You volunteered for the board. You show up to the meetings. You vote on the budget, review the financials, and try to do right by your community. You are not a structural engineer. You are not a lawyer. You are a homeowner who agreed to help manage a shared property.

SB 326 does not care about any of that.

California's balcony inspection law — Senate Bill 326, effective January 1, 2020, with an initial inspection deadline of January 1, 2025 — created a specific, documented, and legally enforceable obligation for condominium associations and their governing boards to inspect and maintain exterior elevated elements. Balconies. Decks. Stairways. Elevated walkways. The railings attached to all of them.

When that obligation is not met — when the inspection doesn't happen, when the findings aren't acted on, when the repair timeline lapses — the liability does not sit abstractly with "the HOA." It sits with the people who govern the HOA. The people who received the notices. The people who attended the meetings where the inspection was discussed and deferred. The people whose names are on the board resolution that approved a budget that didn't include the inspection.

It sits with you.

Here is exactly what SB 326 makes HOA board members personally liable for — and what acting now actually protects.

What SB 326 Requires — And Why "We Didn't Know" Is Not a Defense

SB 326 mandates that common interest developments — condominiums, planned unit developments, and other HOA-governed properties — with three or more multifamily units inspect all exterior elevated elements every six years. The inspection must be performed by a licensed structural engineer or architect. It must include a written report documenting the current condition of each element, identifying any immediate safety hazards, and recommending repairs where conditions warrant.

The initial inspection deadline was January 1, 2025. For associations that have not completed that inspection, the deadline has already passed. The law is not in a grace period. Enforcement mechanisms are active.

Here is the specific provision that creates personal board member exposure: California Civil Code Section 5551 places the inspection obligation on the association — but association governance obligations under the Davis-Stirling Common Interest Development Act place the duty to act on the board. When the board has actual or constructive knowledge of an obligation — and SB 326 is a statutory obligation that every HOA board in California with applicable property is presumed to know — failure to act on that obligation is a breach of the board's fiduciary duty.

Fiduciary duty breach is not an HOA problem. It is a personal problem. It attaches to the individual board members who had the authority and the obligation to act.

The Three Fiduciary Duties SB 326 Activates — and How Each One Creates Personal Exposure

California law imposes three fiduciary duties on HOA board members: the duty of care, the duty of loyalty, and the duty to act within the scope of the board's authority. SB 326 activates all three — and the failure modes for each one are distinct.

The Duty of Care

The duty of care requires board members to act with the care that an ordinarily prudent person in a similar position would exercise under similar circumstances. In the context of SB 326, this means a board member exercising ordinary prudence would know about the law, understand its requirements, initiate the inspection process, act on findings within the statutory timelines, and maintain documentation of every step.

A board member who attended meetings where SB 326 was mentioned, voted to defer the inspection for budget reasons, and took no further action to ensure compliance has not acted with ordinary prudence. They have breached the duty of care — not because they are malicious, but because they failed to do what the law required them to do as fiduciaries.

The exposure from a duty of care breach is civil liability for damages that result from the breach. If a balcony fails and someone is injured, and the investigation reveals that the HOA never conducted the SB 326 inspection that would have identified the structural deficiency, the board members who governed during the period of non-compliance are directly in the chain of liability — not just the HOA as an entity.

The Duty of Loyalty

The duty of loyalty requires board members to act in the best interest of the association and its members — not in the interest of any individual or faction, and not in the interest of deferring difficult decisions to avoid short-term conflict.

Deferring an SB 326 inspection to avoid a special assessment conversation, to preserve a budget surplus, or because a vocal faction of homeowners objects to the cost is a breach of the duty of loyalty. The board is not acting in the association's best interest by deferring a statutory obligation. It is acting to avoid conflict — which is precisely what the duty of loyalty prohibits.

The Business Judgment Rule — and Why It Doesn't Protect You Here

Board members who are familiar with HOA governance law sometimes invoke the business judgment rule as a shield — the legal doctrine that protects board members from liability for reasonable business decisions made in good faith. It is a real protection. It does not apply here.

The business judgment rule protects discretionary decisions — choices among reasonable alternatives that involve genuine business judgment. It does not protect failures to act on statutory obligations. A board that fails to conduct a mandated SB 326 inspection has not made a business judgment. It has failed to perform a legal requirement. The business judgment rule has no application to that failure, and board members who believe it does are relying on a legal protection that will not be there when they need it.

What Happens When a Balcony Fails and the Inspection Never Happened

This is not a hypothetical scenario. Balcony failures in California — at Berkeley in 2015, at multiple properties across the state since — have established the legal and investigative template for what happens after a structural failure on an exterior elevated element.

The sequence is predictable. The failure occurs. Emergency responders arrive. The property is secured. Within days, the investigation begins — and the investigation is not limited to the physical cause of the failure. It extends to the governance record of the association.

Investigators will pull the HOA's meeting minutes for the past six years. They will look for any discussion of the exterior elevated elements — any mention of balcony conditions, any board discussion of inspection requirements, any agenda item related to SB 326. They will subpoena the association's financial records and look for budget line items — or the absence of them — related to structural inspection and maintenance. They will review correspondence between board members and management companies, looking for evidence of known conditions that were not acted on.

What they are building is a documented record of what the board knew, when they knew it, and what they chose to do about it. In the context of a personal injury or wrongful death claim, that record is the foundation of the liability case against the individual board members whose names appear in the minutes.

Board members who authorized the inspection, received and acted on findings, and documented their decision-making throughout the process are protected. Board members whose names appear in minutes that discuss deferral, delay, or budget constraints as reasons for non-compliance are not.

The difference between those two outcomes is not the structural condition of the balcony. It is whether the board performed its statutory duty under SB 326.

The D&O Insurance Problem Nobody Talks About

Most HOA board members assume that their association's Directors and Officers insurance policy protects them personally from the consequences of board decisions. In many circumstances, that assumption is correct. In the context of SB 326 non-compliance, it is dangerously incomplete.

D&O policies cover board members for claims arising from wrongful acts in their capacity as directors or officers — decisions made in good faith, within the scope of their authority, that nonetheless result in harm. They typically contain specific exclusions for intentional misconduct, fraud, and — critically — knowing violations of statute.

A board that received written notice of SB 326's requirements, discussed them in board meetings, and chose not to comply has documented knowledge of the statutory obligation. A claim arising from that non-compliance may be characterized by the insurer as a knowing statutory violation — which falls within the policy exclusion rather than the coverage grant.

D&O coverage that excludes the exact claim you're facing is not protection. It is a false sense of security that delays the moment when you understand your personal exposure — and that moment tends to arrive at the worst possible time.

Before relying on D&O coverage as a reason not to prioritize SB 326 compliance, the board should request a written coverage opinion from the association's insurance counsel specifically addressing SB 326 non-compliance scenarios. That opinion will either confirm the coverage or identify the gap — either way, it is information the board needs before making decisions about inspection timing.

The Special Assessment Conversation Nobody Wants to Have — and Why Deferring It Is More Expensive

The most common reason HOA boards defer SB 326 compliance is the cost conversation. An engineering inspection costs money. Repairs, if findings warrant them, cost significantly more. Funding those costs may require a special assessment — a per-unit charge to homeowners that is politically unpopular, that generates conflict at board meetings, and that board members would rather avoid.

The cost of deferral is not zero. It is higher than the cost of compliance — in every scenario where the deferral produces an adverse outcome.

A balcony failure that injures a resident or guest generates a claim against the association — and potentially against individual board members — that will exceed the cost of the inspection and repair by orders of magnitude. The association's master liability policy will respond to the claim, but the premium consequences of a major structural liability claim — and the potential for coverage disputes around the non-compliance issue — can financially destabilize an association for years.

A special assessment for SB 326 compliance is a defined cost. The board controls the scope, the timing, and the communication. It can be planned, budgeted, and explained to homeowners in terms that connect the cost to the legal obligation and the personal liability protection it provides.

The liability exposure from non-compliance is an undefined cost. It materializes without warning, at a time not of the board's choosing, in an amount determined by the severity of the outcome — not by what was in the reserve fund.

The board that has the special assessment conversation is making a fiduciary decision. The board that avoids it to preserve harmony is making a fiduciary breach.

What Board Members Should Have in the Meeting Minutes Right Now

If your association has not completed its SB 326 inspection, the most important immediate action is not just scheduling the inspection — it is documenting, in the board meeting minutes, the board's awareness of the obligation, its decision-making process, and its commitment to a specific compliance timeline.

Meeting minutes are the governance record. They are what investigators, plaintiffs' attorneys, and courts look at to establish what the board knew and what they decided. Minutes that show a board actively engaged with its SB 326 obligations — that identify the law, the deadline, the cost, the proposed timeline, and the board's resolution to proceed — establish a good-faith record that supports a business judgment defense.

Minutes that show a board discussing SB 326 and voting to defer to the next budget cycle — without a specific timeline, without a documented rationale, and without a follow-up resolution — establish a record of deliberate non-compliance that will not survive scrutiny in a subsequent liability proceeding.

The board resolution that authorizes the SB 326 inspection engagement should be in the minutes at the next meeting. Not discussed. Not tabled for further review. Authorized.

Why the Firm You Hire for SB 326 Matters as Much as Whether You Hire One

Not all SB 326 inspections are equal. The law requires a licensed structural engineer or architect — but the quality of the inspection, the completeness of the written report, and the engineering credibility of the findings vary significantly between firms.

An inspection report that does not identify conditions that a subsequent failure reveals were present is a document that works against the board — not for it. It shows that an inspection was performed but failed to find what was there. The question of why becomes a litigation issue.

An inspection performed by a licensed structural engineer with in-house repair capability — who uses non-destructive borescope assessment to see inside structural cavities, who produces a written report with specific findings and specific repair recommendations, and who stands behind the findings with professional engineering credentials — produces a document that protects the board.

When findings require repair, the board's obligation is to act on those findings within the statutory timeline. The firm that performed the inspection and the firm that performs the repair need to have continuity — the same engineer of record overseeing both the finding and the remediation, producing the certification that closes the compliance loop.

SKS Construction manages SB 326 compliance for HOA boards across Los Angeles County — from initial borescope inspection through repair scope, permit, construction, and engineer certification of completion. Our in-house licensed structural engineers produce inspection reports that meet the SB 326 statutory requirements, identify findings with specificity, and provide a clear repair pathway for every condition identified. When repair is required, we transition directly to the repair scope under the same contract, with the same engineer of record, without the hand-off gap that creates compliance and documentation problems.

We understand that board members are volunteers making difficult decisions with limited technical expertise and significant personal exposure. Our job is to give you the technical foundation to make those decisions confidently — and the documentation to prove you made them responsibly.

Get a FREE SB 326 Consultation for Your HOA — Protect Yourself and Your Community

SKS Construction offers FREE SB 326 inspection consultations for HOA boards and property managers across Los Angeles County. Our in-house licensed structural engineer will explain the inspection process, the finding documentation requirements, the repair timeline obligations, and the certification pathway that closes the compliance loop — in plain language, without engineering jargon.

We will provide a fixed-price inspection proposal and, where findings warrant, a fixed-price repair proposal — so the board can make its special assessment decision with a defined cost, not an open-ended estimate.

Call (818) 855-1181 or email info@sksconstruction.com to schedule your FREE SB 326 consultation today.

You volunteered to protect your community. SB 326 defines what that protection requires. We help you deliver it — completely, documentably, and on time.