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New Inspection Requirements Imposed on Some Multi-Family Building Owners

By Procopio Associate Kia R. Brady

Owners of multi-family buildings, beware! A new law that went into effect in September 2018 imposes new requirements regarding inspections, reporting and repairs that could result in significant penalties and even property foreclosure for non-compliant owners.

This new law (SB 721) affects owners of multi-family buildings containing at least three units and featuring an exterior elevated element with a load-bearing component, such as a balcony, deck, porch, stairway or entry structure, but specifically excludes common interest developments. For buildings falling under the new regulations that are already certified for occupancy, the owner must retain either a licensed architect, a licensed civil or structural engineer or a building contractor to complete a visual inspection of these elevated elements by January 1, 2025 (with certain exceptions). This is not a one-time requirement, but rather is ongoing, requiring subsequent inspections every six years.

Following the inspection, various deadlines apply:

  • The building inspector must provide the owner with an initial report within 45 days of the inspection.
  • Should an elevated element pose a critical safety threat, the building inspector must submit a copy of the report to the owner and the local enforcement agency within 15 days, and the owner must immediately perform preventative measures.
  • For non-emergency or non-life threatening discoveries, the owner must apply for repair permits within 120 days after receiving the inspection report, and has 120 days to complete the repairs after the permit is approved.
  • The inspector must provide a final report indicating completed repairs should the owner request it.
  • If the required repairs aren’t completed by the owner within 180 days, the inspector must notify the owner and local law enforcement of the non-compliance.

Owners face significant liability if repairs are not completed within 30 days of receiving a notice of non-compliance. These could include civil penalties totaling as much as $500 per day, as well as a safety lien on the building filed with the county recorder’s office. This lien could be foreclosed by an action brought by the appropriate local jurisdiction, and the owner could even face liability for related enforcement costs.

One benefit to property owners, however, is that the new law also amends the California Civil Code to authorize owners to enter rented dwellings to comply with the new inspecting, testing and repair requirements.

A word of caution for condominiums converters of multi-family buildings which are subject to this law: You must have a building inspector perform its inspection prior to the first close of escrow of a condominium, for condominiums being sold to the public after January 1, 2019. The building inspector’s report and written confirmation by the building inspector that any recommended repairs or replacements have been completed are conditions to the issuance of a final public report from the Department of Real Estate.  Copies of the report and written confirmation must also be provided to buyers. 

You may have a lot of questions right now, which is understandable. Complicating the matter is that while you as an owner have an affirmative obligation to correct all repairs or replacements identified by a building inspector, the law does not address what sample area a building inspector should inspect, or what happens when an owner disagrees with the repair recommendations or even with whether a finding constitutes a true life-threatening emergency. Thus, to the extent possible and permitted by law, these issues should be addressed by the owner and building inspector prior to the inspector being engaged. Doing so can avoid uncapped financial exposure to property owners both immediately and in the future through assessment at the time of the building sale. Owners should consult with their legal counsel to better understand their immediate and ongoing obligations under this new law.

 

Kia R. Brady is an attorney in Procopio’s Real Estate practice group. She counsels clients on a wide range of real estate transactions, including acquiring, developing and disposing of retail, agricultural, commercial, residential and industrial real property; negotiating and drafting commercial leases and easements; and preparing homebuyer purchase documentation for subdivided land projects.  Mrs. Brady is well experienced in forming homeowner associations for subdivided land projects and obtaining public reports from the California Department of Real Estate.