California associations restrict rentals under two bodies of law that boards routinely blur together. Civil Code §§4740–4741 decide which rental restrictions are allowed to exist. AB 130 — in force since June 30, 2025 — decides how any violation may be fined and enforced. A rule can fail either test, and when it does, the association usually finds out the expensive way: a rental it has been fining for years turns out to have been protected all along, or a fine that was perfectly justified evaporates because the notice went out a day late.
This checklist runs the most common California rental provisions against both tests. It is written for boards and managers auditing their own documents; it is not legal advice.
Part one: rules that fail on their face (Civil Code §§4740–4741)
1. A rental cap below 25%. Under §4741, an association may not restrict rentals to less than 25% of the separate interests. A CC&R provision capping rentals at 10% or 20% — common in documents written before 2021 — is unenforceable to the extent it goes below the floor. Keep on file: the community's total separate-interest count and a live, verified rental count against it, because "we're at the floor" is a factual claim the board will have to prove.
2. An outright prohibition on renting. Total rental bans are unenforceable under §4741, full stop. A "no leasing" clause doesn't become enforceable because it has been in the declaration since the community was built.
3. A rental restriction applied to an owner who bought before it was recorded. Under §4740, a rental prohibition binds only owners who acquired title after the restriction was recorded. Owners who bought earlier keep the right to rent — and the association that fines them is fining someone the statute protects. Keep on file: the recordation date of every leasing amendment in the association's history, and each owner's acquisition date. The protection is personal to the owner: it ends when title transfers.
4. A short-term rental ban that reaches stays longer than 30 days. Associations may prohibit short-term rentals — but §4741 defines the permitted ban as rentals of 30 days or less. A rule requiring six-month or one-year minimum leases is a rental restriction subject to the 25% floor, not an STR ban, and boards should not treat it as the latter.
5. Counting ADUs and JADUs toward the cap — or charging fees on them. Accessory dwelling units and junior ADUs do not count toward the rental cap under §4741. Separately, AB 130 amended Civil Code §714.3 so that associations may not impose fees on the construction or use of an ADU. A cap calculation that includes ADU tenancies, or a "rental registration fee" applied to an ADU, is exposed on both counts.
The penalty for getting part one wrong: a willful violation of §4741 exposes the association to the owner's actual damages plus a civil penalty of up to $1,000. AB 1584 (2021) went further: governing-document provisions that conflict with §4741 are void, and associations were directed to conform their documents by the end of 2021.* A board still enforcing a pre-2021 cap in 2026 is not enforcing an old rule — it is enforcing a void one.
Part two: rules that fail in the enforcing (AB 130)
A rental restriction can be perfectly valid and still produce an uncollectible fine. Since June 30, 2025, AB 130 governs the process.
6. A rental-violation fine above $100 without a health-and-safety finding. Fines are capped at $100 per violation unless the board adopts a written finding, at an open meeting, that the violation adversely affects health or safety. A "$500 unauthorized rental" line on a fine schedule adopted before AB 130 is now a $100 fine — unless the board has made and documented the finding. Most rental violations won't support one. Keep on file: a fine schedule that conforms to the cap, distributed as the statute requires, and any health-and-safety findings the board has actually adopted.
7. A fine imposed without an opportunity to cure. Owners must be given an opportunity to cure before the disciplinary hearing, and no fine may be imposed if they do. For rental violations that means the notice has to state the cure path — end the tenancy, register the rental, bring the lease term into compliance — and the file has to show what the owner did with it. Evidence of cure, or a documented financial commitment to cure, closes the fine.
8. A hearing decision noticed late. The association must deliver its written decision within 14 days of the hearing. A decision letter that goes out on day 20 is the kind of procedural defect owners' counsel looks for first.
9. Late fees or interest on fines. AB 130 bars both. A fine that has been accruing interest on the ledger since 2025 needs to be corrected, not collected.
What still holds up
Boards that overcorrect give away tools the statute left intact. These remain enforceable in California when properly documented:
- A rental cap at or above 25% — with the count to prove where the community stands.
- A ban on rentals of 30 days or less — express in the governing documents, applied consistently.
- Reasonable registration and lease-term requirements that don't function as a cap below the floor.
- §4740 grandfathering that ends at transfer — the next buyer is bound by the recorded restriction.
- Fines up to $100 per violation — issued through the cure-and-hearing process — and the §5910 internal dispute resolution procedure every association must offer, which the association is obligated to join when a member requests it.*
Watch this space
AB 2579 would expand the health-and-safety exception to the $100 cap. It sits on the Assembly Inactive File as of late August 2026 — not enacted, and not advancing this session, but eligible to be taken up again. Boards should not revise fine schedules in anticipation of it. Note also that claims circulating online about a "$200 continuing-violation tier" or a January 2026 effective date for AB 130 are incorrect: the statute took effect June 30, 2025 with a flat $100 cap.
The audit
Every item above reduces to a question of records:
- Pull every leasing provision in the declaration, bylaws, and rules, with its recordation or adoption date.
- Score each against part one. Below 25%? Total ban? STR language that reaches past 30 days? ADUs in the count? Flag it.
- Build the owner-vintage table. Acquisition date per owner against the recordation date of each leasing amendment — this is the §4740 defense, and it can't be reconstructed from memory.
- Reconcile the fine schedule to AB 130. Cap, cure step, 14-day notice, no interest.
- Verify the rental picture. Every count, cap, and floor argument depends on knowing which homes are actually rented — and the ones that matter are the ones nobody registered.
For the statutory detail behind each item — the §4741 text, §4740 grandfathering, and AB 130's amendments to §§5850, 5855, and 714.3 — see our California HOA rental compliance guide.
The bottom line
California didn't take rental enforcement away from associations; it drew a floor under restrictions and a ceiling over fines, then wrapped the space between them in process. Boards that know exactly which owners are bound by which rule, and can show the cure-and-hearing file for every fine, still have a working rental program. Boards enforcing a 2015 fine schedule against a 2019 cap have a liability.
Getting the rental picture current, verified, and documented is where that audit starts. That's what we do.
* Our reading of the statute, not a settled rule — validate with your association's HOA attorney before relying on it.
This article is general information for community associations, not legal advice. Governing-document amendments and fine schedules should be reviewed with your association's attorney.