By January 1, 2025, the California legislature is requiring all associations to conduct inspections of exterior elevated elements to determine their safety. This applies to all condominium projects with more than three units in a building. In summary, the bill requires that board members of these associations do the following:
- Hire a qualified structural engineer or architect to perform an inspection on your building
- Present the inspectors report to the HOA board members
- Plan and prepare a budget for any future repairs upon this inspection
Let’s take a look at why this bill was passed and some of the details.
On August 30th, 2019 the governor of California approved senate bill no. 326 also known as the “Balcony Bill” requiring inspection of outdoor condominium balconies and other elevated structures to ensure the safety and durability of their condition. The bill aims to protect residents and property owners from disasters in old and young buildings. In January 2020, the bill went into effect after a history of collapsed structures resulting in injury and death. The bill presents an instruction to request inspection, test, and outline a report for HOA approval. While there are gray areas to what gets inspected and how deep to go, the aim is to do a more thorough investigation in contrast to just a general visual inspection. This involves cutting materials open and looking for signs of degradation through what’s called “destructive testing”. It’s not an easy job and requires the expertise of either a structural engineer or an architect to get the job done.
It’s not possible (nor practical) to inspect everything out there, so the bill defines several parameters that consider whether or not these structures fall under the scope of needing inspection. It’s not just balconies that are under the microscope: decks, elevated walkways, railings, and stairways also need the same attention. The elements can be rough and while California’s seasonal changes are relatively mild, outdoor wooden elevated structures are prone to degradation. Given time and the right conditions, mother nature can turn wood into mush and needs to be checked with an acute eye to make sure things are holding up. Excluded from the above-mentioned structures are faux balconies, reinforced concrete, steel rooftops, and terrace decks as these do not pose the same human hazards.
Coordination between structural engineers and HOAs is needed to make repairs to any structure. Before repairs can be made, the Balcony Bill outlines a 2 step process of inspection and review for approval. The initial site visit (Step 1) is where the engineer walks through the site and lists out areas that are exposed. After this, the HOA needs to approve the inspection in order for step 2 to begin. Once step 2 begins, the exposed areas are further inspected through destructive testing, and suggestions as to whether or not these items need to be replaced are noted. After this, the HOA does a review and if an agreement is made to repair, it officially becomes a “project”. After this, the HOAs would need to find a contractor to carry out the recommended repairs.
Section 1 (5b) (1) of the Balcony Bill 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 by a licensed structural engineer or architect of a random and statistically significant sample of exterior elevated elements for which the association has maintenance or repair responsibility.”
The key phrase here is “statistically significant sample” meaning that a sufficient number of units will be inspected and the results will be used to reflect the whole building using a 95% confidence benchmark outlined in Section 1 (4).
Thought experiment:
You’re in a building with 100 rooms looking for water damage underneath the carpet. The client asks, “Is there any water damage that needs to be fixed?” If you want to be absolutely certain and don’t mind spending the money, you can tear out all 100 rooms’ worth of carpet. This would be disruptive, take a long time, and cost a lot of money.
If you’re ok being less than absolutely sure, you can pull up a sample of them, say half or even 1/10th and check for damage. With a “95% confidence” measure, this means you’re sure of something with only a 1 in 20 chance of being wrong. The engineer or architect has to make the call of how much to check to hit that level of confidence. It typically does not mean they look for damage, and if some is found, they look for more. They’re checking enough that there’s only a 1 in 20 chance that they’re wrong. If there is a trend of little to no damage, fewer inspections will be done.
Money for repairs is generally collected in the form of reserves, special assessments, and loans. If by chance the HOA is less than 10 years old and structural damage is found, it could be a construction defect for which the builder may be found liable. HOAs are facing challenges due to the 2025 time crunch as to whether or not the funds can be assessed on such short notice. It won’t always be like this though– inspections will be 9 years apart from here on out, which should be easier to plan for.
It’s no fun having to pay for unexpected costs, which is why here at Dials we have designed solutions to ease the burden. With automatic payments, maintenance tracking, custom assessment creation, and a place to store all your documents, you’ll want to start thinking about upgrading your bookkeeping infrastructure. We realize that being on your HOA’s board might be your second or even third job and we want it to be your easiest one. It’s a good feeling when you have money in the bank to pay for something as soon as it happens, and we’re dedicated to making sure you experience this exact feeling. Our platform will ensure that your HOAs reserve fund stays in tip-top shape prepared for nasty urgent repairs and/or unexpected legislation that might come up in the future. With years of HOA experience, our word to you is that you prepare for things like the Balcony Bill with surety and confidence the smart way; the Dials way. Our work doesn’t stop here either– we’ve got even more planned to ensure that everyone is kept up to date on current events around your association using cutting-edge technology. Ditch the reactionary approach to paying your fees and adopt a more proactive way of budgeting with Dials HOA software so that you can spend more time enjoying your home and less time managing it.
– The Dials team