Understanding California Senate Bills 721 and 326 are crucial for both buyers and sellers who plan on being active in the state's real estate market this year. These regulations are designed to improve the safety of multi-unit residential buildings and complexes, ensuring transparency in balcony and other EEE conditions. Both of these legislations were signed into law by Jerry Brown in response to the UC Berkeley balcony collapse that led to 6 deaths in 2015.
What are EEEs?
Extended Exterior Elements
- Any balcony, walkway or deck is designed and intended for human use.
- Any walking surface of a balcony, walkway or deck that is more than 6 feet above ground level.
- Any balcony, walkway or deck extends beyond a building's exterior walls.
- Any balcony, walkway or deck has load-bearing components made with wood or wood-based products.
Whether you're a buyer looking for a new home or a seller considering selling your property, it's essential to understand how these bills affect you.
Senate Bill 721: Ensuring Safety in Multi-Family Dwellings
Senate Bill 721, also known as the "Balcony Inspection Bill," introduces a mandate for the regular inspection of balconies, decks, stairways, and walkways — collectively referred to as exterior elevated elements (EEEs) — in buildings with three or more multi-family units. These inspections, required to be conducted every six years by qualified professionals, aim to ensure the safety and integrity of these structures by the set deadline of January 1, 2025.
What This Means for You
Sellers
If you're planning to sell a multi-unit residential property in California, Bill 721 directly impacts your responsibilities:
- Compliance: Ensure your property has undergone the required balcony inspections to comply with Bill 721. Non-compliance could potentially delay your sale and create liability concerns.
- Enhanced Trust: Providing potential buyers with the recent inspection report not only demonstrates transparency but also builds trust. It shows that you are proactive and removes the question mark around this new legislation. A more confident buyer can lead to a higher offer in many cases.
Buyers
If you're looking to purchase a multi-unit residential property in California, Bill 721 offers essential safety measures:
- Peace of Mind: Bill 721 mandates balcony inspections every six years, providing assurance that the property you're considering has undergone assessments to guarantee your safety or your renters safety.
- Transparency: Sellers are now required to provide you with the most recent balcony inspection report (if completed) before you sign any purchase agreement. This report gives you invaluable insights into the condition of the balconies. If repairs or improvements are needed you will now be able to factor in those costs and any potential loss of rents against the income generated from the property.
Senate Bill 326: Protecting Residents in Condominiums and CIDs
Complementing SB 721, Senate Bill 326 focuses on condominiums and common interest developments (CIDs), requiring periodic inspections of EEEs. This law aims to provide an additional layer of safety and transparency for residents in these communities.
What This Means for You
Sellers
- Disclosure Obligation: Sellers must adhere to the reporting requirements outlined in Bill 326, ensuring that their Homeowners Association or Management Company provides buyers with the most recent inspection report before any sale. Compliance with Bill 326 is crucial for the buyer's ability to secure financing and in facilitating a successful transaction.
Buyers
- Informed Decisions: Bill 326 grants you the right to request and review the most recent balcony inspection report, empowering you to make an informed decision about the property's safety before making your purchase. If repairs are needed, look into how the Association plans to finance this work. As this is new legislation, few if any Associations accounted for this in their budget. Obtain as much clarification as you can on whether they will be getting a loan or if a special assessment is likely in the near future.
Conclusion
In California's real estate market, understanding and embracing Bills 721 and 326 are essential for our clients, buyers, and sellers. These bills underscore the importance of safety and understanding the ever changing landscape of real estate legislation.
Should you have any inquiries or require guidance as a buyer or seller navigating these bills, please do not hesitate to reach out to us. Our dedicated team of real estate experts is here to support you at every step of your real estate journey, ensuring your safety and peace of mind.
