California prohibited charging interest on condo and HOA fines. New York has no cap and no interest ban.

On June 30, 2025, California Governor Gavin Newsom signed Assembly Bill 130 into law. The bill did three things: it capped HOA and condominium board fines at $100 per violation, it prohibited charging interest or late fees on those fines, and it required boards to offer internal dispute resolution before pursuing collections. New York's Condominium Act (Real Property Law Article 9-B) and the Business Corporation Law governing co-ops contain none of these provisions. A New York board may fine a unit owner any amount it sets by rule, compound that fine with interest, and pursue collection through litigation with no mandatory cooling-off period.

What AB 130 actually does.

California's Davis-Stirling Common Interest Development Act already governed HOA and condo fines before AB 130. Civil Code §5850 required boards to adopt a schedule of monetary penalties and provide notice before assessing them. AB 130 amended §5850 to add two new subsections. Subsection (c) caps any fine at $100 per violation, regardless of what the board's adopted schedule says. Subsection (e) prohibits charging interest, late charges, or collection costs on fines that do not arise from delinquent assessments. The $100 ceiling applies to violations of governing documents, not to missed common-charge payments; delinquent maintenance assessments remain subject to the existing collection framework.

The interest prohibition is the more consequential of the two provisions. Before AB 130, a California board could adopt a fine schedule within whatever limits it chose and then add interest under the general Davis-Stirling framework for delinquent accounts. The gap between a $100 fine and a $1,200 fine-plus-interest balance after one year of compounding is the mechanism by which boards extracted settlement leverage from owners who disputed an underlying citation. AB 130 removes that leverage entirely for fine balances.

The mandatory IDR requirement.

California Civil Code §5900 already required HOAs and condo associations to adopt internal dispute resolution procedures. AB 130 ties this to the fine cycle: before a board may refer an unpaid fine to a collection agent or file suit to recover it, the board must offer IDR and the owner must have had a reasonable opportunity to use it. If a board skips IDR and proceeds directly to collection, any judgment for fine recovery is voidable on that procedural ground alone. The IDR offer must be in writing and must identify a specific neutral process, not merely refer to the governing documents.

The sequencing matters. California Civil Code §5975 already gave courts authority to award attorney fees to prevailing parties in actions to enforce governing documents. AB 130's IDR requirement extends that fee-shifting risk to boards that pursue fine collection without first offering the dispute resolution step. The practical effect is that a board skipping IDR exposes itself to paying the owner's attorney fees if it loses, not merely absorbing its own litigation costs.

What New York's law says instead.

New York Real Property Law Article 9-B (the Condominium Act) does not set a ceiling on board-imposed fines. RPL §339-j authorizes the board of managers to adopt rules and regulations and to enforce them, but it does not cap the fine amounts those rules may prescribe. RPL §339-w gives owners a right to bring a court action to enforce the declaration and bylaws, but it does not create a pre-litigation IDR step, nor does it restrict interest on unpaid fines. For co-ops, the Business Corporation Law similarly provides no cap on board-imposed charges. The governing instrument is the proprietary lease and house rules, which are private contracts between the board and the unit owners. Those contracts contain whatever fine schedule the original sponsor inserted, subject only to the business judgment rule articulated in Levandusky v. One Fifth Avenue Apartment Corp., 75 N.Y.2d 530 (1990).

Under Levandusky, a board's enforcement decisions are insulated from judicial review unless the challenger shows the board acted outside its authority, in bad faith, or in a discriminatory manner. A fine that is facially authorized by the house rules and applied consistently passes that test regardless of amount. A $500-per-day fine for an unreturned key fob is board-authorized if the house rules say $500 per day; a New York court reviewing it under the business judgment rule does not ask whether $500 is proportionate.

A comparison of the two frameworks.

New York's reform record on fines.

The New York Legislature has not passed a bill capping condo or co-op board fines in the current or any recent session. As documented in this site's review of ten reform bills across thirty combined sessions, bills that reached committee on governance, disclosure, and owner rights did not advance to a floor vote. A fine cap would require amending RPL Article 9-B for condominiums and a parallel amendment to the BCL or a standalone co-op governance statute for co-ops. Neither bill has been introduced in the current session as of August 2026. Minnesota enacted a $100 fine cap effective May 13, 2026 (Minnesota Chapter 82, amending Minnesota Statutes §515B.3-102). Florida's 2022 reforms after the Surfside collapse addressed reserve funding and structural inspections, not fine caps. To our knowledge, California is the first state to combine an explicit dollar ceiling on association fines with an interest prohibition.

The absence of a New York fine-cap bill is not an oversight. Managing agent contracts are typically structured with a per-violation enforcement fee paid to the agent for each notice generated; a fine cap reduces the citation volume that management companies can run through at a profit. The industry's position, articulated in testimony before the Senate Cities Committee, is that boards require discretion on enforcement to maintain building standards. That argument does not address interest and late fees, which do not maintain any building standard and function solely as a collection multiplier.

Bottom line.

California AB 130 closed a gap that New York still has open. A New York condo board or co-op board may today assess fines at whatever amount its governing documents authorize, compound those fines with interest, add late charges, and proceed to collection without offering any form of dispute resolution. California has prohibited all of that for every common interest development in the state. The legislative mechanics are not complex: a one-sentence fine ceiling (as California and Minnesota have now both enacted) and a one-sentence interest prohibition would materially change the enforcement economics for New York unit owners. New York has not enacted either. Use the letter-to-representative tool on this site to reach your State Senator and Assembly Member on condo governance reform.

Primary sources: California AB 130 (2025); California Civil Code §5850; California Civil Code §5900; California Civil Code §5975; New York Real Property Law Article 9-B; New York Business Corporation Law; Levandusky v. One Fifth Avenue Apartment Corp., 75 N.Y.2d 530 (1990).

Companion resources: Minnesota's CIC fine cap and NY gap — Florida HB 913 vs. NY transparency — Ten reform bills that did not advance — Letter to your representative — NY governance gap index