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From deadlines to repair costs and even your financing strategy, here’s everything you need to be aware of in light of the passage of SB 326.
Written by
HOA Loan Services
Published on
2
Nov
2025
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California has a clear and renewed focus on building safety, that, like so many that came before it, was born from heartbreak. In 2015, a balcony collapse in Berkeley claimed the lives of six students. This revealed a hidden (and all-too-common) danger: the quiet deterioration of balconies, decks, walkways, and other infrastructure in aging multi-unit buildings.
While these structures often look structurally sound from the outside, years of unnoticed water damage and dry rot are often lurking behind the scenes. To solve this issue, California’s Senate passed Bill 326 (SB 326) in an effort to make it easier for communities to take proactive action regardless of appearances and budgets.
Requiring professional inspections and ongoing maintenance, this law gives HOAs the resources to preserve their property values and, more importantly, uphold the safety of everyone who might call their community home.
If you're serving on an HOA board, you’ve likely already heard about SB 326, and perhaps felt nervous about what it might mean for your community’s budget.
And that anxiety is legitimate, as implementing and upholding this law will cost money. There’s no way around it.
However, understanding the intricacies of the law is your first step in putting your mind at ease. That’s exactly what we’ll do in this guide.
SB 326 requires mandatory structural inspections for condo and townhome communities. If you serve on the board of an HOA or condominium association, you need to understand that this bill marks a major step forward in community safety.
These regular inspections are needed for all Exterior Elevated Elements (EEEs), including balconies, decks, stairways, and walkways, with the goal of preventing full structural failures like the ones we saw in the devastating Berkeley collapse.
The law defines an EEE as a structure (any element that is exposed to weather and extends beyond the exterior walls of a building), as anything standing six feet tall or higher above the ground, or by material. Components relying on wood or wood-based materials for structural support are subject to mandatory inspections, though steel-framed structures are often included here, too.
Of course, thorough inspections like these are important for compliance, but also for protecting your neighbors and property values. Essentially, if your building contains balconies, exterior corridors, stairways, or decks of any kind, SB 326 applies to you.
These inspections generally range from $5000 to $25,000 (depending on the size of the property). However, the costs don’t always end there, as inspectors may find damage that needs fixing, and the repairs also fall under the purview of SB 326.
These could be as simple as a misplaced board here or there, or as costly as a full remodel. Given that the repairs for a single deteriorated balcony, the culprit in the tragedy that inspired the creation of the bill, can amount to $5,000 or more, it’s easy to see how the costs can add up (especially when multiplied across multiple units).
An SB 326 inspection isn’t just something that can be subcontracted out to the cheapest bidder. Under state law, only a licensed Structural Engineer (SE) or architect is legally qualified to conduct and certify an inspection. Your property manager, maintenance team, or general contractor, no matter how capable they might be, cannot sign off on this work.
Therefore, it’s important that you go about the process of selecting an inspector in a thoughtful way, rather than simply viewing it as checking off a box. You’ll want someone who will get things done right the first time, guaranteeing accuracy, accountability, and safety from the very start. These findings, after all, will shape the maintenance priorities and reserve planning of your community for the next decade, so you want to get it done right.
The process of an SB 326 inspection is more scientific and precise than many people assume. Inspectors must evaluate a statistically significant sample of your EEEs to achieve 95% confidence in their findings. The margin of error can be no greater than ±5%.
The simple translation of this is that they don’t need to test every single balcony in your building, but they do need to test enough of them to confidently assess your building’s overall health.
You can expect your inspector to use tools like borescope cameras, moisture meters, and other minimally intrusive methods so they can detect hidden decay, water intrusion, or rot. These might not always be visible to the naked eye, which is where specialized tools and tailored expertise become so important. Through these measurements, the goal is to catch problems early, ideally before they morph into major safety hazards or expensive repairs.
When the inspection is complete, your HOA will receive a formal, signed report that includes the following information:
As a volunteer board member, what you do with this report is one of the most important ways you can fulfill your fiduciary duty, so don’t just file this document away when you receive it.
Instead, keep it handy and use it as part of your future decision-making process. In addition, you are also legally responsible for presenting the results at an open board meeting and incorporating them into your HOA’s Reserve Study. That way, you can make sure your community’s long-term maintenance and financial decisions are based on real, data-driven insights, rather than guesswork.
SB 326 establishes a few different starting points for existing buildings and new construction. Regardless, don’t wait around for the deadline.
Be proactive if you want to protect yourself from serious legal and financial risks (and keep your community safe).
Indeed, the biggest mistake HOAs make is assuming there’s plenty of time to get these inspections (and subsequent repairs) wrapped up.
However, structural engineers and architects who are qualified to perform SB 326 inspections are already in high demand. The longer you wait around to book, the harder (and more expensive) the entire process gets. More worrisome, you risk falling out of compliance.
In general, for a new building, the inspection deadline is six years after the application was submitted, provided that the building permit was submitted after January 1, 2020. For existing buildings, the first deadline for an inspection was January 1, 2025.
Once the initial inspection has been completed, you can’t just continue on with business as usual. You’ll need to conduct ongoing inspections at a frequency predetermined by the state of California if you wish to remain in compliance. It may be helpful to frame SB 326 as a recurring health check-up for your buildings, rather than a one-off project.
Every nine years after the initial inspection, your HOA must repeat the SB 326 inspection process as described earlier in this article.
Again, each report must feed directly into your Reserve Study. This way, repair costs and remaining component lifespans will be built into your long-term financial plan, and safety and budgeting will be inherently linked in a smarter, more sustainable way. Because of this, you may find it helpful to align your inspection cycle with your Reserve Study updates to streamline planning and avoid unnecessary duplication.
Remember, your inspection report will become your roadmap for future planning, but don’t just wait until it’s convenient to schedule repairs. If the inspector identifies immediate safety hazards, the HOA needs to act swiftly to repair or restrict access to those areas.
In your report, any repairs will be categorized under two tracks: urgent hazards requiring prompt attention, or routine maintenance and longer-term repairs that can be budgeted for over time.
Paperwork is protection, especially for HOA management. After you receive your report, the board must review it at an open meeting and share a summary with all homeowners within 15 days.
After the meeting, keep every inspection report, repair invoice, and maintenance record for at least two inspection cycles (up to 18 years). If there is ever a dispute or claim, this paper trail will serve as your first line of defense.
The stakes of ignoring or neglecting SB 326 are very real for volunteer board members. Some of the most common consequences for doing so include:
The list goes on. In extreme cases, authorities can even prohibit the use of unsafe balconies or the entire building. Ignoring S 326 just doesn't make sense, especially when the repercussions are this severe.
Getting an SB 326 inspection is an important first step, but it’s not very useful if you don’t follow through on the repairs. After all, if you serve on your HOA board, you’re managing a multi-million dollar real estate asset that deserves the utmost attention.
With that said, financing those repairs is often easier said than done. Most SB 326 repairs cost far more than what a single year’s reserve contributions can handle.
Because of this, acting responsibly, and in accordance with your fiduciary duty, means you’ll need to find a sustainable funding path. This needs to be one that balances safety, financial stability, and perhaps most importantly, homeowner trust.
A one-time special assessment can annihilate your homeowners’ finances. If you’re asking each unit to suddenly pay $5000 to $20,000 for an unexpected repair, you’re opening the door to a medley of unwanted consequences, including:
In turning directly to homeowners to foot the bill, you’ve met your legal duty for safety, sure. But at what emotional and social cost?
There’s a strategic case to be made for HOA loans, a form of good debt that can be weighed in the face of a six- or seven-figure repair bill.
They turn that massive, one-time expense into a predictable monthly cost that is now folded into their regular dues. Now, homeowners can budget. The board can still demonstrate its fiscal responsibility. And the community is avoiding an all-out financial panic.
Most HOA boards now see HOA loans as good debt because they preserve liquidity. You aren’t draining your reserves dry, instead keeping cash available for future emergencies like water main breaks or insurance increases. You’re also protecting property values, since prompt repairs prevent small issues from becoming large, value-destroying problems.
And with inflation, cash in your reserves today is often worth more than what you’ll repay gradually over time. Using a loan strategically can actually protect your long-term purchasing power and be an integral component in your money management.
Not all lenders understand HOA, and that’s an important distinction to make. You want a specialized financing partner who truly understands community association law and finances, not just some random bank down the road.
As you're shopping around for the right lender, be sure to find one that is experienced with SB 326 and the Davis-Stirling Act, rather than just generic commercial loans.
Look for one with a reputation for offering transparent guidance, not just a sales pitch for one product. After all, you deserve unbiased advice that matches your community’s structure and goals.
Your partner should be just that: a partner, someone who can help you compare the long-term impact of a loan versus a special assessment. That way, you can confidently explain your decision to homeowners. If you’re in the market for an HOA-specific lender, consider HOA Loan Services. We'll provide you with access to experts who speak your language and can help you secure fair terms, clear projections, and the right financing plan for your community.
SB 326 repairs are unavoidable, but financial strain doesn't have to be. Strong leadership looks like protecting safety, property values, and financial health all at once, and choosing a well-structured HOA loan could be just what you need to demonstrate it.
Not only will you be funding essential repairs to keep your community safe, but you’ll be doing so while protecting homeowners from financial shock and preserving reserves for future needs. This will strengthen your long-term property values and stability, allowing you to turn a challenging mandate into an opportunity for smart, equitable governance.
You know that SB 326 inspections are required. And you also know that repairs (often expensive ones) are likely. But when that repair bill arrives, remember the power of strategic financial planning, and give HOA Loan Services a call.
Our team is here to help. Reach out to one of our specialists today and we will be happy to help you walk through the process of obtaining an HOA loan for your community.
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