More About California’s Balcony Inspection Law, Senate Bill 721

Written by Landlord Property Management Magazine on . Posted in Blog

By Shari Fykes, Partner Engineering & Science

(Editor’s Note: California Senate Bill 721 generally requires balconies, walkways, staircases, and other “exterior elevated elements” built primarily of wood or wood-based products on residential buildings of three or more units, and that are three or more feet above ground level and extend outside of the four walls of a building to be inspected.)

California’s Balcony Inspection Law, Senate Bill 721, was enacted in 2019. Many multifamily rental property owners were too impacted by the pandemic to address the law’s requirements in 2020 or 2021. Recently, however, there has been a surge of interest by portfolio owners and property managers inquiring about and implementing mandatory balcony inspections and inspection of other elevated exterior elements.

Here are some updates and best practices that all owners and managers of California multifamily rental properties can benefit from.

  1. Understand How the Deadlines Work

The first deadline for balcony inspections and inspections of other exterior elevated elements at your property is January 1, 2025. A second inspection is required within six years later. People who have completed inspections prior to January 1, 2025, due date do not need to complete another inspection until January 1, 2031.

  • Treat the Inspections and Repair Work as Two Separate Tasks

Senate Bill 721 originally prohibited contractors who conduct the required inspections from providing repair work. Senate Bill 607, signed into law in September 2021, eliminates the prohibition against the contractor performing both inspections and repair work. However, property owners should still be cautious when hiring a single entity to perform both the inspection and repair work because there could be a conflict of interest.

When an inspector is hired only for inspection work, they receive no benefit from the scope of repair, so their findings may be more unbiased than a contractor who performs the inspection, and their inspection report more likely to prescribe only the extent of repair required. It is prudent for building owners and managers to hire two different entities to oversee the inspections and repair work.

  • Lenders are Taking an Interest in These Inspections

In addition to keeping inspection reports on record for two cycles (12 years), the law requires a seller to share past inspection report(s) with the buyer at the time of any subsequent sale of the multifamily building. The lending landscape has changed, and as a result, transaction volume has slowed down. As interest rates rise and funding tightens up, lenders are adding layers of criteria to filter and select eligible borrowers and may factor the financial obligations of balcony and other elevated exterior element inspection and repair into their underwriting. Some lenders are asking for the cost of the assessment to put into the immediate repair table. Others want to see it flagged in the body of an inspection report.

  • Start Early to Leverage Competitive Pricing

The delayed supply chain and shortage of talent in the industry have taught us that getting in line early is the best way to meet deadlines these days. Balcony and elevated exterior element inspections and repairs are no exception. Regarding inspection compliance, the law puts the responsibility on the property owner. The process begins from the moment an owner contracts with a qualified inspector. The inspector then follows the inspection guidelines to survey properties and to prescribe the outcomes based on health and safety considerations.

An inspection report will provide four outcome scenarios that lead to different required follow-up actions. The building will either pass inspections or will require repairs. Once the building passes inspection, the owner receives a final report. All reports should be on file for two inspection cycles. This entire process from the beginning to the end completes the compliance process. Since the inspection dates are fixed, owners and managers can budget and shop around early to enjoy competitive pricing.

Balconies and other exterior elevated elements can fail regardless of the age of the building. Proactive management can save money and life. It’s good to start early rather than wait and have to pay more for your inspection. For information on Senate Bill 721’s inspection law, please refer to our article, “What You Should Know About California’s New Balcony Inspection Law” at www.PartnerESI.com

The author, Shari Fykes, is the Market Brand Manager for Partner Engineering & Science, Inc.  She has more than 9 years of experience in the environmental service industry, with a specialization in client needs and compliance requirements of seismic solutions, balcony inspections, retrofit pricing options, State and Federal laws, regulations, and administrative policies affecting landlords, property management firms and building owners. Partner Engineering and Science, Inc. offers full-service engineering, environmental and energy consulting and design services throughout the Americas, Europe, and around the globe. For more information, contact Partner Engineering and Science at (800) 419-4923 or info@partneresi.com, or go to www.partneresi.com.

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