𝐍𝐞𝐰 𝐁𝐚𝐥𝐜𝐨𝐧𝐲 𝐒𝐚𝐟𝐞𝐭𝐲 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐋𝐚𝐰

𝐒𝐁 𝟒𝟏𝟎: 𝐖𝐡𝐚𝐭 𝐂𝐚𝐥𝐢𝐟𝐨𝐫𝐧𝐢𝐚 𝐌𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐊𝐧𝐨𝐰 𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐍𝐞𝐰 𝐁𝐚𝐥𝐜𝐨𝐧𝐲 𝐒𝐚𝐟𝐞𝐭𝐲 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐋𝐚𝐰

𝐓𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐜𝐲 𝐚𝐧𝐝 𝐒𝐚𝐟𝐞𝐭𝐲 𝐓𝐚𝐤𝐞 𝐂𝐞𝐧𝐭𝐞𝐫 𝐒𝐭𝐚𝐠𝐞

𝐉𝐚𝐧𝐮𝐚𝐫𝐲 𝟏, 𝟐𝟎𝟐𝟔, 𝐂𝐚𝐥𝐢𝐟𝐨𝐫𝐧𝐢𝐚 𝐒𝐞𝐧𝐚𝐭𝐞 𝐁𝐢𝐥𝐥 𝟒𝟏𝟎 (𝐒𝐁 𝟒𝟏𝟎)
will go into effect, adding new layers of 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬 and 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐬𝐚𝐟𝐞𝐭𝐲 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 for properties in 𝐜𝐨𝐦𝐦𝐨𝐧 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭𝐬 (𝐂𝐈𝐃𝐬) — 𝐬𝐮𝐜𝐡 𝐚𝐬 𝐜𝐨𝐧𝐝𝐨𝐦𝐢𝐧𝐢𝐮𝐦𝐬 𝐚𝐧𝐝 𝐭𝐨𝐰𝐧𝐡𝐨𝐦𝐞𝐬.

For 𝐥𝐞𝐧𝐝𝐞𝐫𝐬 𝐚𝐧𝐝 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐩𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬,, this means one thing: 𝐦𝐨𝐫𝐞 𝐝𝐨𝐜𝐮𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐭𝐡𝐞 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐚𝐧𝐝 𝐮𝐧𝐝𝐞𝐫𝐰𝐫𝐢𝐭𝐢𝐧𝐠 𝐩𝐫𝐨𝐜𝐞𝐬𝐬. 𝐒𝐁 𝟒𝟏𝟎 𝐛𝐮𝐢𝐥𝐝𝐬 𝐨𝐧 𝐒𝐁 𝟑𝟐𝟔, which first mandated balcony and exterior elevated element inspections after the 2015 Berkeley balcony collapse. The new law is designed to 𝐬𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐜𝐲 between homeowners, HOAs, buyers, and lenders by requiring that 𝐛𝐚𝐥𝐜𝐨𝐧𝐲 𝐢𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐫𝐞𝐩𝐨𝐫𝐭𝐬 𝐛𝐞 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐭𝐨 𝐛𝐮𝐲𝐞𝐫𝐬 — 𝐚𝐧𝐝 𝐛𝐲 𝐞𝐱𝐭𝐞𝐧𝐬𝐢𝐨𝐧, 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐝𝐮𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐥𝐨𝐚𝐧 𝐚𝐩𝐩𝐫𝐨𝐯𝐚𝐥 𝐩𝐫𝐨𝐜𝐞𝐬𝐬.

𝐊𝐞𝐲 𝐏𝐫𝐨𝐯𝐢𝐬𝐢𝐨𝐧𝐬 𝐨𝐟 𝐒𝐁 𝟒𝟏𝟎 𝐓𝐡𝐚𝐭 𝐀𝐟𝐟𝐞𝐜𝐭 𝐋𝐞𝐧𝐝𝐢𝐧𝐠

𝟏. 𝐌𝐚𝐧𝐝𝐚𝐭𝐨𝐫𝐲 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐟𝐨𝐫 𝐒𝐞𝐥𝐥𝐞𝐫𝐬 (𝐚𝐧𝐝 𝐈𝐦𝐩𝐥𝐢𝐜𝐢𝐭𝐥𝐲, 𝐋𝐞𝐧𝐝𝐞𝐫𝐬)
Under SB 410, 𝐬𝐞𝐥𝐥𝐞𝐫𝐬 𝐦𝐮𝐬𝐭 𝐩𝐫𝐨𝐯𝐢𝐝𝐞 𝐛𝐮𝐲𝐞𝐫𝐬 𝐰𝐢𝐭𝐡 𝐚 𝐜𝐨𝐩𝐲 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐫𝐞𝐜𝐞𝐧𝐭 𝐞𝐱𝐭𝐞𝐫𝐢𝐨𝐫 𝐞𝐥𝐞𝐯𝐚𝐭𝐞𝐝 𝐞𝐥𝐞𝐦𝐞𝐧𝐭 (𝐄𝐄𝐄) 𝐢𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐫𝐞𝐩𝐨𝐫𝐭 as part of their standard disclosure package.
– Lenders should 𝐚𝐧𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐫𝐞𝐜𝐞𝐢𝐯𝐢𝐧𝐠 𝐭𝐡𝐞𝐬𝐞 𝐫𝐞𝐩𝐨𝐫𝐭𝐬
during condo transactions.
– Underwriters may need to 𝐫𝐞𝐯𝐢𝐞𝐰 𝐢𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐟𝐢𝐧𝐝𝐢𝐧𝐠𝐬 to ensure no unresolved structural safety risks exist that could impact property value or insurability.

𝟐. 𝐈𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐑𝐞𝐩𝐨𝐫𝐭 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝𝐢𝐳𝐚𝐭𝐢𝐨𝐧
The inspection report must include on its 𝐟𝐢𝐫𝐬𝐭 𝐩𝐚𝐠𝐞:
– The 𝐧𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐮𝐧𝐢𝐭𝐬 𝐚𝐧𝐝 𝐞𝐥𝐞𝐯𝐚𝐭𝐞𝐝 𝐞𝐥𝐞𝐦𝐞𝐧𝐭𝐬 inspected
– Any 𝐜𝐨𝐦𝐩𝐨𝐧𝐞𝐧𝐭𝐬 𝐢𝐝𝐞𝐧𝐭𝐢𝐟𝐢𝐞𝐝 𝐚𝐬 𝐢𝐦𝐦𝐞𝐝𝐢𝐚𝐭𝐞 𝐬𝐚𝐟𝐞𝐭𝐲 𝐫𝐢𝐬𝐤𝐬
– 𝐈𝐧𝐬𝐩𝐞𝐜𝐭𝐨𝐫 𝐜𝐞𝐫𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 that a statistically significant sample of elevated elements was reviewed

For lenders, this creates 𝐚 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭 𝐫𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐟𝐨𝐫𝐦𝐚𝐭, simplifying document review and compliance checks.

3. 𝐇𝐎𝐀 𝐑𝐞𝐜𝐨𝐫𝐝 𝐀𝐜𝐜𝐞𝐬𝐬 𝐚𝐧𝐝 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲
SB 410 classifies these inspection reports as part of the 𝐚𝐬𝐬𝐨𝐜𝐢𝐚𝐭𝐢𝐨𝐧’𝐬 𝐨𝐟𝐟𝐢𝐜𝐢𝐚𝐥 𝐫𝐞𝐜𝐨𝐫𝐝𝐬, which must be made available to members for𝐭𝐰𝐨 𝐢𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐜𝐲𝐜𝐥𝐞𝐬

This ensures that HOAs cannot withhold information that might materially impact property condition or value — critical for 𝐥𝐨𝐚𝐧 𝐫𝐢𝐬𝐤 𝐚𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭 and 𝐫𝐞𝐬𝐚𝐥𝐞 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬.

𝐖𝐡𝐲 𝐒𝐁 𝟒𝟏𝟎 𝐌𝐚𝐭𝐭𝐞𝐫𝐬 𝐭𝐨 𝐌𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬

𝐅𝐨𝐫 𝐋𝐨𝐚𝐧 𝐎𝐟𝐟𝐢𝐜𝐞𝐫𝐬 & 𝐁𝐫𝐨𝐤𝐞𝐫𝐬:
Transparency leads to 𝐜𝐥𝐞𝐚𝐧𝐞𝐫 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 and 𝐫𝐞𝐝𝐮𝐜𝐞𝐝 𝐩𝐨𝐬𝐭-𝐜𝐥𝐨𝐬𝐞 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲. You’ll need to make sure your borrowers and seller partners understand the importance of timely inspection documentation — especially if they’re working with HOA-managed properties.

𝐅𝐨𝐫 𝐔𝐧𝐝𝐞𝐫𝐰𝐫𝐢𝐭𝐞𝐫𝐬:
Expect to see 𝐢𝐧𝐬𝐩𝐞𝐜𝐭𝐢𝐨𝐧 𝐫𝐞𝐩𝐨𝐫𝐭𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐞𝐝 with HOA documentation packages. If reports reveal “immediate safety risks,” underwriters may need to request 𝐩𝐫𝐨𝐨𝐟 𝐨𝐟 𝐫𝐞𝐩𝐚𝐢𝐫 or 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐜𝐥𝐞𝐚𝐫𝐚𝐧𝐜𝐞 before loan approval. This could affect both 𝐥𝐨𝐚𝐧 𝐜𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬 and 𝐟𝐮𝐧𝐝𝐢𝐧𝐠 𝐭𝐢𝐦𝐞𝐥𝐢𝐧𝐞𝐬.

𝐅𝐨𝐫 𝐀𝐩𝐩𝐫𝐚𝐢𝐬𝐞𝐫𝐬:
SB 410 provides verifiable, standardized inspection data that can enhance the 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐟 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐜𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧 𝐚𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭𝐬 — potentially influencing appraised value or cost-to-cure considerations.

𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐈𝐦𝐩𝐚𝐜𝐭𝐬

✅ 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞:
Lenders should confirm that SB 410 disclosures are included in escrow packages for condo sales.

✅ 𝐑𝐢𝐬𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭:
Structural safety issues discovered during inspection could affect collateral valuation, loan-to-value (LTV) ratios, or property eligibility for certain loan programs (particularly FHA or VA).

✅ 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 𝐓𝐢𝐦𝐞𝐥𝐢𝐧𝐞 𝐀𝐝𝐣𝐮𝐬𝐭𝐦𝐞𝐧𝐭𝐬:
Because inspection reports may introduce additional review steps, it’s wise to account for possible delays in underwriting and closing timelines.

✅ 𝐒𝐭𝐫𝐨𝐧𝐠𝐞𝐫 𝐁𝐨𝐫𝐫𝐨𝐰𝐞𝐫 𝐓𝐫𝐮𝐬𝐭:
By promoting transparency, SB 410 reduces the likelihood of undisclosed structural risks — helping lenders maintain credibility and compliance under fair lending and consumer protection regulations.

𝐁𝐞𝐬𝐭 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞𝐬 𝐟𝐨𝐫 𝐋𝐞𝐧𝐝𝐞𝐫𝐬 𝐚𝐧𝐝 𝐋𝐨𝐚𝐧 𝐎𝐟𝐟𝐢𝐜𝐞𝐫𝐬

– 𝐔𝐩𝐝𝐚𝐭𝐞 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐜𝐡𝐞𝐜𝐤𝐥𝐢𝐬𝐭𝐬 to include SB 410 compliance once the law takes effect.
– 𝐓𝐫𝐚𝐢𝐧 𝐬𝐭𝐚𝐟𝐟 𝐚𝐧𝐝 𝐫𝐞𝐚𝐥 𝐞𝐬𝐭𝐚𝐭𝐞 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬
on identifying and handling SB 410 reports during escrow.
– 𝐂𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐞 𝐰𝐢𝐭𝐡 𝐇𝐎𝐀𝐬 𝐚𝐧𝐝 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬
early in the process to avoid delays in obtaining inspection documentation.
– 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐞 𝐩𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞𝐥𝐲 𝐰𝐢𝐭𝐡 𝐛𝐨𝐫𝐫𝐨𝐰𝐞𝐫𝐬 about the purpose of these new reports and how they protect long-term property value.

𝐅𝐢𝐧𝐚𝐥 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲

SB 410 isn’t just about balcony safety — it’s about 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞 𝐢𝐧 𝐂𝐚𝐥𝐢𝐟𝐨𝐫𝐧𝐢𝐚’𝐬 𝐡𝐨𝐮𝐬𝐢𝐧𝐠 𝐦𝐚𝐫𝐤𝐞𝐭. For lenders, it’s another opportunity to 𝐬𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐜𝐲, 𝐦𝐢𝐭𝐢𝐠𝐚𝐭𝐞 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐫𝐢𝐬𝐤, 𝐚𝐧𝐝 𝐩𝐫𝐨𝐭𝐞𝐜𝐭 𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬 through responsible lending practices.

As the effective date of 𝐉𝐚𝐧𝐮𝐚𝐫𝐲 𝟏, 𝟐𝟎𝟐𝟔 approaches, mortgage professionals who prepare now will be best positioned to guide clients confidently through this new compliance landscape.