Senate Bill 326 (“SB 326”) was recently enacted by the California Legislature and will take effect January 1, 2020. The bill accomplishes 3 main objectives: 1) it requires associations to conduct mandatory inspections for exterior elevated elements, such as decks, balconies, and walkways; 2) it invalidates and prohibits provisions in an association’s governing documents that restrict the board’s authority to initiate a legal proceeding against a developer for substandard construction; and 3) it requires an association to discuss with the membership the potential impacts of a construction defect action against the developer prior to the initiation of such an action.
Exterior Elevation Inspections
SB 326 introduces Civil Code Section 5551, which sets forth brand new requirements for associations with three or more multifamily dwelling units. For these associations, all exterior elevated elements that are supported in substantial part by wood or wood-based products, such as decks, balconies, stairways, and walkways, must be visually inspected every nine (9) years by a licensed structural engineer or architect (“Inspector”). The inspections are intended to determine whether the exterior elevated elements are in a generally safe condition and performing in accordance with applicable standards. These new requirements follow in the wake of a catastrophic balcony failure that resulted in a number of tragic deaths.
While the concept of visual inspections may sound fairly straightforward, the mechanics of the required inspections under Civil Code Section 5551 track unique and complex extrapolation protocols commonly employed in construction defect litigation. As a preliminary matter, not all elevated elements are required to be inspected. Rather, a statistician must be enlisted to prepare a randomized list of all the elevated elements qualifying for inspection (i.e. the total universe of 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 elevated more than six feet above ground level, and that are supported in whole or in substantial part by wood or wood-based products). The randomized list must be prepared in such a way that the results of the inspections are representative of the project as a whole, within a margin of error of five (5) percent. This protocol allows for limited visual inspections (which will be a significant savings for the association), but provides confidence that those inspections are representative of the global onsite conditions.