“new language serves a dual purpose:
first, to promote the safety and welfare of community association residents and their guests; secondly, to protect consumer’s rights
”
Civil Code, and require the following: condominium associa- tions would be required to conduct a visual inspection either by a licensed, qualified architect or structural engineer with similar credentials, every nine years. Tese consultants would need to be familiar with the project’s elevated components by reviewing plans, after they would generate a random list for each construction type of each component. Te inspec- tion will need to be of a “statistically significant” sample of elevated structures, such as balconies, decks, stairways and railings, and a report would be produced of the results of the inspection. If evidence of water intrusion is found, the inspector would use his or her best profes- sional judgment in deciding on any further needed investigation, and would produce a report to the association. Te first inspec- tion would need to be completed by January 1, 2025.
Te report would need to include the fol- lowing information: (1) the identification of the building components comprising the load-bearing components and associated waterproofing system; (2) the current physi- cal condition of the elevated structures (3) the expected future performance and remaining useful life of the components; and (4) recommendations of any necessary repairs. Te inspector would also notify the local code enforce- ment agency of any imminent threat to personal safety. Tus, a plan for preventative maintenance on elevated walkways, bal- conies, decks and stairways is now possible, but in a more fis- cally responsible manner than S.B. 721 required.
Te second part of SB 326, the “consumer protection” portion of the bill, is new this year and involves the ability for associa- tions in projects less than 10 years old to engage the builder in claims for defective construction. Over the course of several years since S.B. 800 (the “right to repair” law) was passed, de- velopers of new condominium and townhome projects have increasingly been drafting their governing documents to in- clude stringent requirements that obligate boards to get a vote
14
), the court dismissed an association’s claim for $5 million in damage because the association filed their suit before obtaining the vote, despite the fact that a later vote resulted in 92 of 93 association members voting in favor of the claim.
of the membership before that board can claims against the builder for defective construction. In certain circumstances, a “super-majority” vote of 66% or even more of the member- ship must be satisfied before a board may pursue a legitimate claim. In a recent 2018 case (Branches Neighborhood v. CalAt- lantic Group1
Te legislature is now considering the ex- treme effects of having such requirements in governing documents. Typical clauses require a membership vote (usually a su- permajority of at least 66%) before the Board can retain counsel to advise them as to whether or how to proceed; require a membership vote before a Board can spend any association funds to investigate whether construction deficiencies may exist; require notice to be given to the Developer of any Board meetings where construction defects may be discussed (in open or executive ses- sion), long after Developer representatives
have left the Board; permit Developer representatives to sit on Boards long after all units are sold; and include a provision in the governing documents which prohibits Boards from amend- ing its CC&R’s to remove these “poison pen” provisions with- out the Developer’s consent.
By removing these obstacles, S.B. 326 would protect associa- tion board’s rights to pursue valid claims, which is a fiduciary obligation anyway. California Civil Code Section 5800(f) de- scribes the fiduciary duty of board members, providing that the scope of board members’ duties includes “whether to conduct an investigation of the common interest development for latent deficiencies prior to the expiration of the applicable statute of limitations,” and “whether to commence a civil action against
1 Branches Neighborhood Corp. v. CalAtlantic Group, Inc
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