SB 326 THE BALCONY BILL
THE LAW REQUIRING HOA’s TO PERFORM INSPECTIONS OF BALCONIES
IT’S A NEW LAW AND ITS IMPORTANT
The following information is provided by the Adams/Stirling law corporation
On August 30, 2019, Governor Newsom signed Senate Bill No. 326 (S.B. 326)
into law, adding two new statutes to the Davis-Stirling Act. Civil Code
section 5551 adds a requirement for associations to perform inspections
of balconies and other exterior structural elements that the association
has an obligation to maintain. Civil Code section 5986 invalidates and
voids developer friendly provisions in governing documents that require
homeowner votes prior to filing of a construction defect lawsuit. Below
is an overview of the important points you need to be aware of regarding
these new laws, which went into effect on January 1, 2020.
Inspections Required. Beginning January 1, 2020, associations with buildings that have three
or more units must inspect elevated load-bearing structures which are
supported substantially by wood. (Civ. Code §5551(l).) The inspector
must submit a report to the board providing the physical condition and
remaining useful life of the structures and their associated waterproofing
systems. The statute does not change who is responsible to maintain, repair
or replace balconies or other elevated structures. It imposes inspection
and repair obligations on HOA’s as to balconies and/or elevated
structures which associations are already obligated to maintain, repair
or replace.
Dry Rot Defined. The term "dry rot" is a misnomer. Wood does not rot when it's
dry. For decay to occur, moisture must be present before fungi can feed
on the wood. Like viruses and bacteria, fungal spores are microscopic
and travel through the air. The spores act as seeds which grow when they
land on moist wood products. When they plant themselves into wood, they
feed on the wood's cellulose. Cellulose is what gives wood its strength.
As the fungi consume cellulose, the wood weakens. Without moisture, fungi
can't grow. Thus, the importance of keeping all waterproofing systems
well-maintained. That is why the Davis-Stirling Act requires a thorough
inspection of waterproofing components such as flashings, membranes, coatings,
and sealants. (Civ. Code 5551(a)(1).)
Repairs.
Fungi (like termites) spread throughout a structure as they feed on wood.
As a result, dry rot can be difficult to treat. To stop the destruction,
all decayed wood and fungi must be removed. The longer it goes untreated,
the weaker the wood becomes until it collapses without warning. See: Balcony
Maintenance & Repairs
Cantilevered balconies that require invasive testing. Balconies supported
by posts that require invasive testing under the Davis-Stirling Act.
Elevated Structures Defined. Required inspections apply to load-bearing components and associated
waterproofing systems. Load bearing means those components that extend
beyond the exterior walls of the building to deliver structural loads
to the building from decks, balconies, stairways, walkways, and their
railings, that have a walking surface more than six feet above ground
level, that are designed for human occupancy or use, and that are supported
in whole or in substantial part by wood or wood-based products. (Civ.
Code §5551(a)(3).)
#1. Cantilevered balconies constructed of wood must be inspected.
#2. Balconies supported by wood posts require inspection.#1. Cantilevered
balconies constructed of wood must be inspected.
#3. Balconies supported by the main structure do not require inspection
since they cannot collapse.
#4. Balconies partly supported by the structure and partly cantilevered
require inspection.
#5. Exterior stairs and landings attached to wood require inspection.
#6. Elevated walkways supported by wood structures must be inspected.
#7. Balconies made entirely of concrete and steel do not require inspection.
NOTE: Elevated structures that do not require inspection under Civil Code
§5551 still require a diligent visual inspection for purposes of
an associations 3-year cycle of inspections for their reserve study. This
includes concrete balconies.
Townhouse Balconies. A townhouse is a form of construction, not a form of ownership. A townhouse
can be defined as a condominium or a separate interest in a planned development.
If the townhouse is a condominium, responsibility for balconies will depend
on how a condominium unit is defined. If the unit's boundaries are
the unfinished surfaces of the interior walls, ceilings and floors, the
townhouse structure is owned in common by the membership. That makes the
association responsible for repair and replacement of the structure unless
the CC&R’s clearly state otherwise. (Civ. Code §4775.)
If a unit's boundaries are defined as extending to the exterior surfaces
of the townhouse, the structure becomes part of the unit and is the responsibility
of the homeowner, unless the governing documents state otherwise.
If townhouses are defined as a planned development, homeowners own the
structure and the lot upon which it was built. That means homeowners are
responsible for their own balconies. The balcony bill does not apply to
planned developments, only to condominiums.
Deadline for Inspections. Associations must complete their first inspection before January 1, 2025.
Thereafter, elevated structures must be inspected at least once every
nine years. (Civ. Code §5551(b)(1).)
Architect/Engineer and Reserve Analyst. The inspections must be conducted by a licensed structural engineer or
architect. (Civ. Code §5551(b)(1).) The inspector must inspect sufficient
number of units inspected to provide 95 percent confidence that the results
from the sample are reflective of the whole, with a margin of error of
no greater than plus or minus 5 percent. (Civ. Code §5551(a)(4).)
The association's reserve study professional should be notified when
the inspection occurs since the result could impact the cost allocations
for particular line items in the study. Following is a list of inspection
companies readers sent to us. Boards should have legal counsel review
any proposed contracts.
Borescopes. Inspectors are allowed to use the least intrusive method necessary to
examine load-bearing components, including visual observation in conjunction
with moisture meters, borescopes, and infrared technology. (Civ. Code
§5551(a)(5).) The advantage of a borescope is that only small holes
are drilled into the stucco, which are easily patched. However, it is
sometimes difficult for the scope to see signs of water infiltration and
deterioration of the framing. Often, the better approach is to open the
underside of balconies so an inspector can easily see the structural elements.
Some inspectors use both inspection methods, depending on the particular
project and the condition of the structures.
Inspection Costs. To achieve the 95% confidence level required by the bill will be expensive.
It is estimated that most associations should expect costs in the range
of $5,000 to $20,000. The total cost will depend on the number of elevated
structures inspected to achieve the high confidence level required by the bill.
Using Reserves. Because inspections are directly related to reserves needed to repair
elevated structures and because the definition of "replacement cost"
includes related expenses, inspection costs can be included in an association's
reserve budget. Using reserves for such purposes would not be deemed a
borrowing.
Inspector's Report. The inspector must submit a report to the board of directors specifying
the current physical condition and remaining useful life of the load-bearing
components and associated waterproofing systems. The report must be submitted
to the board immediately upon completion of the report, and to the local
code enforcement agency within 15 days of completion of the report. (Civ.
Code §5551(e).) The inspector's reports must be kept by the association
for at least two inspection cycles. (Civ. Code §5551(i).)
Safety Measures. If the inspector advises that the exterior elevated element poses an immediate
threat to the safety of the occupants, the association must take preventive
measures immediately upon receiving the report, including preventing occupant
access to the exterior elevated element until repairs have been inspected
and approved by the local enforcement agency. (Civ. Code §5551(g).)
Contracting for Inspections and Repairs. Contracts prepared by vendors can sometimes be skewed to protect the vendor.
This is normal but not particularly beneficial to the association. Before
signing any contracts, boards should make sure legal counsel reviews them.
Inspection Companies. Below is a list of companies that perform inspections of elevated structures.
The information was sent to us by readers of our newsletter and should
not be construed as an endorsement of the performance of any of the companies
listed below. Before hiring a company, boards must perform their due diligence
and make sure the company is licensed and insured. In addition, boards
should have legal counsel review all contracts before signing them.
A7 Group, Inc. 700 2nd St, Unit H Encinitas, CA 92024 (760) 945-3700
Adam Rohrbaugh info@a7arch.com www.a7architect.com
A.D. Magellan 701 Palomar Airport Rd, #300 Carlsbad, CA 92011 (877) 899-5990
Becky Larson beckyl@admagellan.com www.admagellan.com
AWS Consultants 2030 E 4th St, #208D Santa Ana, CA 92705 (714) 835-2301
Carl Brown cbrown@awsconsultants.com www.awsconsultants.com
Axis Consultants 2544 Barrington Ct Hayward, CA 94545 (833) 799-0333
MaryAnne Siena msiena@axisconsults.com www.axisconsults.com
B2R Consulting Group 1740 W. Katella Ave, Suite L Orange, CA 92867 714-744-6100
Any Bradvic info@b2rconsultinggroup.com www.b2rconsultinggroup.com
Bergeman Group Const. Mgmt 11099 La Cienega Blvd, #175 Los Angeles, CA 90045
Robert Grosse (213) 432-5110 rgrosse@bergemangroup.com www.bergemangroup.com
CL Sigler & Assoc., Inc. 521 Charcot Ave, #203 San Jose, CA 95131 74820
Borrego Dr. Palm Desert 92260 480-922-0262
chris@siglercm.com www.siglercm.com
Design Build Associates 5655 Lindero Canyon Rd, #321 Westlake Village,
CA 91362 (818) 889-0402
Dennis Brooks DennisBrooks@dbuild.com www.dbuild.com
Focused Inspection Group 1999 S. Bascom Ave, #700, Campbell 95008 333 City
Blvd West, #1700 Orange, CA 92868
Alex Riley alex@focusedinspections.com www.focusedinspections.com
Pacific InterWest 1600 South Main St, #380 Walnut Creek, CA 94596
Stacy Daiker (925) 939-5500 sdaiker@pacificinterwest.com www.pacificinterwest.com
Rupert Construction Services 9114 Adams Ave, #340 Huntington Beach, CA
92646 (714) 904-2885
Devin Dial Devin@RupertServices.com www.rupertservices.com
Southern Cross Consultants 4045 Hancock St, #240 San Diego, CA 92110 (858) 395-8657
Matthew Boomhower, AIA Matthew@SouthernCrossPC.com www.SouthernCrossPC.com
Sullivan Construction Mgmt P.O. Box 2387 Alpine, CA 91903-2387 (619) 722-7580
Pat Sullivan pat@patsullivancm.com www.sullivancm.com
Van Sande Consultants 2920 De la Vina Street Santa Barbara 93105 805-963-6901
Carolle Van Sande, CSM carolle@bristolsb.com www.vansandestructural.com
Acknowledgement. Thank you to Dennis Brooks of Design Build Associates
for photos of balconies and to Bill Leys of DeckExpert.com for his photo
of dry rot in a balcony beam.
Stock Co-ops & Community Apartments. Stock cooperatives and community apartment are both forms of common interest
developments governed by the Davis-Stirling Act. Civil Code §5551(l)
states that inspections of elevated wooden structures apply to multi-family
structures with three or more units. This would seem to apply to stock
co-ops and community apartment projects.
However, the statute also states, "At least once every nine years,
the board of an association of a condominium project shall cause a reasonably
competent and diligent visual inspection to be conducted..." (Civ.
Code §5551(b)(1).)
That language appears to let these two forms of common interest developments
off the hook even though they own and are responsible for maintaining
and repairing balconies and other elevated wooden structures. The statute's
clear intent is to increase the safety of residents in associations with
elevated wooden structures. Accordingly, stock co-ops and community apartment
projects would voluntarily follow the statute's requirements to inspect
and repair all elevated wooden structures. Doing so protects residents
and minimizes any potential for lawsuits.
Recommendation. Because of the anomaly in the statute, stock cooperatives and community
apartment projects with multi-family structures with three or more units
should get a written legal opinion from legal counsel on how best to proceed.
Clearly, the safer course of action is to inspect and repair elevated
structures. Doing protects residents and minimizes any potential for litigation
and judgments against the association.