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California State Auditor Report Number : 2015-134

Residential Building Records
The Cities of San Rafael, Novato, and Pasadena Need to Strengthen the Implementation of Their Resale Record Program

March 24, 2016 2015-134

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the administration of residential building record (resale record) programs by the cities of San Rafael, Novato, and Pasadena. These cities each have a resale record ordinance requiring owners of residential properties to obtain from the city a review of the property's records, including an inspection for health and safety violations, prior to the sale or transfer of the property. Each city summarizes its review by preparing a resale record report (report), which identifies violations of the California Building Standards Code (code) and local regulations. The cities can require the property owner to correct the violations and, if necessary, obtain the appropriate building permits from the city and a reinspection of the property.

This report concludes that the cities need to strengthen several aspects of their resale record programs to foster property owners' compliance with local laws and to address lingering health and safety risks. Specifically, the three cities are not actively monitoring sales and transfers of residential properties, which limits their ability to ensure that inspections are performed as required. In addition, the cities do not have formal processes for addressing complaints in a consistent manner, as well as tracking the complaints they receive and how they are resolved. Moreover, the cities do not consistently follow up with property owners on the correction of violations identified during the inspections, despite having policies to do so. In fact, we noted that each city has a significant backlog of properties with unresolved violations requiring permits or reinspections.

The three cities have various goals for completing inspections and issuing reports within specific time frames, although we identified several instances where San Rafael and Pasadena did not meet their time goals. In contrast, Novato met its time goal of 10 business days from the inspection date to the report issuance date for those properties we reviewed, although we conclude that this goal appears to be much longer than the city needs.

Further, our analysis of and subsequent inquiries about the cities' current fee structures for single‑family and condominium dwellings—the most common types of fees charged—ultimately determined that the three cities are likely undercharging property owners for these inspections. We also determined that most of the inspection staff the cities employed during the past five years either met or exceeded the minimum qualifications for their positions. Although resale record inspectors at the three cities have attended continuing education sessions regarding building standards, the cities do not keep attendance records and have not established continuing education requirements to ensure that their staff remain current on code requirements.

Respectfully submitted,

State Auditor

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