Why Is California's SB-326 Balcony Law Stalling Condo Sales?

By Tammy Jerome

Tammy Jerome is an award-winning broker and host of “Selling Los Angeles” on the acclaimed American Dream TV show, with over two decades of experience and more than 1,500 successful transactions.

A California safety law that sat quietly on the books for years is suddenly reshaping how condos and townhomes change hands. If you own one, are thinking about buying one, or have a sale in progress, this is worth understanding now rather than discovering it the hard way in escrow.

There’s also a second law worth a quick refresher first. Earlier this year, we covered Assembly Bill 2424, which gives homeowners who have fallen behind more time and more options to sell before a trustee’s sale, including required outreach from the lender and mandatory delays once the home is listed or under contract. With pre-foreclosure activity on the rise, those protections matter. If you want the full breakdown, I walk through the details in my earlier video.

What SB-326 is and why it exists. SB-326 was enacted in 2019 after a balcony collapsed in Berkeley and six people were killed. The law was written to prevent structural failures of balconies and elevated decks in condos and common interest developments. The intent was straightforward: catch hidden problems before they turn deadly.

When enforcement actually began. For years, the law wasn’t fully enforced. That changed around March of this year, when Fannie Mae and Freddie Mac, the institutions standing behind most home loans in the country, began enforcing it strictly. When those two move, the entire lending market moves with them.

What the inspection requires. SB-326 requires California condominium and HOA associations to inspect all exterior elevated elements, mainly balconies and decks six feet or higher off the ground, to confirm they’re safe. The first inspection was due by January 1, 2025. That deadline has not been extended for condos, despite frequent confusion with a separate apartment law that did get pushed to 2026.

Why sales can’t close without an inspection. As of this spring, it’s effectively impossible to close escrow with a conventional, warrantable Fannie Mae or Freddie Mac loan unless the balconies have been inspected and, where problems were found, the retrofitting work has been completed. No inspection, no loan, no closing.

Every balcony in the complex must be certified, not just yours. It doesn’t matter to Fannie Mae and Freddie Mac whether your individual condo or townhome balcony is safe and sound. They require that every balcony in the entire complex be certified as safe and sound. One unaddressed balcony three buildings over can hold up your sale. That single detail has thrown a monkey wrench into a lot of transactions that were already in the middle of escrow.

If you’re planning to buy or sell a condo or townhome, ask early whether the association has completed its SB-326 inspection and any required repairs across the whole complex, not just your unit. Knowing that before you list or write an offer can save you weeks of delay and a deal that falls apart at the worst possible moment.

I’m keeping a close eye on how this plays out, because requirements like this keep arriving, and the owners who hear about them first are the ones who avoid the surprises. If you have questions about how SB-326 might affect your property or a sale you’re considering, I’m here to help. Call or text me at (818) 903-5854, email me at tammyjerome@gmail.com, or visit tammyjerome.com. I’m always glad to walk you through what this means for your specific situation.