Everyone knows that on June 16, 2015, a balcony on an 8-year old apartment building in Berkeley California collapsed killing six students and injuring seven more. The balcony supporting beams were rotted. A soffit hid them from visual inspections. On July 14, 2015, the City of Berkeley passed an ordinance requiring inspection of all exterior balconies, decks, landings, and stairways of all multi-family buildings in the city.1 The ordinance did not exclude condominiums or any other common interest development. Other California cities are considering similar ordinances which could create a patchwork of laws with possibly differing requirementsa nightmare for community association managers and others who support community associations. If this is the direction that cities and counties are going, then a uniform law that would apply statewide is necessary.
In February 2017, Senator Jerry Hill introduced SB 721 with language that mirrors much of the Berkeley ordinance and would impose similar inspection requirements statewide. The bill would save lives, a concept everyone can support, but compliance with the original versions of SB 721 would be very difficult and expensive for homeowner associations.
I and others at Berding & Weil have for over 30 years worked with many associations in Northern and Southern California protecting them from the consequences of hidden decay, mold and rot. We were very interested in assuring that SB 721 was written in a way that would not impose unreasonable costs or burdens on our clients or the managers whose guidance is essential to prudent association operations.
When we saw the original versions of SB 721, we offered suggestions that would mold the legislation to fit the reality of community associations and be less burdensome on boards and managers.
To help managers, directors and industry leaders understand the evolution of the legislation and the suggestions we proposed to improve SB 721, please read below.
The original version of the bill required that all elevated balconies, stairways, landings, railings or walking surfaces over 6 feet above grade, in all multi-family buildings of 3 units or more, be inspected by a professional hired by the building owner, association, or the property manager, by 2021 and every five years after that.
We suggested allowing a smaller representative sample, just 15%, to be inspected instead of every balcony, deck, stairway and walking surface; and allow inspections every six years to coincide with the reserve study cycle to permit coordination between the engineers and the reserve analysts and eliminate duplication. We also suggested clarifications to the inspection requirements so an association's responsibility would be clear and understandable.
Senator Hill accepted our amendments, and those requested by many other organizations, and they appear in the current version of the bill.
For many years we have written about hidden damage, underfunded reserves, and poor workmanship leading to dangerous conditions and the financial hardship those conditions visit on owners. We have seen many projects with latent damage that required a major financial investment often beyond the means of the owners. And we have seen injuries and death which resulted from a failure to identify those conditions in time to avoid an accident. With the tragedy in Berkeley and another death in Folsom so fresh in our minds, encouraging safety inspections to coordinate with regular reserve studies is sensible and reasonable.
If you investigate and detect a problem, you can repair itprobably in time to avoid extensive further damage. If you don't investigate and discover the problem after substantial damage has occurred, the repairs will inevitably cost more, or worse, could lead to an accident. Insurance carriers are learning that aging buildings pose risks and will want to know that associations have performed all necessary maintenance and repairs to lessen those risks. It's better to discover and fix the problem early to stop the damage.
Oppose or support SB721? That's the dilemma for everyone in the community association industry. What are the opposition arguments? Inspection costs? The expense is amortized over six years. Unnecessary regulation? California law already imposes liability for injury and damage arising out of foreseeable risks, and that includes decay and dry rot to structural components that could be determined by reasonable inspection. SB 721 protects an association from liability by allowing its directors to get in front of the issues by learning of hidden decay that caused the Berkely tragedy. It also defines a process, which, if followed, would support the defense that the community manager and the Directors used due diligence in maintaining the property.
When was the last time critical components were professionally inspected for life-safety issues? The reserve study required by Civil Code Section 5550 only requires a review of those components that are visible and accessible. It does not require structural safety evaluations. If it is already being done by an appropriate expert, this legislation adds little. What other arguments are there? For us, with what we know, the benefits outweigh the negatives. We continue to support the safety and financial health of our clients, and we welcome your comments and suggestions so that together with other industry leaders we can help frame legislation that is sensible and protects community associations and their members.