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Appreciating the Nuances of Structural Defect Issues

and Related Legislation

PRESENTED BY

John P. Gill, EsqHughes Gill Cochrane Tinetti, PC

Mike MastropietroOCBS, Inc.

Roy HelsingThe Helsing Group, Inc.

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Learning Objectives

• REVIEW the inspection, reporting, and repair obligations required by pending legislation

• UNDERSTAND the impact on managers and associations

• IDENTIFY the hidden challenges facing condominium associations

• LEARN strategies to help clients identify and implement their legal obligations

• RECOGNIZE the limits of the manager role and learn how to partner with others effectively to get the job done

SB 721 – Two-Year Bill

• Background – What prompted this bill?

• Substance off the bill in current form

• Impact on managers and associations

• Destructive testing – What does it really mean?

Berkeley Balcony Collapse

• Library Gardens Apartments –construction completed in 2006

• June 16, 2015: 5th floor balcony collapsed

• 13 people fell 40 feet – 6 died and 7 injured

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Independent InvestigationCSLB investigated causes of collapse:

• “. . . imposed load of the (13) students was well within the design limits of the balcony structure”

• “Dry rot along the top of the joists suggests long-term moisture saturation . . . of OSB Oriented Strand Board in direct contact with the joists”

• “Additional locations of water damage and dry rot were found to the wall OSB sheathing and the face of the doubled deck joists along the deck edge to wall interface”

Contributing factors to the balcony failures:

• Failure to use pressure-treated structural support joists

• Substitution of OSB sheathing for plywood

• Failure to provide the specified membrane protection “which could have protected the OSB sheathing from moisture saturation”

Independent Investigation (continued)

Balcony deck-to-wall sheet metal flashing was not lapped over

membrane or lath paper, resulting in extensive damage and dry

rot to building wall OSB sheathing

Independent Investigation (continued)

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Berkeley Inspection Ordinance

On July 14, 2015, 28 days after the balcony collapse, Berkeley City

Council approved an emergency ordinance mandating inspections

every five years of all balconies and other weather-exposed

structures in all multi-unit buildings.

SB 721 Follows Berkeley Ordinance• Introduced in 2017 legislative session

• Supported by Consumer Attorneys of California (state trial lawyers organization)

• Create Civil Code § 4776 to apply to condominium CIDs

• Bill specifically excludes planned developments and an individual condominium owner’s “separate interest”

SB 721 Inspection Requirements

As currently drafted, SB 721 would require:

• Inspection at least once every six years “of the load-bearing components and associated waterproofing elements of exterior elevated elements”

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As currently drafted, SB 721 would require:

• Inspections by a licensed architect, civil or structural engineer, or “an individual certified as a building inspector or building official” from a recognized state, national or international association, as determined by the local jurisdiction

SB 721 Inspection Requirements (continued)

“Exterior elevated element” means common area and exclusive use common area “balconies, decks, porches, stairways, walkways, entry structures, and their supports and railings” that

• extend beyond exterior walls of the building,• have a walking surface elevated more than 6 feet above ground level,• are designed for human occupancy or use, and• rely in at least substantial part on wood or wood-based products for

structural support or stability of the exterior elevated element

SB 721 Inspection Requirements (continued)

“Associated waterproofing elements” include “flashings, membranes, coatings, and sealants that protect the load-bearing components of exterior elevated elements from exposure to water and the elements”

SB 721 Inspection Requirements (continued)

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“Load-bearing components” are “components that extend beyond the exterior walls of the building to deliver structural loads from the exterior elevated element to the building”

SB 721 Inspection Requirements (continued)

• Must determine that exterior elevated elements and their associated waterproofing elements are in a generally safe condition, adequate working order, and free from any hazardous condition caused by fungus, deterioration, decay, or improper alteration to the extent that the life, limb, health, property, safety, or welfare of the public or the occupants is not endangered”

SB 721 Inspection Requirements (continued)

Minimum Inspection Requirements

• Identify “each exterior elevated element that, if found to be defective, decayed, or deteriorated to the extent that it does not meet its load requirements, would . . . constitute a threat to the health or safety of the occupants”

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• Assess the load-bearing components and associated waterproofing elements of the exterior elevated elements “using methods allowing for the evaluation of their performance by direct visual examination or comparable means of evaluating their performance” (destructive testing)

• “A sample of at least 15 percent of each type of exterior elevated element shall be inspected”

Minimum Inspection Requirements (continued)

• Inspector’s assessment must address:

• Current condition of the exterior elevated elements

• Expectations of future performance and projected service life (for purposes of reserve study funding)

• Recommendations for further inspection

• Recommendations for repair or replacement

Minimum Inspection Requirements (continued)

• Association’s initial inspection must be completed by January 1, 2024, and every six years thereafter

• Following initial report, inspector must submit “a final report indicating that any required repairs have been completed”

Additional Reporting Requirements

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• “An exterior elevated element found to be in need of repair or replacement by the inspector shall be corrected by the association”

• Association shall have access easement through separate interests as necessary to accomplish inspections and any necessary repairs

Repair Obligations

• Repair and replacement work by qualified and licensed contractor must comply with:

• Inspector’s recommendations, or alternative recommendations by another licensed professional

• Applicable manufacturer’s specifications

• The California Building Standards Code, consistent with Health & Safety Code § 17922(d)

Repair Obligations (continued)

• Immediate threat requires immediate corrective action

• If no immediate safety threat, association must apply for a permit within 120 days of receipt of the inspection report

• After permit approval, association has 180 days to make repairs

Repair Timeline

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Effect on Levy of Association Assessments

• All costs associated with inspections and repairs (including non-threatening conditions) are considered an “emergency situation” per Civil Code § 5610(b)

• Section 5610(b) permits an emergency assessment without a member vote

Association/Management Responsibility

• Board of Directors shall cause inspections and testing to be completed

• Association is responsible for compliance

• “Nothing required herein shall be the responsibility of the association’s managing agent or its employees”

Manager Considerations

• Educating board members

• Scope of site visits

• Do NOT assume the role of “expert”

• Develop system for receiving member reports and relaying concerns to board

• Authority to contact construction professionals

• Avoid assurances of safety

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Effect on Budgets

• Assemble inspection and testing team early• Inspector

• General contractor

• Structural engineer

• Logistics of inspections and testing

• Member communication

• Access to unit interiors

• Project manager retention

Developer Considerations

• Implications of SB 800

• Builders may begin to re-map condominiums to include balconies within “units”

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Risks and Challenges

• What does “determine” mean?

• Is testing of 15% of exterior elevated elements enough to “determine” the condition of all such elements?

• What does 15% mean?

• Budget considerations

• Board and member education considerations

• Risks of noncompliance

• Manager liability avoidance

Risks and Challenges

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Questions?

Thank you!