Understanding SB 326
If you’re selling or buying a condo, townhome, or multi-unit property in California, there’s one law you can’t afford to ignore—SB 326, also known as the Balcony Inspection Law.
This law, which took effect in January 2020, requires Homeowners Associations (HOAs) of buildings with three or more units to inspect all Exterior Elevated Elements (EEEs)—balconies, decks, walkways, stairways, and railings—if they are made of wood or wood-based materials and are at least six feet above the ground.
SB 326 Key Requirements
Initial Inspection Deadline: January 1, 2025
Re-Inspection: Every 9 years thereafter
Inspectors: Licensed structural engineers, architects, or qualified contractors
Emergency Findings: Must be reported to local building officials within 15 days
Reserve Study Update: Report must be added to the HOA’s reserve study
Failure to comply can lead to financing delays, canceled escrows, legal liability, and costly special assessments.
How SB 326 Can Delay or Derail Escrow
As an escrow company in Woodland Hills and servicing all of Los Angeles and California, we are already seeing the impact of SB 326 on real estate transactions:
1. Financing Delays
Lenders often require proof of SB 326 compliance before approving a loan. Without the HOA’s inspection report, funding can be delayed or denied.
2. Buyer Hesitation
If the inspection reveals major repair needs or a 0–1 year remaining life expectancy on balconies or walkways, buyers may pull out or demand repairs before closing.
3. Unexpected Special Assessments
Buyers may inherit significant repair costs if the HOA needs to levy special assessments after escrow closes—something that can kill deals if not disclosed early.
What Sellers Should Do
If you’re selling a condo or townhome, protect your transaction by:
Requesting the HOA’s SB 326 inspection report before listing
Verifying whether any repairs are needed and if a plan is in place
Disclosing findings to buyers upfront to avoid surprises
Sharing documents with your escrow officer and lender early
How LCD Capital Escrow Helps You Navigate SB 326
At LCD Capital Escrow, we specialize in anticipating and solving compliance issues before they threaten your closing. As a trusted escrow company in Los Angeles, we:
Verify HOA compliance early in the transaction
Coordinate with lenders to meet funding requirements
Track and manage SB 326 documentation to prevent delays
Work with all parties to resolve potential obstacles before they become problems
Our team’s proactive approach ensures you have peace of mind and a smooth closing, whether you’re buying or selling in Woodland Hills, Los Angeles, or anywhere in California.
Final Thoughts
SB 326 is a vital safety law, but it can quickly become a deal breaker if not addressed early. By working with an experienced escrow company in Woodland Hills, Los Angeles that understands the law and how to navigate its requirements, you can keep your transaction on track and close on time.
Ready to protect your next deal?
Contact LCD Capital Escrow today to learn how we can help you navigate SB 326 compliance and close with confidence.