Condo, apartment owners face high-priced balcony upgrades under new laws

Ten years ago, six people died and seven others were injured after a Berkeley balcony they were standing on collapsed during a late night party.

The location at 2020 Kittredge St., once known as Library Gardens, has since been rebranded and the contractor that oversaw its construction had its license revoked by the state, but regulatory ripples from that incident are now showing up on the radar of Bay Area property owners and homeowner associations in the form of expensive new balcony upgrades.

Known as the "Balcony Bill," SB 326 requires mandatory inspections of "elevated exterior elements" in condo buildings of three units or more. These include balconies, decks and walkways in condo complexes and associations, and the inspections must be performed by licensed professionals — but whoever does the inspection cannot also do the work.

The law went into effect on Jan. 1, 2020 and mandated that homeowner associations complete their initial inspections by the start of 2025, with the stipulation that the property must be inspected at least once every nine years thereafter.

What this means for the individual condo owner is that they have to plan the upgrades through the HOA, which could already have a backed-up schedule.

This process takes planning and doesn't come cheap, especially if repairs are required. But sometimes there is no HOA. Compass agent Joel Luebkeman, who also sits on the board of the San Francisco Association of Realtors, said many of the smaller buildings are self-managed and a lot of them are more than a century old. He said many of these buildings that go on the market haven't done inspections, meaning that the buyers, unbeknownst to them, can get hit with huge upgrade costs down the road.

"The balcony needs to be built to current code, and so that is why it can be very expensive," he said. "So if I'm representing a buyer on one of these buildings and they haven't done these inspections, and then 23 years down the road, even though they're out of compliance and they're supposed to have done them, for whatever reason, they finally they get their act together and they do the inspection, the replacement of these exterior elevated elements, these staircases or balconies, it can easily be a $100,000 job."

And it's not just condo owners; rental properties are now going through the same onerous inspections upgrades via another soon-to-be effective law, SB 721. This related law, which also came out of the 2015 tragedy in Berkeley, applies to apartment buildings and other rental properties. It requires an initial inspection before Jan. 1, 2026, prompting property owners to take notice.

In terms of the coming apartment inspection deadline at the beginning of next year, Charley Goss, government and community affairs manager for the San Francisco Apartment Association, said that right now the focus is on the "significant overlap" between the requirements under Section 604 of the San Francisco Housing Code and SB 721.

Goss said that under the requirements of Section 604, which has been in effect since 2002, San Francisco rental property owners have completed regular inspections of decks, balconies, landings, exit corridors, stairway systems, guardrails and fire escapes for decades now. Moreover, Section 604 requires inspections of these areas every five years.

"We’re investigating ways we can streamline these two inspection processes for San Francisco property owners that meets the inspection obligations under each law in a more coordinated and aligned way," he said, noting that SB 721 also requires an inspection of many of these same exterior elevated areas, but every six years. "We’d like to see more alignment between these two laws. We understand and agree with the importance in ensuring that these areas are regularly inspected and are safe, but it’s redundant and inefficient for San Francisco rental property owners to comply with Section 604 every five years and also conduct a re-inspection of many of these same building areas under SB 721 every six years."