Important Notice for Buyers and Sellers of Condominiums: SB 326 Inspections
If you are buying or selling a condo, this is crucial. Starting January 1, 2025, lenders will require that the Homeowners Association (HOA) complete an SB 326 inspection before approving financing.
What is SB 326?
• Known as the “Balcony Bill,” SB 326 is a California law requiring a structural engineer or architect to inspect balconies, decks, and other exterior elevated elements for safety.
• Lenders now require this inspection unless the balcony is less than 7 feet.
• If the buyer is paying cash, this is not an issue. Financing is where it becomes critical.
Note for Sellers:
• Contact your HOA and ask for a copy of the SB 326 inspection.
• Share the report with your preferred lender to review for any high-priority items.
• Lenders focus on high-priority issues; minor items are generally not a problem.
• Even if an issue exists in a neighbor’s unit, it can affect your buyer’s loan approval.
Note for Buyers:
• Check before escrow: Ask the agent if an SB 326 inspection exists.
• Share the inspection report with your lender for review.
• Lenders may also request HOA meeting minutes to verify high-priority items are being addressed.
• Be cautious when removing your loan contingency in a multiple-offer situation. If the condo fails SB 326 requirements, you could risk losing your earnest money, even if you’re fully qualified for the loan.
SB-326 inspections are mandatory for financed condos after January 1, 2025, so sellers should obtain and share the report early, buyers should verify it before making offers or waiving contingencies, and proper planning can prevent delays, surprises, and financial risk. This is a very serious topic, and you need to pay attention to this before you do that.
So that’s why as agents, we do not recommend you to remove loan contingency. Find out if your HOA has performed SB 326 inspection before selling. Call me to help you! 858-345-0685.
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
