the vote margins are worth noting for what they do not predict. AB 2439 cleared concurrence 76 to 0 and SB 1238 cleared concurrence 39 to 0. Wide legislative agreement on an HOA reform tells you very little about whether it becomes law, because the objections that killed both bills were about how they were written, not whether the underlying problems are real.

This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Davis-Stirling questions turn on your association's governing documents and the specific facts of your situation. Consult a California attorney licensed in your jurisdiction before acting on anything described here.

Related articles

• California Landlord-Tenant Laws
• Landlord-Tenant Laws by State
• HOA Security Camera Rules
• California Property Records

Last updated: 2026-09-24. Details verified as of 2026-09-24.