Key Changes for HOAs and Condo Owners in San Mateo County:What to Expect in 2025

Several new laws set to take effect on January 1, 2025, will bring significant changes to homeowners’ associations (HOAs) and condominium owners in San Mateo County and across California. These regulations will impact everything from property maintenance to assessments and transparency, shaping how HOAs operate and how homeowners manage their obligations.

Here’s a detailed breakdown of the key updates:

1. Mandatory Inspections for Elevated Elements

One of the most crucial changes is Senate Bill 326, which requires HOAs with three or more units to conduct regular inspections of exterior elevated elements like balconies, stairways, and decks. These inspections must be completed by January 1, 2025, and then repeated every nine years.

The purpose of this law is to identify safety risks, particularly in structures supported by wood or wood-based materials, which are susceptible to decay and structural weakness over time. Recent updates under Assembly Bill 2114 have expanded the list of professionals qualified to conduct these inspections, allowing licensed civil engineers to join structural engineers and architects in this process. This flexibility could make it easier for HOAs to meet the inspection deadlines while ensuring community safety​

Impact on Homeowners: The inspection results could lead to significant maintenance costs if repairs are needed. HOAs might have to impose special assessments on homeowners to cover these expenses, particularly in older buildings where wood decay or structural issues are more common. Homeowners should be proactive in understanding their community's maintenance plans and preparing for potential costs​

2. Limitations on Assessment Increases for Affordable Housing Units

Assembly Bill 572 introduces important changes to how assessments are applied to deed-restricted affordable housing units. Under this new regulation, HOAs can only increase regular assessments on these units by 5% plus the annual cost-of-living adjustment, with a total cap of 10%. This law is designed to help keep affordable housing truly affordable by preventing excessive assessment increases. However, it only applies to new common interest developments formed after January 1, 2025​

Impact on Homeowners: Market-rate unit owners in these new developments might bear more of the cost burden since HOAs will have to offset the reduced assessments for affordable housing units. This could result in higher assessments or special fees for non-affordable units. Current homeowners should check their CC&Rs (Covenants, Conditions, and Restrictions) to see how these changes might affect them​

3. New Transparency and Reporting Requirements

Starting January 1, 2025, smaller HOAs (those with under $5 million in gross receipts and fewer than 20 full-time employees) must comply with new transparency requirements under the Corporate Transparency Act. This law requires HOAs to file detailed personal information about their board members, including names, birth dates, home addresses, and driver’s license or passport numbers, with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

This regulation is part of broader efforts to combat financial crimes, such as money laundering and tax fraud. However, it places an administrative burden on HOAs, especially those run by volunteer boards​

Impact on Homeowners: While this law is intended to increase transparency and accountability, it could result in additional administrative costs for HOAs, which may trickle down to homeowners through increased dues. Homeowners should ensure their boards are aware of these new reporting obligations to avoid penalties, which can be steep for non-compliance​

4. Conversion of Accessory Dwelling Units (ADUs) into Condos

Assembly Bill 1033 introduces the option for homeowners to convert their Accessory Dwelling Units (ADUs) into separate condominiums, allowing them to be sold independently from the main house. This change could have a notable impact on housing availability and affordability, particularly in areas like San Mateo County where housing demand is high.

However, converting an ADU into a condo requires HOA approval and is subject to local ordinances. Homeowners interested in this option should check with both their local government and HOA for specific rules​

Impact on Homeowners: For homeowners with ADUs, this law provides new financial opportunities by allowing them to sell their ADU as a separate property. For HOAs, this may lead to changes in the community structure and increased management complexity, as the number of property owners and residents in the community could grow​

5. Water Conservation and Non-Functional Turf Restrictions

While Assembly Bill 1572 will not take effect until January 1, 2029, it is important to note that this law will prohibit the use of potable water to irrigate non-functional turf in HOA-managed properties. Non-functional turf refers to decorative grass that is not actively used for recreation, such as lawns. This law is part of California’s broader efforts to conserve water amid ongoing drought conditions​

Impact on Homeowners: Although the implementation date is years away, HOAs should begin planning now for long-term water conservation measures. Homeowners might see changes in landscaping policies and maintenance fees as communities shift to more sustainable practices​

The regulatory landscape for HOAs and condominium owners in San Mateo County is changing significantly starting in 2025. Homeowners should stay informed about these new laws and work with their HOA boards to ensure compliance and proactive planning. Understanding these changes now can help avoid unexpected costs, penalties, and disruptions in community management.