Why Associations Should Embrace SB 721

Requiring Deck Inspections

Opinion by Bill Leys

I would like to provide a different look at SB 721 Contractors-Inspections of Decks & Balconies that the Community Legislative Action Committee (CLAC), the lobbying arm of Community Associations Institute, is now mustering its members to oppose and why this bill may actually benefit multi-family housing, including CID’s.

You may, or may not know that this bill has come about because of the parents of the six dead and seven seriously injured Irish students who were on a balcony in an apartment building when it collapsed. At the time of this opinion, the builder has settled claims with the families and while the settlement is confidential, experts estimate the payouts by insurance carriers was around twenty million dollars. Now imagine if a deck at your Association fell and what the costs of settling that might be vs the costs of an inspection of your decks.

Allow me to first present my qualifications to opine on this bill and the subject;

• I was a Certified Manager of Community Associations (CMCA) pin # 3545 by the Community Associations Institute’s NBC-CAM (pin # 3545) and managed the business affairs of 20+ Common Interest Developments (CID’s) while I was employed  for three years as a CID manager for Manderley Property Services in San Luis Obispo. Much of my work obtaining bids on behalf of clients centered on the decks the Association was responsible for.
• I managed and provided sales and estimating services for waterproofing of decks, stairs  and walkways for several companies that marketed to CID’s and apartment owners and managers for 8 years.
• I owned a waterproofing company that sold and marketed to a wide variety of clients including Common Interest Developments and apartment owners and managers.
• I now work as a consultant and inspector, specifically decks. I inspect wood, composite and waterproof decks for CID clients, buyers of real estate.
• I have as an estimator, consultant and deck inspector, personally inspected thousands of decks.  
• I have written numerous articles on the subject of decks, building & waterproofing them, maintaining them and repairing decks, being published by CAI chapters, ECHO, APRA and other periodicals.

CLAC is arguing against the bill that would require Associations to undertake performing inspections of their exterior elevated elements (EEE) balconies/decks/stairs/walkways. They argue that the costs of such inspections will be shouldered by the owners. They are correct in saying that, it will. On a dollar level though, spread out over 3 years of dues, it would probably be only a few dollars per month, depending on the number of units.

CLAC is also arguing that reserve study specialists already examine their buildings every 3 years and that Associations plan and implement repair programs based on that .I agree, reserve specialists do onsite inspections of your Association’s common areas and exclusive use common areas.

However, CLAC does not tell you that while Associations are required to perform reserve studies, they are not required to fund, partially or fully, the estimated future costs of repairs and replacement of the building components that are included in that study. See the CA Department of Real Estate Reserve Study Guidelines booklet on the subject of reserve studies here http://www.dre.ca.gov/files/pdf/re25.pdf

As a CID manager and as a sales person/estimator, my personal experience has been one quite different than what CLAC would have you believe reserve specialists do when doing an onsite inspection.

CLAC’s biggest red herring in their letter of objections is that they say Associations must plan and budget for repairs and maintenance. While true, it’s what they won’t tell you that I find most telling. According to the Standards of Practice set out by the Association of Professional Reserve Analysts, reserve study physical inspections EXCLUDE the following-

• Systems or components of a building, or portions thereof, which are not Readily Accessible…
• Determining compliance with manufacturers’ installation guidelines or specifications, building codes…
• Structural, architectural, forensic…inspections.
• Conditions related to animals, insects, or other organisms, including fungus and mold, and any hazardous, illegal, or controlled substance, or the damage or health risks arising there from.
• Water testing any building, system, or component…
• Specifying repairs/replacement procedures or estimating cost to correct.

Reserve studies also do not inspect for construction defects-from the Standards of Practice Physical Analysis “In general, construction defects, acts of God, environmental hazards, future code changes, and unpredictable events shall not be considered. The Reserve Analyst will assume that the Reserve Components have been properly built and installed.”

In short, reserve studies will not provide the necessary detailed inspections required to determine of a deck or balcony has defects, is waterproof, meets the manufacturer’s requirements when built. A qualified deck inspector will be doing what reserve specialists do not, finding defects and adverse conditions that could lead to a failure!

Very often, when I was managing Associations, my Boards of Directors, against their reserve specialists, management and counsels advice, made business decisions to not fully fund their reserves as they “didn’t want to raise the dues” . That head in sand approach often resulted in huge, financially crippling to homeowners, emergency special assessments being declared to repair decks and the surrounding building materials.

It is my opinion that SB-721 will actually enhance reserve studies with detailed data on the decks and balconies actual condition, along with the contiguous building materials condition.  Reserve Studies could then use this data to improve their calculations of estimated remaining useful life and map out specific plans for maintenance and repairs.

Most significantly and very likely to happen, is a deck inspection will identify construction defects earlier, allowing Boards to take action sooner before significant hidden damages occur that require massive capital to repair. Early identification of deck issues and possible defects allows the BOD to submit claims to their builder for repairs under SB-800.

Now builders won’t like this and they are rallying to get this bill defeated.

Unfortunately our  construction industry is rife with construction defects; despite builders always insisting that they are working towards eliminating them, I continually see new buildings going up with defects built into them. Performing inspections early in a buildings life will identify defects and should begin to force builders to pay more attention to improve by building quality construction rather than just focusing on their bottom line profit and leaving the problems for their liability insurance carriers to deal with. One builder in writing actually said their goal was to “get out ten years” the statute of limitations on being sued for construction defects in California. Wow, there’s high standards for you.

The balcony that fell at Berkeley wasn’t an accident; it was a deadly combination of bad design, bad execution of that design and failing to inspect and maintain. This will continue to occur until/unless action is taken to require inspections.

My current profession is inspecting decks for buyers of real property, CID’s and apartments and consulting with attorney’s, contractors and deck owners. In the years I’ve been inspecting decks, I have found that many decks in CID’s, apartment communities and single family housing have issues that require repairs or replacement.

I urge you to get behind SB-721 to help improve construction and to not be swayed by the cost of money over the cost of six dead students who should still be alive today.

Please feel free to reproduce this opinion. I especially invite CACM, CAI, ECHO & CAI-CLAC to publish alternate opinions to their readers and I welcome being invited to debate on the subject.

Bill Leys