Reserves and Civil Code 5551

BY: MR. KEVIN LEONARD, RS, ASSOCIATION RESERVES

2019 brought about a new legislative requirement that will affect many communities across California. When Governor Newsom signed SB 326 into law last year, a new, significant expense and inspection became a requirement for a large number (but not all!) of California communities that are organized as condominiums.

California Civil Code 5551, which went into effect January 1, 2020 only applies to communities that fit all of the following criteria:

1. Organized as a California condominium;

2. Association contains three or more multifamily dwelling units; and

3. Association areas of maintenance or repair responsibility must include exterior elevated structures (decks, balconies, stairs, walkways and their railings) that:

a. Extend beyond the exterior walls of the building;

b. Have a walking surface six or more feet above ground;

c. Are designed for human occupancy or use; and

d. Are supported in whole or in substantial part by wood or woodbased products.

If your community has determined it fits the criteria, then a qualified inspector must be hired to conduct an inspection. The Code defines the inspector as a licensed structural engineer or architect. The inspector is required to inspect a random and statistically significant sample of elements that fit the criteria noted earlier. “Statistically significant” is defined specifically by the Code as a “sufficient number of units inspected to provide 95 percent confidence that the results from the sample are reflective of the whole, with a margin of error of no greater than plus or minus 5 percent.”

The inspection is to be completed of “load-bearing components together with their associated waterproofing systems” by the “least intrusive method necessary”. This inspection may involve removing a portion of the building envelope to access the structural elements. Additionally, the Code references the possible use of moisture meters, borescopes and infrared technology as possible tools to use in conjunction with the visual inspection. Depending on the observations made, the inspector may need to conduct a more intrusive investigation to ensure 95 percent confidence can be achieved.

This inspection is not to be confused with California Civil Code Section 5550’s requirement for a “reasonably competent and diligent visual inspection” which is for budgetary planning purposes (a part of Reserve Study & budgeting process). The requirement under Section5551 is is intended for generally identifying whether the structural elements are safe or not. Both inspections are important pieces in the operation of a condominium association, but they are conducted by different professionals for different purposes.

The report that is then produced by the licensed structural engineer or architect to comply with Civil Code Section 5551 will include the following information:

1. Identification of what elements fit the criteria to be inspected at the association;

2. Report on physical condition of the elements, including any “immediate threat to the health and safety of the residents”;

3. Anticipated life span remaining of the structural elements & waterproofing systems; and

4. Recommendations for any repairs or replacements of structural elements & waterproofing systems.

This report is then to be stamped or signed by the inspector, presented to the board, and incorporated into the association’s Reserve Study (so be sure to provide a copy to your Reserve Study provider to be incorporated into your next update!).

Additionally, if any immediate threats to health and safety are identified:

1. The inspector is directed by the Code to provide a copy of the report:

a. Immediately to the association upon completion; and

b. Within 15 days of completion to local code enforcement agency

2. The association must take immediate action to prevent people from accessing the area of concern until areas of concern have been repaired and subsequently inspected & approved by the local enforcement agency. (typically a city or county office)

The association’s first inspection, which must be repeated every nine years (to coincide with every third with-site-visit Reserve Study update) must be completed before January 1, 2025. For a new building, where the building permit application was submitted after January 1, 2020, the first inspection must be completed no later than six years after certificate of occupancy. All Civil Code Section 5551 inspection reports are to be maintained for two inspection cycles by the association.

This law is not intended to limit the role or responsibility of associations in their maintenance, repair, inspection and replacement responsibilities. It is intended to supplement normal maintenance and Reserve Study inspections, provide an additional step by a skilled individual to minimize the growth of (expensive) undetected deterioration and ensure safe communities.

Costs for this service (inspection & report ONLY) do not typically include costs for potential repairs to structure and/or waterproofing that may be identified in the inspection process.. Associations are strongly encouraged to obtain estimates from qualified vendors now, so that Reserve budgets can be adjusted to accommodate this significant “every nine year” cost, which needs to be performed in advance of your next Reserve Study with-site-visit update.

Becoming compliant will be an additional expense, but inspections will be early ways to detect and avoid costly common area deferred maintenance and identify problems (hopefully) while they are still small. So, in addition to promoting safety, these inspections may actually provide long-term net cost-savings for associations.

Kevin Leonard, RS is the President of Association Reserves- Inland Empire, LLC. Kevin is responsible for serving the Reserve planning needsof the Inland Empire and Coachella Valley areas.