California has a long tradition of expanding disclosure obligations on residential property owners — incrementally, legislatively, and in ways that consistently move the burden of structural and safety information from the buyer or tenant to the seller or landlord. AB 2721 is the most recent significant entry in that tradition, and it has direct implications for every multifamily property owner in Los Angeles who has a soft-story building, a pending retrofit obligation, or a recently completed retrofit that isn't fully documented.

The law is not widely discussed outside of real estate law circles and housing policy forums. Most property owners haven't heard of it. Most property managers are not yet advising their clients about it. And most landlords who will be affected by its requirements are currently operating without the documentation infrastructure that compliance will require.

That gap — between what the law now requires and what most owners currently have — is the opportunity and the risk that this post addresses.

Here is what AB 2721 does, what it requires of landlords in Los Angeles and surrounding cities, and why the paper trail that SKS Construction produces on every retrofit project is not just a compliance record — it is a direct asset under the new disclosure framework.

What AB 2721 Actually Does — The Legislative Framework

AB 2721 — signed into California law and effective January 1, 2025 — expands the disclosure obligations of residential property owners in two specific contexts: at the point of lease execution with new tenants and at the point of sale or transfer of the property.

The core provision: owners of residential buildings subject to a local mandatory seismic retrofit ordinance must disclose the retrofit compliance status of the building — both to prospective tenants before lease execution and to prospective buyers as part of the transfer disclosure process. The disclosure must state whether the building is subject to a mandatory retrofit ordinance, whether the retrofit has been completed, and if completed, must provide documentation of the completed retrofit including the permit number and the compliance certification.

This is a material expansion of the existing disclosure framework. Prior to AB 2721, retrofit compliance status was a factor that sophisticated buyers and their attorneys might identify through independent due diligence — pulling the permit history, reviewing city compliance records, checking for recorded compliance orders. It was not a mandated disclosure item that the seller or landlord was affirmatively required to surface and document.

AB 2721 makes the disclosure affirmative and mandatory. The seller or landlord cannot wait for the buyer or tenant to discover the compliance status through their own investigation. They must proactively disclose it — accurately, completely, and with documentation that supports the disclosure.

The Two Disclosure Contexts — Lease and Sale

AB 2721 operates differently in the lease context and the sale context, and understanding both is important for property owners whose buildings are subject to mandatory retrofit ordinances.

The Lease Disclosure Requirement

For residential lease transactions — new leases, lease renewals where material terms are being renegotiated, and in some interpretations any new lease addendum that constitutes a material modification — the landlord must disclose the building's retrofit compliance status to the prospective tenant before the lease is executed.

The disclosure is not a cursory mention in a lease rider. It is a specific, documented disclosure that must identify whether the building is subject to a mandatory retrofit ordinance, whether the ordinance deadline has passed, whether the retrofit has been completed, and if completed, the permit and compliance documentation that establishes the completion.

For non-compliant buildings — buildings subject to the ordinance that have not completed the retrofit — the disclosure requires the landlord to inform the prospective tenant of the building's non-compliant status and the applicable deadline. This is a disclosure that many tenants will respond to by choosing a different building — which is precisely the point of the requirement from a policy perspective. The legislature has decided that tenants have a right to know the seismic compliance status of the building they are about to live in.

For compliant buildings — buildings where the retrofit has been completed and certified — the disclosure requires documentation of the completion: the permit number, the Certificate of Compliance, and in some interpretations the engineering certification. A landlord who says "the retrofit is done" without documentary support is not satisfying the AB 2721 disclosure requirement. The documentation is the disclosure.

The Sale Disclosure Requirement

For property sales and transfers, AB 2721 adds retrofit compliance status to the category of material facts that must be disclosed in the Transfer Disclosure Statement — the standardized disclosure document that California law requires sellers to complete as part of every residential real estate transaction.

The Transfer Disclosure Statement already requires disclosure of known material defects — conditions that affect the value or desirability of the property and that a buyer would want to know. AB 2721 specifically adds retrofit compliance status as a required disclosure item, removing any ambiguity about whether non-compliance is a material fact that must be disclosed.

For sellers, this means the retrofit compliance status appears on the TDS — a document that is reviewed by the buyer, the buyer's attorney, the buyer's lender, and the escrow officer. Non-compliance is disclosed to every party in the transaction who has any stake in the property's condition. The buyer's ability to negotiate a price adjustment based on the non-compliance is enhanced by the formal disclosure — because the disclosure creates a documented record of what the seller knew and disclosed.

For completed retrofits, the TDS disclosure requires supporting documentation — the permit, the Certificate of Compliance, the engineer's certification. A TDS that states the retrofit is complete without documentation supporting that statement is an incomplete disclosure — and an incomplete disclosure that later turns out to be inaccurate is a misrepresentation claim.

Why the Documentation Requirement Is More Demanding Than It Appears

The surface reading of AB 2721 is that it requires disclosure of a yes/no status: is the building compliant or not? That reading understates the documentation requirement embedded in the law.

AB 2721 does not just require the landlord or seller to state that the retrofit is complete. It requires the landlord or seller to document that the retrofit is complete — with records that an independent reviewer could verify. The permit number must be real and must resolve to an actual finaled permit when looked up in the LADBS database. The Certificate of Compliance must be an actual document issued by the city, not a self-generated compliance statement. The engineering certification must be a stamped letter from a licensed structural engineer, not a contractor's invoice.

This documentation requirement has a specific implication for property owners whose retrofits were performed by contractors who did not complete the permit process — contractors who performed the physical construction but did not obtain the final inspection sign-off, did not pursue the Certificate of Compliance, and did not provide the owner with engineering certification documentation.

Those owners cannot satisfy the AB 2721 disclosure requirement. They cannot document what they cannot produce. And the consequence of failing to satisfy the disclosure requirement — or of making a disclosure that turns out to be unsupported by the documentation — is a misrepresentation or non-disclosure claim that can survive the transaction for years.

The path to compliance for these owners involves either obtaining retroactive documentation of the completed retrofit — which requires re-engaging a licensed engineer, verifying the installed work, producing as-built drawings, and pursuing the Certificate of Compliance through LADBS — or disclosing the retrofit as incomplete and accepting the transaction consequences of that disclosure.

The Tenant Implication — What Disclosure Means for the Rental Market

The lease disclosure requirement in AB 2721 has a practical consequence for the rental market that goes beyond legal compliance: it makes retrofit non-compliance visible to tenants in a way it has never been before.

Prior to AB 2721, a tenant who didn't investigate the building's compliance status — which was most tenants — had no way of knowing whether the building they were signing a lease in was a compliant soft-story structure or a non-compliant one. The compliance status was a fact that existed in the city's records but that required active investigation to surface.

AB 2721 brings the compliance status to the lease table. The tenant sees it. The tenant can ask questions about it. The tenant can use it as a factor in the leasing decision. And the tenant who executes a lease after receiving a non-compliance disclosure has a documented record that they were informed of the non-compliant status — which affects subsequent habitability claims, relocation claims, and other tenant remedy proceedings differently than the pre-AB 2721 environment where the non-compliance was not formally disclosed.

For property owners in the competitive Los Angeles rental market, the lease disclosure requirement creates a direct connection between retrofit compliance status and tenant acquisition. A compliant building with documented retrofit completion can disclose a positive compliance status — a disclosure that becomes a marketing point in a market where tenants are increasingly aware of seismic safety as a factor in the leasing decision. A non-compliant building must disclose its non-compliant status — a disclosure that will deter quality tenants who have alternative options.

The Interaction with AB 1482 and RSO Tenant Protections

AB 2721's lease disclosure requirement intersects with AB 1482 and the Los Angeles Rent Stabilization Ordinance in a specific way that property owners need to understand: tenants who receive an AB 2721 non-compliance disclosure at lease execution are tenants who have been formally informed of a known building deficiency. That formal disclosure has potential implications for subsequent habitability-based rent withholding claims, Ellis Act eviction proceedings, and relocation assistance calculations.

The specific intersection depends on the applicable tenant protection framework — whether the unit is covered by AB 1482, the LA RSO, or neither — and on the specific circumstances of any subsequent tenant remedy proceeding. The general principle is that a formally disclosed non-compliant condition is in a different legal category than an undisclosed one: the tenant who knew about the non-compliance when they signed the lease is in a different position than the tenant who discovered it afterward.

This is not a recommendation to disclose non-compliance as a strategy for limiting tenant remedy rights. It is a recognition that the AB 2721 disclosure framework creates a documented record of what the landlord disclosed and when — a record that affects the legal landscape of every subsequent tenant interaction on the property.

Property owners whose buildings are non-compliant should consult with a qualified landlord-tenant attorney about the interaction between AB 2721 disclosure obligations and the applicable tenant protection framework for their specific units before executing any new leases. The disclosure obligation is not optional — but the strategy for managing its implications is a legal question that requires professional guidance.

What the AB 2721 Documentation Requirement Means for Buildings Completed by Other Contractors

This is the scenario that creates the most urgent documentation problem under AB 2721: the building where the physical retrofit was completed by a contractor who didn't produce the documentation that AB 2721 requires.

The retrofit was done. The steel is in the garage. The moment frames are behind the drywall. But the finaled permit isn't in the owner's files. The Certificate of Compliance was never issued or never obtained. The engineering certification letter was never produced. And now the owner is facing an AB 2721 disclosure requirement — at a lease execution, at a sale — that they cannot satisfy with the documentation they have.

The resolution involves retroactive documentation — a process that is possible but more expensive and time-consuming than the documentation that should have been produced at project completion.

Retroactive documentation requires a licensed structural engineer to access the installed structural elements — which may require opening finished surfaces to verify the installed work against the permitted plans — produce as-built drawings of the retrofit as installed, verify that the installed work meets the code requirements of the original permit, and provide a professional certification of the completed work. The engineer's certification, combined with the as-built drawings, becomes the basis for pursuing the Certificate of Compliance through LADBS.

This process takes time — typically eight to sixteen weeks depending on the complexity of the retrofit, the condition of the original permit documentation, and LADBS's review timeline. It costs money — typically in the range of $5,000 to $15,000 for the engineering documentation effort alone, before any remediation work that may be required if the field investigation reveals installation deficiencies.

And it is entirely avoidable for owners who hire a firm that produces complete documentation at project completion as a standard practice.

The Cities Where AB 2721 Disclosure Is Most Immediately Relevant

AB 2721 applies statewide — to any residential building subject to a local mandatory seismic retrofit ordinance anywhere in California. But the cities where the disclosure obligation is most immediately relevant are the cities with active mandatory retrofit ordinances and approaching or recently passed compliance deadlines.

In the Los Angeles metropolitan area, that means:

Los Angeles — where the soft-story retrofit ordinance has been in effect since 2015, enforcement has been active since 2019, and the compliance deadline for most building tiers has already passed. Non-compliant buildings in LA are already subject to recorded compliance orders in many cases — orders that are material facts requiring disclosure independent of AB 2721.

Burbank, Torrance, Culver City, Pasadena, and Glendale — where the 2026 compliance deadlines are actively approaching. Property owners in these cities who are executing new leases or planning sales in the 2025-2026 window are in the exact disclosure window where AB 2721 compliance is most immediately relevant.

For owners in these cities with non-compliant buildings, every new lease executed after January 1, 2025 requires an AB 2721 compliant disclosure. The law is not prospective in a way that defers the disclosure obligation until the deadline passes — it requires disclosure of the current compliance status, which for non-compliant buildings is non-compliant, starting from the effective date of the law.

How SKS's Paper Trail Satisfies AB 2721 Directly

The documentation package that SKS Construction delivers at the completion of every soft-story retrofit project — the finaled LADBS permit, the Certificate of Compliance, the stamped as-built engineering drawings, the special inspection reports, and the engineer's certification letter — is the AB 2721 disclosure package.

Not a document that needs to be supplemented with additional information. Not a package that requires additional engineering work to satisfy the disclosure requirement. The complete set of project closeout documents that every SKS client receives at the end of their retrofit project is the documentation that AB 2721 requires landlords and sellers to produce.

The finaled permit provides the permit number that the AB 2721 disclosure must reference. The Certificate of Compliance establishes the compliant status that the disclosure must document. The engineer's certification letter provides the professional attestation that the disclosure requires. The as-built drawings provide the technical record that an independent reviewer can verify.

Property owners who have completed their retrofit with SKS can satisfy their AB 2721 disclosure obligations immediately, completely, and without any additional documentation effort. The disclosure package is already in their files.

This is not a coincidence. It is the direct consequence of a documentation standard — the complete project closeout package — that SKS has maintained as standard practice since the company was founded in 1987, long before AB 2721 created a legal framework that made that documentation a disclosure requirement.

We built the paper trail because it protects our clients. AB 2721 has now made that protection a legal obligation for every property owner in a mandatory retrofit jurisdiction.

What Non-Compliant Owners Should Do Right Now

If your building is subject to a mandatory soft-story retrofit ordinance and the retrofit has not been completed, your AB 2721 obligations are immediate and ongoing — not future obligations that arise when the compliance deadline passes. Every new lease you execute requires a non-compliance disclosure. Every sale you initiate requires a non-compliance disclosure in the Transfer Disclosure Statement.

The strategic response to that disclosure obligation is not to make the disclosure and accept the consequences indefinitely. It is to complete the retrofit — on your timeline, with a firm you select, at a fixed price — so that the disclosure changes from non-compliant to compliant, with documentation.

The timeline for completing a retrofit before the 2026 deadlines in Burbank, Torrance, Culver City, Pasadena, and Glendale is finite. Contractor scheduling backlogs are growing as deadlines approach. LADBS plan check timelines are extending as submission volume increases. The window for completing the retrofit on an owner-controlled timeline — rather than a deadline-driven timeline — is measured in months, not years.

For owners in Los Angeles proper whose deadlines have already passed, the AB 2721 disclosure obligation is already active. Every lease and every sale is a disclosure event. The retrofit is the resolution.

Get a FREE Retrofit Assessment and AB 2721 Documentation Review

SKS Construction offers FREE soft-story retrofit assessments for multifamily property owners across Los Angeles, Burbank, Glendale, Torrance, Culver City, and Pasadena. Our assessment covers the structural scope, the permit and compliance certification pathway, and — for owners with completed retrofits that lack full documentation — an evaluation of the retroactive documentation options that can satisfy the AB 2721 disclosure requirement.

For owners initiating new retrofits, we deliver the complete documentation package — final permit, Certificate of Compliance, stamped as-built drawings, engineer's certification — that satisfies AB 2721 at project completion.

Fixed-price bids. No subject-to-change clauses. Direct owner access to Shahab and Sam Shaolian. 39 years. 850-plus completed soft-story retrofits. One firm whose standard documentation package is the AB 2721 compliance package.

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