In 2020, the California legislature signed a bill into law that is considered by many to be harmful to homeowner associations. The new law that became law effective on January 1, 2021 includes the following:

1. Provisions in governing documents requiring lease terms longer than 30 days are now unenforcable. Notwithstanding, landlords may lease their individual units for any period they determine beneficial to them. The new law makes it much easier for individual unit owners to utilize companies like Airbnb or to rent their units by the day or week to transient tenants, thus increasing common area maintenance and repair costs as well as increasing security concerns.
2. Rental caps limiting the percentage of renters within an association, can no longer be less than 25%. This means that every association is now at risk of having up to 25% of the units in their community become tenant occupied.
3. Provisions that prohibit new buyers from renting their properties for a defined period of time are no longer permitted.

The new law is likely to depress the value of condominiums and make it more difficult to obtain the most favorable lending rates and terms. Existing governing documents that violate the new law must be amended.