[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.
Welcome back to the Deep Dive. Our mission today is really a critical one. We're doing a deep dive into avoiding those catastrophic, really expensive technical mistakes in landlord tenant law. We're focusing squarely on eviction actions and compliance, especially navigating the. Well, the very high stakes legal terrain in California and specifically la. It's unforgiving.
[00:00:38] Speaker B: It absolutely is. High stakes is the right term. When we talk about this. We're really trying to help you avoid basic mistakes. And these aren't just, you know, small errors.
[00:00:48] Speaker A: Right.
[00:00:48] Speaker B: They can cost thousands in legal fees. Sure. But they can also completely invalidate years of rent collection or just throw out a legally solid eviction case entirely.
[00:00:57] Speaker A: Wow.
[00:00:58] Speaker B: They often call the whole thing, the eviction, a rabbit hole.
[00:01:00] Speaker A: Yeah, why is that?
[00:01:01] Speaker B: Because these days, the procedural technicalities just have to be followed perfectly. If you miss one subtle step, maybe something from decades ago or something confusing from the COVID period.
Yeah. You lose. Simple as that.
[00:01:14] Speaker A: And that's the core danger, isn't it? That's what we want to unpack for you today. We're zeroing in on these compliance and procedural pitfalls. Some seem obvious, maybe, but like you said, many were set years ago.
[00:01:27] Speaker B: Exactly. Lurking, working.
[00:01:29] Speaker A: Yeah. Waiting to surface and just blow up an eviction, even if the tenant genuinely owes a ton of back rent. Okay, so let's start with something that feels quantifiable, but you're saying is maybe the most dangerous. Rent increase notices.
[00:01:43] Speaker B: Definitely one of the most dangerous, because errors made here, they introduce a defect that literally travels with the property for years.
It doesn't just go away.
[00:01:53] Speaker A: Okay, lay it out for us. What are the rules?
[00:01:55] Speaker B: All right, so let's start with the baseline. This is statewide notice periods for rent increases. If the increase is less than 10%, you need to give a 30 day notice, standard enough.
[00:02:04] Speaker A: Okay?
[00:02:04] Speaker B: But if that increase hits 10% or goes over 10%, the requirement jumps big time. Becomes a 90 day notice.
[00:02:11] Speaker A: 90 days, okay. And that's where the mistake happens. Someone uses the wrong notice period.
[00:02:15] Speaker B: That's the classic costly error. A landlord raises the rent, let's say 11%, just that extra 1% over the threshold. And they use the shorter 30 day notice thinking maybe it's close enough or they just didn't realize.
[00:02:28] Speaker A: And that 1%, that's the killer.
[00:02:31] Speaker B: It's catastrophic, legally speaking. That notice, it's immediately defective. It's illegal, which Means the rent increase itself is totally ineffective.
[00:02:40] Speaker A: Okay, but what does that mean, years later? That's the part I'm trying to grasp. The retroactivity.
[00:02:44] Speaker B: Right. So what people often fail to understand is this.
If a client comes to me, say, three years after they made that mistake, with the 11% increase in the 30 day notice, we have to look back and the conclusion is unavoidable.
The rent increase they thought they imposed years ago, it was unlawful from day one.
[00:03:02] Speaker A: So every payment since then, every single.
[00:03:04] Speaker B: Rent payment the tenant made since that point is based on a defective illegal calculation. And that defect, it taints everything that follows.
Any future notices, any eviction attempt based on non payment of that illegal rent, it's all potentially invalid.
[00:03:20] Speaker A: So you actually have to unwind it. That term you used, especially with all the COVID complications. Like for Larso Properties, Los Angeles Rent Stabilization Ordinance. What does unwinding look like there?
[00:03:33] Speaker B: Well, for Larso Properties, remember, rent increases were totally banned during certain Covid periods.
[00:03:39] Speaker A: I remember that.
[00:03:40] Speaker B: So if an owner mistakenly put one through anyway, the law says you have to stop immediately. Calculate how much was overcharged going back month by month.
[00:03:49] Speaker A: Wow.
[00:03:49] Speaker B: And you have to refund it to the tenant. And we're seeing major tenant defense firms. You mentioned BASA earlier. They're not just defending evictions anymore. They're actively suing landlords specifically to claw back that illegally collected rent.
[00:04:03] Speaker A: But beyond the numbers you mentioned, these documentation and procedural hurdles, things that can just stop a case cold even if the tenant really does owe money. What are these non starters?
[00:04:13] Speaker B: Well, here's a big one. And this is statewide under the civil code. It's the notice of change in ownership requirement.
[00:04:19] Speaker A: Change of ownership. Okay, what's required?
[00:04:21] Speaker B: If you buy a rental property, you must notify all the tenants about the new ownership. You have to provide your contact information and crucially, tell them exactly where they should drop off the rent.
[00:04:32] Speaker A: Okay. Seems straightforward. But what if someone missed that? Say they bought the place 10 years ago and just forgot or didn't know?
Can they argue the tenant obviously knew because they started paying rent to the new owner. Does that count?
[00:04:45] Speaker B: You'd think maybe, right? Yeah, but the courts are incredibly rigid on this. No, if you missed sending that formal notice 10 years ago. Yeah, you lose the ability, the legal right to use any non payment that happened during that entire 10 year period of non compliance as a basis for an eviction.
[00:05:05] Speaker A: Wait, seriously? So if the tenant stopped paying last year, but the notice was missed 10.
[00:05:08] Speaker B: Years ago, you can't use last year's Nonpayment to evict. Not until you fix the original problem. You have to become compliant now, serve the proper change of ownership notice today.
And then you basically have to wait for a future act of non compliance. It essentially gives the tenant a free pass for all past non payment until you correct that decade old procedural mistake. It's brutal.
[00:05:29] Speaker A: Wow. That completely changes the due diligence you need to do when buying a property you're inheriting. Potential compliance bombs.
[00:05:35] Speaker B: Absolutely.
[00:05:36] Speaker C: California property owners and managers, new property laws are here. AB 628 by 2026, rentals need working stoves and fridges to be habitable. AB 246, no evictions for late rent due to Social Security delays. AB414, return security deposits electronically if tenants agree. AB863 by 2027. Eviction summons must be multilingual.
AB325 pricing algorithms face antitrust scrutiny. Balcony laws, SB326 and SB721 inspections are due by January 1, 2026. Or face fines, liability and lower property value. Act now boost revenue, stay compliant. Join our free informational California Law Updates
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[00:06:32] Speaker B: Okay, let's shift gears now dramatically. Actually, we need to talk about a set of laws driven by some really tragic events. Laws designed to protect lives, prevent horrible accidents. California's balcony inspection laws.
[00:06:44] Speaker A: Yeah, this is. This is incredibly serious stuff.
[00:06:46] Speaker B: The human cost you mentioned. The source material is just heartbreaking.
[00:06:49] Speaker A: It really is. The gravity can't be overstated. We're Talking statistically over 6,000 serious injuries every year with related to what they call exterior elevated elements, or es.
[00:07:00] Speaker B: Es? The balconies, decks, stairs.
[00:07:02] Speaker A: Exactly. Balconies, decks, walkways, exterior stairs. And there's a really alarming 21% annual increase in failures of balconies and decks. And tragically, about 140 children die each year in incidents related to these E's.
[00:07:16] Speaker B: That's awful. And the cause is usually hidden.
[00:07:18] Speaker A: Over 90% of the failures in the last couple of decades involved undetected wood deterioration. Dry rot essentially hidden inside the structure.
[00:07:28] Speaker B: Wow.
[00:07:28] Speaker A: It's not just some theoretical risk. It's a widespread structural problem. And the big catalyst for these laws, the event that really forced the issue, was that horrific balcony collapse in Berkeley back in 2015.
[00:07:40] Speaker B: I remember that. It was terrible.
[00:07:41] Speaker A: Thirteen young adults, mostly Irish students, fell 40ft. Six died, seven were very seriously injured. And the truly shocking part, the building was only nine years old.
[00:07:52] Speaker B: Nine years old. And it failed from dry Rot.
[00:07:54] Speaker A: Confirmed cause was dry rot. That event directly led to the state enacting these specific inspection laws. And it's not like the problem went away. Just this past February 2025, there was a balcony collapse in Silver Lake.
[00:08:06] Speaker B: Really?
[00:08:07] Speaker A: Yeah, a third floor balcony gave way, but luckily got caught by the second floor balcony below it. No fatalities, thankfully. But you hear about other failures too, Malibu, other parts of la. It's a persistent local danger.
[00:08:18] Speaker B: Okay, so with that context, the human cost, the real danger.
Lets break down the two main laws governing these inspections because understanding the differences is absolutely crucial. Right. SB721 and SB326. How do they compare? Who needs to worry about which?
[00:08:33] Speaker A: Absolutely critical to know which applies. So we have two key laws. First is SB721. This one applies to multi family apartment buildings with three or more units.
[00:08:41] Speaker B: Apartments. Three plus units. Yep. Okay, deadline.
[00:08:43] Speaker A: The deadline for SB721 is December 31, 2025. Now this is important. That deadline was actually extended by one year from the original date. So end of next year.
[00:08:52] Speaker B: Okay, December 2025. For apartments, what's the inspection scope? Did they check every single balcony?
[00:08:58] Speaker A: No, not for apartments under 721. The requirement is to inspect a minimum sample, 15% of each type of EE. So if you have balconies and exterior stairs, you need 15% of your balconies inspected and 15% of your stairs inspected and so on.
[00:09:12] Speaker B: 15% sample who can do that inspection.
[00:09:14] Speaker A: For apartments, the list is a bit broader. It can be a licensed structural engineer, a licensed architect, a general contractor with specific licenses A, B or C5 or certain certified building inspectors.
[00:09:27] Speaker B: Okay, and how often?
[00:09:28] Speaker A: Every six years. And you have to keep the inspection reports on file for 12 years, which covers two full inspection cycles.
[00:09:35] Speaker B: Got it. What about new buildings?
[00:09:37] Speaker A: Good question. If the building Certificate of occupancy, the COO, was issued before January 1, 2019. Wait, let me check my notes. Ah, sorry. If the CO was issued before 2021, the December 2025 deadline applies. If the CO is after 2021, then your first inspection is due six years from the CO date.
[00:09:56] Speaker B: Okay, six years from CO for newer apartment buildings. Now what about condominiums or buildings run by HOAS? That's SB326, right?
[00:10:02] Speaker A: Correct. SB326 covers condominiums and buildings in common interest developments. Basically HOAS, also with three or more.
[00:10:08] Speaker B: Units attached, condos and HOAS deadline.
[00:10:11] Speaker A: And here is the massive difference. The deadline for SB326 was December 31, 2024.
[00:10:15] Speaker B: Wait, 2024 that jetline already passed.
[00:10:18] Speaker A: It already passed. And crucially, that deadline was not extended like the apartment one was.
[00:10:22] Speaker B: Wow.
So many HOAs might be out of compliance right now.
[00:10:26] Speaker A: Unfortunately, yes. A significant number are still scrambling to get compliant, and it's causing major issues.
[00:10:32] Speaker B: Okay, huge deadline difference. What about the inspection scope for condos? Is it also 15%?
[00:10:37] Speaker A: No, much more thorough. SB326 requires inspection inspections based on a statistically significant sample size, aiming for a 95% confidence rate. In practice, this usually means virtually all accessible EEs under the HOA's responsibility need to be inspected. It's much more comprehensive.
[00:10:54] Speaker B: 95% confidence? Yeah. Basically check everything. Who can do these inspections? Same list.
[00:10:59] Speaker A: No, much stricter. For condos only. Licensed structural engineers or licensed architects. No contractors or home inspectors allowed for SB326.
[00:11:08] Speaker B: Architects are engineers only. Okay. How often for condos?
[00:11:11] Speaker A: Every nine years for condos compared to six for apartments. And the report retention is longer to 18 years. Again covering two cycles and liability.
[00:11:19] Speaker B: In an HOA setting, can that get complicated?
[00:11:21] Speaker A: It can. It depends on the specific HOA's governing documents, you know, the CCNRs. Sometimes certain elements might technically be an individual owner's responsibility, but generally for efficiency and consistency, having The HOA manage one comprehensive inspection of all relevant EEs and is usually recommended saves costs and ensures uniformity.
[00:11:42] Speaker B: Okay, huge differences there, especially that condo deadline having passed.
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[00:12:28] Speaker B: Let's clarify exactly what counts as an exterior elevated element or ee.
You mentioned balconies, decks, but what are the specific criteria? I bet listeners are wondering if that walkway or porch on their property counts.
[00:12:41] Speaker A: That's a great question, because not everything qualifies. An EE under these laws has to meet all these conditions. First, it must be six feet or more above the ground.
[00:12:49] Speaker B: Six feet minimum height.
[00:12:50] Speaker A: Okay. Second, it needs to have a walking surface. It has to be designed or intended for people to walk on.
[00:12:55] Speaker B: So purely decorative things don't count.
[00:12:57] Speaker A: Exactly. Like those little Juliet, balconies are usually exempt because there's no Real walking surface. Third, it must rely at least partially on wood for its structural support or stability.
[00:13:08] Speaker B: Ah, wood framing is key. What if it's all metal and concrete?
[00:13:13] Speaker A: If an element is made completely of metal and concrete with no structural wood components, it's exempt from these specific laws and force. It has to be on the exterior of the building, meaning it's exposed to the weather, the elements.
[00:13:24] Speaker B: Okay, so six plus feet high walking surface relies on wood and and is outside. Common examples?
[00:13:32] Speaker A: Balconies, obviously. Walkways connecting parts of the building, elevated decks, porches that meet the criteria.
[00:13:38] Speaker B: And does the type of balcony matter? You hear terms like cantilevered sticking way out versus recessed, kind of tucked in. Do both need inspection?
[00:13:47] Speaker A: Yes, Great clarification. Both cantilevered balconies, the ones that you know, jut out dramatically with no visible support below, and recessed balconies, which are built within the main building structure. Both need inspection if they meet all those other criteria. Height, wood, walking surface, exterior.
[00:14:03] Speaker B: Okay, and you mentioned something about exposed versus enclosed. How does that affect the inspection?
[00:14:08] Speaker A: Right. This dictates the type of inspection needed. If the wood structure is exposed, meaning you can actually see the wood framing. A thorough visual inspection might be sufficient.
[00:14:19] Speaker B: Initially, you can see if it's rotting.
[00:14:21] Speaker A: Potentially, yes. But if the EE is enclosed, think of a balcony with stucco on the underside or siding covering the structure where you can't see the wood. And then a visual inspection isn't enough. Those require intrusive testing because the rot.
[00:14:36] Speaker B: Could be hidden inside.
[00:14:37] Speaker A: Exactly that. Hidden dry rot is the main danger these laws target. And remember, it has to be exterior. An interior walkway, even if elevated and using wood, isn't subject to SB721 or 326.
[00:14:50] Speaker B: So hidden wood rot is like the silent killer for these structures. Superficial checks aren't enough anymore. Before calling in the pros, though, are there any warning signs property owners or managers can look for themselves? Things that might scream potential problem here?
[00:15:04] Speaker A: Yes, absolutely. While professional inspection is required, owners and managers can definitely keep an eye out for warning signs. Look for any visible cracks in the stucco, wood or concrete elements. Obvious signs of rotting or decaying wood. Okay.
[00:15:16] Speaker B: Rust stains on stucco or concrete, especially below railings or where metal fasteners might be. That indicates water intrusion. Check if railings feel loose or unstable.
[00:15:26] Speaker A: Unstable railings? Yeah. That's a big one.
[00:15:28] Speaker B: Definitely.
And probably the biggest indicator of potential hidden problems is any sign of water staining or intrusion on the finishes, especially stucco soffits under balconies or decks. Water getting trapped is the Primary cause of dry rot in the wood you can't see. If you see water stains, you should be concerned.
[00:15:45] Speaker A: Okay, good tips. So let's say you see some signs or it's just time. For the inspection, you call in the licensed professional, the engineer or architect for condos, maybe a qualified contractor for apartments.
What actually happens during that inspection, especially for those enclosed elements? What does intrusive testing look like? Is it destructive?
[00:16:06] Speaker B: That's a common concern. So the inspection process is very specific, and it really underscores why intrusive testing is vital for enclosed ease. Like I said, something can look perfectly fine on the outside.
[00:16:16] Speaker A: Like that building with 20 balconies you mentioned earlier. Exactly. Looked fine visually. But intrusive testing found severe hidden rot.
So for intrusive testing, they don't rip everything apart. They typically drill small, strategic holes, maybe about the size of a nickel, into the underside or sides of the enclosed element.
[00:16:35] Speaker B: Okay.
[00:16:35] Speaker A: Small holes, yes. Then they insert a specialized tool called a borescope. It's basically a small, flexible camera on a cable, kind of like what doctors use for minimally invasive surgery.
[00:16:46] Speaker B: Ah, okay. A little camera probe.
[00:16:47] Speaker A: Right. It allows them to look inside the cavity and take detailed pictures of the internal wood framing, looking for any signs of moisture damage, dry rot, or corrosion of metal connectors. And the holes afterwards? Those small inspection holes are properly sealed, often with small plastic plugs or appropriate patching material to prevent future water intrusion. So it's minimally invasive, but gives crucial internal information.
[00:17:11] Speaker B: Got it.
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[00:17:44] Speaker B: Learn
[email protected] and a compliant report has specific requirements, too?
[00:17:50] Speaker A: Yes, absolutely. A report that meets the law's requirements has to include photos documenting the condition, especially any rot or corrosion found. It needs to be officially stamped and signed by the licensed professional who did the inspection. It has to identify all the EEs on the property, clearly state their current physical condition and remaining expected lifespan, and crucially, include recommendations for any needed repairs and future maintenance.
[00:18:14] Speaker B: Okay, so you get this detailed report back, hopefully with lots of pictures. What's the roadmap then? What happens if you get a clean bill of health? And more importantly, what if the report says you have problems?
[00:18:25] Speaker A: Right. The outcome dictates the next steps. If your EE's pass the inspection, great. You're in compliance for that cycle.
[00:18:31] Speaker B: What do you do then?
[00:18:32] Speaker A: You just need to keep that report safely on file for the required period. 12 years for apartments under SB721. 18 years for condos under SB326. The city or local enforcement agency will eventually ask to see it. Maybe during other inspections or if there's a complaint. No second inspection is needed after passing until the next cycle is due six or nine years later.
[00:18:54] Speaker B: Okay, passing is straightforward. What if you fail?
Let's assume it's not an immediate collapse danger, just needs repairs.
[00:19:02] Speaker A: Okay, if you have a non emergency failure, which is the more common scenario where repairs are needed but there isn't imminent danger, there's a specific timeline. The inspector must give you the owner or HOA the the report within 45 days of the inspection.
[00:19:18] Speaker B: 45 days for the report? Then what?
[00:19:20] Speaker A: Then you have 120 days from the date you receive the report to apply for any necessary permits for the repairs.
[00:19:26] Speaker B: Apply for permits within 120 days? That seems tight, especially if cities are backed up.
[00:19:31] Speaker A: It can be very tight. That's why starting the process early is key. Once you receive the approved permits from the city, you then have another 120 days to actually complete the repairs.
[00:19:40] Speaker B: Another 120 days for construction.
[00:19:42] Speaker A: Right. And that construction window can sometimes be extended by the local authorities up to 180 days if there are justifiable delays. But basically you're looking at roughly a one year timeline from the initial inspection report to having non emergency repairs fully completed and signed off.
[00:19:58] Speaker B: That sounds like a pretty complex process with multiple deadlines and dependencies, especially dealing with backed up city permit departments.
What's the most common mistake or pitfall owners run into during this repair phase? Where do things go wrong?
[00:20:13] Speaker A: A really common pitfall is underestimating the permit process itself. Or worse, trying to skip it for what seem like minor repairs.
[00:20:21] Speaker B: What about emergency failures? Is the timeline faster?
[00:20:23] Speaker A: Oh, much faster. If the inspector identifies an emergency condition posing immediate risk, they have to report it to the owner within 15 days and the owner must take immediate action. Like putting up shoring to support the structure or fencing it off to prevent access. Permit applications must be filed immediately and repairs have to start right away. Safety first, Right?
[00:20:45] Speaker B: So back to the permits for non emergency.
Why is skipping them such a bad idea?
[00:20:49] Speaker A: Because for almost any structural repair to an ee, permits are required by law. It's not Optional. The proper process involves having a licensed architect or engineer draw up detailed repair plans. Those plans get submitted to the city's.
[00:21:03] Speaker B: Building department and the city reviews them.
[00:21:05] Speaker A: Yes, they review them often ask for revisions or clarifications. There's usually some back and forth. Once the plans are approved, then a licensed contractor can pull the actual permit and perform the work exactly according to those approved plans.
[00:21:19] Speaker B: So it's a distinct three step process.
[00:21:21] Speaker A: Absolutely. Critical. Step one, inspection and report. Step two, engineering plans and city permits. Step three, permitted construction by a licensed contractor. Trying to shortcut this, like just hiring a handyman to patch something up. Without permits, that's when people get into big trouble.
[00:21:37] Speaker B: And the implications here sound massive because skipping steps, ignoring deadlines, or doing unpermitted work, it leads to some really severe consequences, doesn't it? Far beyond just a slap on the wrist, what are the real costs of non compliance?
[00:21:51] Speaker A: The consequences are genuinely severe and they hit on multiple fronts, financially and legally. We're seeing insurance companies refusing to renew policies or outright dropping coverage for non compliant buildings.
[00:22:01] Speaker B: Wow. Loss of insurance.
[00:22:03] Speaker A: Yes. And getting financing or refinancing becomes incredibly difficult, if not impossible for those HOAs that miss the SB326 deadline. Individual condo owners are finding they literally cannot sell their units because buyers can't get mortgages approved for a non compliant building. It freezes the market.
[00:22:21] Speaker B: That's devastating for owners.
[00:22:22] Speaker A: Yeah.
[00:22:22] Speaker B: What about direct city penalties?
[00:22:24] Speaker A: Cities have the authority to levy some hefty fines, often ranging from 100 to $500 per day until compliance is achieved. That adds up incredibly fast per ouch. And maybe the most frustrating consequence, if you do perform repairs but without the required permits, the city will eventually find out. They will likely reject the work entirely, issue a stop work order and force you to tear down the unpermitted repairs and start the entire process over again properly with plans and permits. All that time and money wasted.
[00:22:54] Speaker B: Tear it down and start over. Nightmare scenario.
[00:22:57] Speaker A: Complete nightmare. But ultimately, beyond all the financial and legal risks, the most important reason for compliance is safety. These lies exist because balconies and decks do fail and people get hurt or killed. A lawsuit resulting from an injury on your property due to a neglected EE will dwarf the cost of proactive inspection and repair. Complying isn't just about following the law. It's fundamental risk management and protecting people.
[00:23:20] Speaker B: Wow. Okay. We have covered a ton of ground today. I mean, from the complexities of tenant evictions under AB 1482 and SB 567, the new rules for security deposit photos positive credit reporting all the way to these critical life safety balcony laws, SB 721 and 326. For our listeners trying to digest all this, what would you say is the single most important takeaway, the one core message they need to remember?
[00:23:43] Speaker A: I think the core message is, well, it's that California real estate law isn't static. It's constantly evolving, generally towards more tenant protection and more owner responsibility, especially regarding safety.
So proactive understanding and really diligent compliance are absolutely essential. Now, you can't afford to be passive, staying informed and acting early on these deadlines and requirements. It isn't just about avoiding fines or lawsuits. It's fundamentally about protecting your investment, your asset, and most importantly, ensuring the safety of the people living in or using your properties. That's the bottom line.
[00:24:19] Speaker B: That's perfectly put, proactive understanding and diligent compliance. So here's a final thought for everyone listening. If an unexpected structural issue like hidden dry rot or maybe a seemingly minor legal misstep with a notice or a deposit could potentially lead to devastating financial and personal consequences, what hidden risks might still be lurking in your property portfolio right now? And how will you uncover them before they escalate into a crisis? This deep dive was designed to arm you with that vital information.
Now the next step is yours. Take what you've learned today and dive even deeper into your own property's specific compliance needs. Check those notices, review those ETs, get ahead of those deadlines. We'll be back soon with another deep dive.