August 8, 2025 | Mark Luis Foster

In what appears to be a nod to Minnesota legislators’ efforts earlier this year (or, is it the other way around?), California adopted a law effective July 1 that caps the penalty for HOA rule violations at $100. The supporters of the new law state that the cap enables desired protections for residents who struggle financially or feel disarmed against “overreaching HOAs.”

According to the NBC affiliate in Palm Springs:

“I think it would be good to not hit them with $500 per violation or $1,000,” said one local resident. “People are struggling, and hopefully it will get the message across that if you are violating, you get fined, but the fine isn’t out of control.”

This cap is eerily similar in nature to what legislators in St. Paul were trying to do with HOA reform legislation in Minnesota. The bill ultimately didn’t see the light of day when the session ended in a budget mess that needed resolution. In the Minnesota case, it was argued that a fee cap could be considered a “cost of doing business” for people who, for example, decide to run an Airbnb at an HOA property where such activity isn’t allowed. In that type of case, a $100 penalty fee would be no matter since the cost could be easily recovered by rental income. So “fine me all day long and I don’t care” could become a common refrain.

There is an organization in California that similar to the HOA Leadership Network here in Minnesota, called the Coachella Association Institute. I don’t know much about them but their quote on this is similar to what we were quoted on in the media earlier this year about such legislation:

“Fines are usually a last resort,” said Holly Smith, Director of the Coachella Association’s Institute, a nonprofit that educates HOA boards and homeowners in the Coachella Valley. “Usually it starts with a letter, a conversation. Fines are only issued when there’s a clear, ongoing issue.” Smith warns that the cap could lead to more drawn-out enforcement processes, as HOAs might now be forced to take more homeowners to court to ensure compliance — a costly and time-consuming move.

While capping fines seems like a good move to ensure that homeowners in HOAs are not egregiously fined for things like landscape violations (a common type of violation across the country) or leaving one’s garage door open, etc., it does have wider implications as defined by our Airbnb example above. It remains to be seen if this type of cap on fines roars back in the next Minnesota legislative session. In the meantime, we can learn from our far western HOA neighbors:

“If it’s $100 per violation, and that’s nothing to someone, how long does a problem go on?” one resident questioned. “What other tools does the board have to take action?”

See and read the story from Palm Springs NBC HERE.