BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Broker Risk Management (“BRM”) has received volumes of questions regarding the balcony and deck inspection requirements. The following are many of those questions and answers. The balcony inspection statute involves any residential property with three or more units and contains “exterior elevated elements” (“EEE”) which are six feet above the ground or more, such as decks, balconies, or stairs.
Question: When does the wooden balcony statute go into effect?
Answer: There are two applicable statutes — one applicable to apartment buildings and one applicable to condominium projects. Initially, both were effective January 1, 2025. However, that date has been postponed to January 1, 2026 as to all relevant properties with the exception of condominiums. If the subject property is a condominium project, that inspection deadline remains January 1, 2025.
NOTE: Some subdivisions in California have homeowners’ associations (“HOA’s”) but are not “condominium projects.” For example, some subdivisions are a community apartment, stock cooperative, common interest development and undivided interest project (tenancy in common). Those subdivisions are not obligated by this law to conduct nor provide inspection reports for EEEs.
Question: Who is qualified to inspect EEEs?
Answer: For condominium projects, Civil Code 5551(b)(1) provides: “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.”
As of July 15, 2024, civil engineers have been added to the list of inspectors who are authorized to perform inspections of EEEs for condominium associations.
If the property is an apartment building then the inspection may additionally be completed by a general contractor with an “A,” “B,” or “C-5” license (with at least five years of experience) or a certified building inspector.
Question: What should be inspected?
Answer: The law requires a visual inspection of a specified portion of the EEEs. Further, “If during the visual inspection the inspector observes building conditions indicating that unintended water or water vapor has passed into the associated waterproofing system, thereby creating the potential for damage to the load-bearing components, then the inspector may conduct a further inspection. The inspector shall exercise their best professional judgment in determining the necessity, scope, and breadth of any further inspection.”
Question: If this is a condominium project and the HOA is refusing to provide the balcony inspection report for a condominium project, how should the agents handle that situation?
Answer: Please see the attached previous tip “Issues Regarding Balcony Inspections for Condominium Projects,” as well as the attached Buyer-Seller Advisory prepared by Broker Risk Management.
Question: Is the report actually good for nine years? It seems like the conditions can dramatically change in that time.
Answer: A report does not “expire,” nor is it good for a specified period of time. However, the law states that an inspection must be done every nine years. This does not preclude the sellers from disclosing any concerns or issues relating to the EEEs nor prohibit the buyer from inspecting them.
If an EEE fails in the intervening years between inspections, the issue as to who has liability would be derived from the circumstances. For example, was there deferred maintenance? Did the prior inspection meet industry standards? Were prior repairs done properly?
Question: Is the WBSA a part of the Residential Purchase Agreement?
Answer: The Wood Balcony Seller Advisory is not technically part of the RPA, as it will not apply to many transactions. However, if the above laws apply, the WBSA should be provided.
Question: I am representing a buyer who is buying a property with a deck. I am concerned about the requirements for inspecting the deck. How should I advise the buyer?
Answer: BRM has modified its Advisory to include Buyers and Sellers. Please see attached new Advisory.
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