Episode Transcript
[00:00:00] Speaker A: It's time for California law updates simplified the show for California property managers, owners and HOA board members bringing clarity to California ordinances and compliance requirements.
[00:00:14] Speaker B: Welcome to the deep dive. Today we're digging into some really critical information for property owners and managers, especially if you're operating here in California.
[00:00:24] Speaker A: That's right. We've been looking through a whole stack of recent updates, webinar materials, legislation, trying to pull out the absolute must knows for everyone.
[00:00:35] Speaker B: Yeah, things are changing fast. We're talking about everything from, you know, major safety deadlines like those balcony inspections, to new landlord tenant regulations that could really impact your day to day.
[00:00:46] Speaker A: It is a complex landscape, no doubt about it. And our mission today really is to cut through some of that noise and just focus on what truly matters for you.
[00:00:53] Speaker B: Exactly. We want to give you the vital knowledge you need to stay compliant, avoid some hefty penalties, and just, well, protect your assets. So let's dive right in because honestly, some of these deadlines are coming up fast.
[00:01:04] Speaker A: They really are.
[00:01:05] Speaker B: Okay, so let's kick things off with what feels like maybe the most pressing issue right now, the one with really serious safety implications.
[00:01:12] Speaker A: Yeah.
[00:01:13] Speaker B: Those state laws about inspecting balconies and other. What are they called? Eaes.
[00:01:18] Speaker A: Ees. Yeah, Exterior elevated elements. And you're right, this should definitely be on everyone's radar, especially given the history here.
[00:01:25] Speaker B: History.
Tell us about that.
[00:01:28] Speaker A: Well, these laws didn't just appear out of nowhere. They stemmed from a really horrific tragedy back in 2015 in Berkeley.
[00:01:35] Speaker B: Oh, I think I remember hearing about that.
[00:01:37] Speaker A: Yeah, it was awful. A balcony collapsed. Thirteen young people fell about 40ft. Six were killed, seven were very severely injured. And the kicker, the building was only nine years old.
[00:01:48] Speaker B: Nine years. Wow. What caused it?
[00:01:50] Speaker A: Extensive dry rot hidden inside the structure. So it wasn't some old neglected building. It looked fine from the outside.
That inc. Well, it really highlights the why behind these inspection laws. It's about preventing another catastrophe like that.
[00:02:04] Speaker B: That really puts it in perspective. A stark reminder. So when we talk about these EEs, it's not just the classic balcony sticking off the side of a building, is it?
[00:02:13] Speaker A: No, not at all. And this is where some confusion can come in. The definition is actually quite broad.
[00:02:17] Speaker B: Okay, break it down for us. What qualifies?
[00:02:20] Speaker A: Sure. So an EE includes basically any balcony, walkway, deck, porch, staircase, landing.
If it meets four key criteria. One, it has to be more than six feet off the ground.
[00:02:32] Speaker B: Okay, six feet.
[00:02:33] Speaker A: Got it. Two, it needs to be designed as a walking surface, so meant for people to walk on.
[00:02:39] Speaker B: Makes sense.
[00:02:39] Speaker A: Three, it has to be on the exterior of the building. And four, this is the crucial one. It has to rely either fully or partially on wood for its structural support or stability.
[00:02:50] Speaker B: Ah, so the wood component is key.
[00:02:53] Speaker C: Wood.
[00:02:53] Speaker B: What if it's all concrete and steel?
[00:02:55] Speaker A: Then it's generally exempt if there's no wood involved in holding it up. These specific laws don't apply.
[00:03:00] Speaker B: What about, say, walkways in an internal courtyard? They're not sticking out from the building, but they could be elevated and made of wood.
[00:03:06] Speaker A: Yep, good question. Those absolutely count. If they meet the criteria over six feet, walking surface, exterior access and wood reliant, it doesn't have to project out.
[00:03:15] Speaker B: Okay, and things like Julia balconies, the purely decorative ones generally?
[00:03:20] Speaker A: No, because there's no walking surface. Same usually goes for roof overhangs not designed to be walked on.
[00:03:26] Speaker B: All right. Okay, that clarifies things. So now we know what an EE is. What are the actual laws we need to know? You mentioned two main ones.
[00:03:33] Speaker A: Exactly. We're mainly talking about Senate Bill 721 or SB 721 and Senate Bill 326. SB 326.
[00:03:40] Speaker B: Okay. SB 721 and 326. What's the difference?
[00:03:44] Speaker A: So think of SB 721 as primarily for apartments. That's multifamily buildings with three or more units. The deadline for this one is January 1, 2026.
[00:03:55] Speaker B: 2026. Okay. Still a bit of time, but not much.
[00:03:57] Speaker A: Right. And interestingly, that deadline actually got pushed back a year. Groups like the Apartment association of Greater LA really advocated for that extension, which was a big help for owners needing more time.
[00:04:09] Speaker B: Good to know. And what does 721 require?
[00:04:11] Speaker A: It requires inspecting a minimum of 15% of each type of EE on the property. So if you have balconies and walkways, 15% of each, an inspector can ask for a larger sample if they see potential issues, though, and every six years. And the inspection can be done by a licensed engineer, an architect, or even a licensed general contractor with specific experience.
[00:04:30] Speaker B: Okay, that's SB721 for apartments. What about SB326?
[00:04:35] Speaker A: All right, SB326 applies to condominium, specifically common interest developments with three or more units, usually managed by an HOA. And here's the critical part. The deadline for this one already passed. It was January 1, 2024.
[00:04:49] Speaker B: Wait, 2024? It already passed?
[00:04:51] Speaker A: It did. And this is a major point of confusion. Many HOAs, their deadline was extended, like the apartments under SB 721, but it wasn't so Frankly, a lot of CONDOR associations are likely out of compliance right now.
[00:05:03] Speaker B: Wow, that's, that's a big deal. What does 326 require? Is it the same 15%?
[00:05:09] Speaker A: No, it's much more stringent. It requires inspections sufficient to achieve a 95% confidence rate that the elements are safe.
In practice, because of how thorough that needs to be, it usually means inspecting effectively 100% of the EES.
[00:05:23] Speaker B: Okay, so pretty much everything needs checking for condos and the frequency, it's less.
[00:05:28] Speaker A: Frequent, only every nine years. But here's another key difference. The inspectors must be licensed structural engineers or architects. General contractor can't do these SP326 inspections.
[00:05:38] Speaker B: So more stringent scope, past deadline, and stricter inspector requirements for condos. That's really important for hoas to understand.
[00:05:47] Speaker A: Absolutely critical.
[00:05:48] Speaker B: Okay, so what does the inspection itself actually involve?
Especially if the wood parts are covered up, like with stucco. You can't just look at it.
[00:05:56] Speaker A: Right. The process usually starts with getting a proposal, often free from an inspection company. Then they do a baseline sampling. If the wood framing is exposed. Yeah, it's mostly visual. But if it's covered, if it's covered, say with stucco or siding, they have to do more. It involves a visual check from the top surface and invasive testing from below.
[00:06:16] Speaker B: Invasive? What does that mean? Drilling?
[00:06:18] Speaker A: Yeah, basically they typically drill a small hole, maybe about an inch in diameter to insert a borescope that's like a tiny camera to look inside at the condition of the wood framing. They're checking for dry rot, water damage, that sort of thing.
[00:06:31] Speaker B: And the holes, they patch them up, I assume?
[00:06:33] Speaker A: Oh yeah, absolutely. They seal them afterwards, usually with plastic plugs, so it's not just left open.
[00:06:38] Speaker B: Okay, so the inspection gets done, you get the report.
What happens next? Is that it?
[00:06:43] Speaker A: No, not quite. Getting the report is really just step one. It kicks off a third three step compliance process, especially if repairs are needed.
[00:06:51] Speaker B: Three steps. Okay. What are they?
[00:06:53] Speaker A: First, obviously complete the inspection by the deadline. Step two, if the report says repairs are necessary, you have 120 days, that's about four months from receiving that report to get all the necessary permits from your local city or county.
[00:07:06] Speaker B: 120 days for permits. It seems tight. If major work is needed, it can be.
[00:07:11] Speaker A: That's why you need licensed architects or engineers involved quickly to draw up and stamp the plans for the permit application.
Then step three, once you get the permits approved, you have another 120 days to actually complete the repairs using a licensed contractor.
[00:07:26] Speaker B: Another 120 days for the work itself. Is there Any wiggle room on that?
[00:07:29] Speaker A: There is potentially. You might be able to get an extension, maybe up to 180 days total for repairs. But you'd need to arrange that with the local jurisdiction. The point is, there are deadlines attached to acting on the report.
[00:07:41] Speaker B: Right? So you can't just sit on a report that says repairs are needed.
[00:07:45] Speaker A: Definitely not.
[00:07:45] Speaker B: And what if someone doesn't comply? What if they miss the inspection deadline or don't get the permits or don't do the repairs? What are the real consequences?
[00:07:53] Speaker A: Well, they're pretty significant. And cities are really starting to enforce this now. You're looking at potential fines of $100 to $500 per day.
[00:08:01] Speaker B: Per day? Ouch.
[00:08:03] Speaker A: Yeah, that adds up fast. But beyond fines, your liability exposure just skyrockets if there is an incident and you weren't compliant. We're also hearing about issues selling properties, especially condos. If the SB326 inspection isn't done, insurance companies might even drop your coverage.
[00:08:21] Speaker B: Drop your insurance. That's serious.
[00:08:22] Speaker A: It is. And in a worst case scenario, the city could even red tag the building, basically declaring it unsafe to occupy. Plus, just practically speaking, waiting until the last minute means repair costs will likely go way up as contractors get booked solid. Closer to deadlines.
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[00:09:16] Speaker B: You mentioned enforcement stepping up. We saw that incident in Silver Lake recently, didn't we?
[00:09:20] Speaker A: Absolutely. That February 15th collapse in Silver Lake. A third floor balcony just gave way, fell onto the second floor one below it.
[00:09:28] Speaker B: Anyone hurt?
[00:09:29] Speaker A: Luckily, the second balcony sort of caught it. And reports said only one person had a broken arm. But imagine if that second balcony hadn't been there. It could have been much, much worse. Yeah, and that incident really lit a fire under local jurisdictions across California.
Many cities are now creating their own specific enforcement programs because of it. They're watching much more closely now.
[00:09:50] Speaker B: So, pulling this all together for balcony safety, what's the main message for property owners and managers listening right now?
[00:09:57] Speaker A: The message is clear. You absolutely need to prioritize these inspections. Don't wait. If you get a passing report, fantastic. File it safely and keep it for the required time. That's 12 years for SB721 properties, 18 years for SB326.
[00:10:12] Speaker B: And if it fails?
[00:10:12] Speaker A: If it fails, that report will likely go straight to the city enforcement agency. You need to jump on getting those permits and starting the repairs within those tight timelines we discussed. Ignoring it is just not an option.
[00:10:23] Speaker B: Yeah, one quick clarification. What about railings?
If a building is older and the railings aren't up to current height codes, does that mean an automatic fail?
[00:10:33] Speaker A: Good question.
Generally, no. If the building structure itself is sound, but the railings are just grandfathered in under older codes, that usually won't cause a failure. On the EE inspection report itself, though, obviously updating railings during any major work is always recommended for safety.
[00:10:49] Speaker B: Okay, that's a really critical deep dive on the balcony safety laws. But the ground is shifting in other areas too, isn't it? Let's pivot a bit now and talk about some other key regulations affecting landlords, particularly in the LA area.
[00:11:02] Speaker A: Absolutely. There's been a lot going on, especially influenced by recent events like the wildfires. Let's start with the price gouging laws in Los Angeles County.
[00:11:10] Speaker B: Price gouging, okay, what's the rule there?
[00:11:13] Speaker A: So this came about after the recent fires? Essentially, it prohibits increasing rent by more than 10% anywhere in LA County.
[00:11:19] Speaker B: Just 10% max increase. Does that apply to everything?
[00:11:22] Speaker A: Pretty much all rental properties in LA County. Month to month, fixed term leases. Doesn't matter. And this isn't short term. It was going to end March 2025, but Governor Newsom extended it all the way to January 2026.
[00:11:36] Speaker B: January 2026. Wow. What about new tenants? If someone moves out and you get a new tenant in?
[00:11:42] Speaker A: Crucial point, if a new tenant moves in after the emergency was declared around the time of the fires, the rent you charge them cannot be more than 10% higher than what the previous tenant was paying.
[00:11:52] Speaker B: So you can't just hike it up significantly for a new lease.
[00:11:55] Speaker A: Not beyond that 10% cap based on the prior rent. Now, if your property is under LA City's Rent Stabilization Ordinance, the rso, you're likely already capped at a lower increase anyway, like 4% or maybe 6% if you pay for utilities. This county rule layers on top.
[00:12:11] Speaker B: What if the unit was vacant before the fires?
[00:12:14] Speaker A: If it was legitimately vacant before the emergency declaration, you can use the HUD fair market rent for your area as a baseline but even then, the new rent can't exceed 160% of that fair market rent figure. You can find calculators online to check that HUD number for your zip code.
[00:12:30] Speaker B: This sounds complicated. What happens if a landlord gets it wrong?
[00:12:33] Speaker A: The penalties are serious. It's actually a criminal misdemeanor. You could face up to a year in jail, a $10,000 fine, plus having to pay back any rent collected over the legal limit.
[00:12:45] Speaker B: Jail time for a rent increase?
[00:12:47] Speaker A: Potentially, yes. Tenants are aware of this. There's a city hotline and they are making complaints. The bottom line is you absolutely need to consult an attorney familiar with these local rules before you set a rent for a new tenant or issue any rent increase right now. It's just too risky otherwise.
[00:13:03] Speaker B: Okay, what else is new in la?
[00:13:05] Speaker A: Big one for LA City landlords. The new enforcement program for non RSO rentals.
[00:13:10] Speaker B: Non rso? So this isn't just for rent controlled buildings?
[00:13:14] Speaker A: Exactly. This now applies to all rental properties in the city of Los Angeles that are not under the rso. That includes single family homes. You might be renting out condos, newer apartment buildings. They all now have to be registered with the LA Housing Department.
[00:13:27] Speaker B: Wait, even if I just rent out one condo in LA City, I have to register it?
[00:13:31] Speaker A: Yes, that's the change. There's an annual registration fee. Seems to be around 31 to $34 currently. The first deadline was technically February 28, but officials have indicated they'll be sending out bills with instructions. So don't panic if you miss that exact date, but do act when you get the notice.
[00:13:49] Speaker B: And what do you have to do besides pay the fee?
[00:13:50] Speaker A: You have to get a registration certificate and display it somewhere conspicuous in the building, like a lobby.
Or you need to make sure the tenant receives a copy. You can email it, mail it, or even post it on their door. Having this registration proof is going to be vital if you ever need to pursue an eviction. No registration, Potentially no eviction.
[00:14:09] Speaker B: Okay, registration for all LA City rentals. What else? You mentioned wildfires earlier, right?
[00:14:14] Speaker A: There's also a specific wildfire eviction moratorium currently in effect in LA County. This provides some protection against eviction for non payment of rent, specifically for rent due between February 1, 2025 and July 31, 2025.
[00:14:28] Speaker B: So tenants just don't have to pay rent if they were affected by wildfires?
[00:14:32] Speaker A: Not quite that simple. They have to meet very specific criteria to qualify. They need to prove they lost at least 10% of their income or lost their job because of the wildfire. And their household income has to be below 150% of the area median income.
[00:14:46] Speaker B: That sounds pretty specific.
[00:14:48] Speaker A: It is. And importantly, unlike some previous Covid related moratoriums, tenants cannot just self certify for this one. They need actual proof. This makes it harder to abuse. Frankly, if they do qualify, the unpaid rent isn't forgiven. They get 12 months to repay it.
[00:15:03] Speaker B: Got it. What about renovations? I know sometimes landlords need tenants to move out for major work.
[00:15:09] Speaker A: That avenue is currently closed off for many.
The ability to evict a tenant from a non rent controlled Property using a 60 day notice specifically for substantial renovations. Think major structural, electrical, plumbing work that's been paused.
[00:15:23] Speaker B: Paused until when?
[00:15:25] Speaker A: The current Pause runs until August 1, 2025. It's possible it could be extended further. So right now you generally can't use that specific reason to terminate a tenancy in those properties.
[00:15:35] Speaker B: Okay. Two more quick ones I think were mentioned, something about credit reporting.
[00:15:39] Speaker A: Yes, Positive credit reporting requirements under Assembly Bill 2747. This applies if you're a landlord with 15 or more units or if you own more than one rental property or if you own through a corporation. So it covers a lot of landlords.
[00:15:53] Speaker B: And what does it require?
[00:15:54] Speaker A: You now have to offer your tenants the option to have their on time rent payments reported to a major credit bureau. You don't have to force them, but you have to give them the choice. There was a notice requirement for this that tenants should have received by 4-1-2025.
[00:16:08] Speaker B: Interesting offering to help build their credit. And the last one. Security deposits.
[00:16:13] Speaker A: Right. The new Security Deposit Law, AB 2801. This is all about creating more transparency and hopefully reducing disputes over deductions. It's rolling out in two stages.
[00:16:24] Speaker B: Okay. Stage one.
[00:16:25] Speaker A: Stage one became effective April 1, 2025. For existing tenancies. When a tenant moves out, the landlord must take photos documenting the condition of the unit after the tenant leaves, but before any cleaning or repairs are done.
[00:16:37] Speaker B: Photos after move out before touching anything. Got it. Stage 2.
[00:16:41] Speaker A: Stage 2 kicks in July 1, 2025.
From that date forward, landlords will also need to take photos documenting the unit's condition immediately before a new tenancy begins.
[00:16:52] Speaker B: So photos before move in and after move out?
[00:16:55] Speaker A: Exactly. The idea is to have clear visual evidence from both ends of the tenancy to justify any deductions from the security deposit for damages beyond normal wear and tear. It forces better documentation.
[00:17:07] Speaker B: Wow, that is a lot of new rules and dates to keep track of. Price gouging caps, mandatory registration moratoriums, pauses on renovation, evictions credit reporting offers, photo documentation.
[00:17:19] Speaker A: It really is. And it underscores why staying informed isn't just a good idea anymore. It's absolutely essential if you own or manage property in California, especially la.
[00:17:28] Speaker B: So what's the bottom line for our listeners trying to navigate all this?
[00:17:31] Speaker A: Know your property's specific situation. What city is it in? Is it under county jurisdiction? Is it rent controlled? These details matter hugely and honestly. Before making any significant moves, especially around rent increases or evictions, talk to an attorney who specializes in California landlord tenant law. The landscape is just too complex and changes too frequently to rely on old information.
What was legal last year might put you in serious trouble today.
[00:17:57] Speaker B: Okay, one last quick topic before we wrap up. Accessory dwelling units. ADUs still a really hot topic, right? Any updates there?
[00:18:04] Speaker A: Yes, the state is definitely still pushing ADU development.
One key thing is AB 1332. By January 1, 2025, all cities and counties in California were supposed to have developed programs offering pre approved ADU plans.
[00:18:18] Speaker B: Pre approved plans? What does that mean?
[00:18:20] Speaker A: It means the city provides a set of standardized ADU designs that have already gone through some level of plan check. The goal is to make it faster, easier and cheaper for homeowners to get permits and build an adu. Because you're starting with a design the SETI already likes.
[00:18:33] Speaker B: That sounds like it could streamline things quite a bit. Anything else on the horizon for ADUs?
[00:18:37] Speaker A: There's also talk an assembly bill in the works that might soon allow homeowners to actually sell their ADUs separately from the main house, almost like a condo. That could be a game changer for creating more affordable homeownership options.
Keep an eye out for that one.
[00:18:53] Speaker B: Interesting. So building an ADU for extra income, family housing, or just property value, it seems like the state is trying to make that pathway even smoother.
[00:19:02] Speaker A: Definitely seems to be the direction.
[00:19:04] Speaker B: All right. Well, we have covered a tremendous amount of ground today from those urgent balcony inspections, remembering the human cost behind those laws, all the way through the maze of LA rent rules, price gouging limits, and even down to taking photos for security deposits.
[00:19:20] Speaker A: Yeah, it's a lot. I think the biggest takeaway really is that managing property effectively in California today demands constant vigilance. You have to stay on top of this rapidly evolving legal and safety environment.
[00:19:32] Speaker B: Knowledge isn't just power. It sounds like it's essential for survival.
[00:19:35] Speaker A: Legally speaking, it really is.
Know your specific property details, know the rules that apply to you, and please don't hesitate to get professional advice, especially from legal counsel, when things get complicated, which they often do.
[00:19:50] Speaker B: So maybe a final thought for everyone listening as all these regulations pile up, requiring more documentation, more diligence, more specific knowledge.
Is the very nature of being a landlord changing? Is it becoming less of a passive investment and more of a highly specialized, demanding profession in its own right?
[00:20:10] Speaker A: That's a really interesting question to ponder. It certainly feels that way sometimes.
[00:20:13] Speaker B: Something to think about as you navigate this complex world. We really hope this Deep Dive today has given you some valuable insights and maybe a clearer path forward on some of these issues. Thanks so much for joining us.
[00:20:24] Speaker A: Thanks for having me and we'll see.
[00:20:25] Speaker B: You next time on the Deep Dive.
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