CaliforniaCalifornia law will require condo and HOA associations to fund reserves starting in 2032
California Chapter 796 will require homeowners associations to fund reserves at a minimum level starting January 1, 2032, including a 15 percent budget transfer or a special assessment if reserves are projected to run out.
What it does
Starting January 1, 2032, reserve studies must state the minimum yearly contribution needed to keep reserves above zero for 30 years.
Associations must put at least the study's minimum contribution into reserves every year, starting in 2032.
If reserves are projected to run out within 30 years, the association must move at least 15 percent of its yearly budget into reserves until that is no longer projected.
If the budget cannot meet the minimum, the association must charge owners a special assessment, with a membership vote needed above the usual cap, at most once every nine years.
Argument forSetting minimum reserve contributions could help associations save for roofs, paving, and other big repairs, which may reduce sudden, steep special assessments later.
Argument againstRequiring 15 percent of the budget or a special assessment could raise costs for owners, including those in associations that now spend most of their budgets on routine operations.
More detail
Reserve studies must include the minimum reserve contribution level needed to keep the projected reserve balance from falling below zero over the next 30 years. The study must also tell the association about the new requirements that begin January 1, 2032. This applies to the reserve study done at least once every three years for associations whose major components are valued at one-half or more of the gross budget. This begins January 1, 2032.
An association must fund its reserve account each year at no less than the minimum reserve contribution level in its most recent reserve study. This applies to associations in common interest developments. This begins January 1, 2032.
If an association's reserves are projected to fall below zero at any time over the next 30 years, it must transfer at least 15 percent of its gross annual budget to its reserve account each year. The yearly transfers continue until the reserve account is no longer projected to fall below zero. This begins January 1, 2032.
If an association cannot reach the minimum reserve contribution level through its budget, it must levy a reserve funding special assessment on owners. The assessment follows the same rules as a standard special assessment under Civil Code section 5605. If it is limited by the cap on special assessments without a vote, the membership must vote on an amount above the cap. The money must go into the reserve account and count as reserve funds. An association cannot levy a reserve funding special assessment more than once every nine years. This begins January 1, 2032.
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Where it stands
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 29Chaptered by Secretary of State - Chapter 796, Statutes of 2026.Latest
- Sep 29Approved by the Governor Gavin Newsom.Became Law
- Sep 3Enrolled and presented to the Governor at 4 p.m.To Governor
- Aug 26Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 65. Noes 4. Page 6639.).Major
- Vote recorded AB 2050 Caloza Concurrence in Senate Amendments. Result: pass.Lower
- Vote recorded 3rd Reading AB2050 Caloza et al. By Laird. Result: pass.Upper
- Aug 26In Assembly. Concurrence in Senate amendments pending.
- Aug 26Read third time. Passed. Ordered to the Assembly. (Ayes 30. Noes 3.).Passed Senate
- Aug 24Read second time. Ordered to third reading.Minor
- Aug 21Read third time and amended. Ordered to second reading.Major
- Aug 5Read second time. Ordered to third reading.Minor
- Aug 4From committee: Do pass. (Ayes 4. Noes 1.) (August 3).Minor
- Aug 3
- Vote recorded Do pass. Result: pass.Upper
- Jul 1From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 0.) (June 30). Re-referred to Com. on APPR.Minor
- Jun 30
- Vote recorded Do pass, but first be re-referred to the Committee on [Appropriations]. Result: pass.Upper
- Jun 18Read second time and amended. Re-referred to Com. on JUD.Major
- Jun 17From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 7. Noes 1.) (June 16).Major
- Jun 16
- Vote recorded Do pass as amended, but first amend, and re-refer to the Committee on [Judiciary]. Result: pass.Upper
- May 20Referred to Coms. on HOUSING, JUD. and APPR.Minor
- May 12In Senate. Read first time. To Com. on RLS. for assignment.Minor
- May 11Read third time. Passed. Ordered to the Senate. (Ayes 59. Noes 7. Page 4989.)Passed Assembly
- Vote recorded AB 2050 Caloza Assembly Third Reading. Result: pass.Lower
- Apr 29Read second time. Ordered to third reading.Minor
- Apr 28From committee: Do pass. (Ayes 10. Noes 1.) (April 28).Minor
- Vote recorded Do pass. Result: pass.Lower
- Apr 28Coauthors revised.
- Apr 20Re-referred to Com. on JUD.Minor
- Apr 16Read second time and amended.Major
- Apr 15From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 11. Noes 0.) (April 15).Major
- Vote recorded Do pass as amended and be re-referred to the Committee on [Judiciary]. Result: pass.Lower
- Mar 9Referred to Coms. on H. & C.D. and JUD.Minor
- Feb 19From printer. May be heard in committee March 21.
- Feb 18Read first time. To print.Introduced
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