At 6:47 p.m. on February 28, 2026, the Santa Clara Fire Department got a call about displaced concrete at a condo complex on El Camino Real. Within minutes, firefighters were going door to door telling residents to get out. One resident later described the moment a firefighter told her, simply, "Everyone has to leave the house now." By morning, about 130 people were out of their homes, and the building at the center of it, Villa Bella, was less than two years old.
That detail is the whole story. Buyers walk into new construction assuming newer means safer, more code-compliant, less to worry about than a 1970s complex with decades of deferred maintenance. Villa Bella flips that assumption. The building that failed wasn't old and neglected. It was young enough that the paperwork meant to catch problems like this hadn't had time to exist yet.
What actually cracked
Villa Bella sits at 1850 El Camino Real on the site of a project once called Anantara Villas. In 2019, while the building was still under construction, a fire tore through the wood framing above the parking garage, exposing the concrete slab underneath to extreme heat. That slab was post-tensioned, a common technique in multifamily construction where steel tendons are threaded through the concrete and pulled tight with hydraulic jacks after it cures, adding strength while using less material than traditional rebar. It's cost-effective and structurally sound when installed and maintained correctly, but the system is vulnerable to corrosion, and corrosion accelerates with heat exposure and water intrusion. The project resumed construction, was renamed Villa Bella in September 2022, and closed its first sale on May 31, 2024.
Within a year, residents were leaving public reviews describing leaks, rust on metal railings and pipes, and a developer slow to respond. One owner wrote plainly that "multiple metal structures are already rusting." Those complaints sat online for months before the concrete finally gave way on the north side of the building, the same side that had been exposed to the 2019 fire.
The compliance clock nobody could see
Here's what makes this more than a bad-luck story about one developer. California's rules for catching this kind of risk were still being assembled while Villa Bella's own problems were compounding.
| Date | What happened |
|---|---|
| 2019 | Fire during construction damages the framing above the parking garage |
| September 2022 | Project resumes and is renamed Villa Bella |
| May 31, 2024 | First unit closes escrow |
| 2025 | Owners begin posting complaints about leaks and rust |
| January 1, 2025 | Statewide deadline for California condo HOAs to complete a first SB 326 inspection of exterior elevated elements |
| January 1, 2026 | SB 410 took effect, requiring that SB 326 report to be included in every seller's disclosure packet |
| February 28, 2026 | Displaced concrete triggers evacuation of roughly 130 residents |
Villa Bella's HOA was less than a year old when the state's SB 326 inspection deadline hit. SB 410, which now forces that inspection report into the disclosure packet every buyer receives, didn't take effect until January 1, 2026, just weeks before the evacuation. The legal infrastructure that might have surfaced this problem on paper was still catching up to the building's actual condition.
Why the newest buildings have the thinnest paper trail
A California condo HOA has to complete a full reserve study, with a physical inspection, at least once every three years under Civil Code section 5550. Before that first study happens, the numbers homeowners see are usually still the developer's original worksheet, filed with the state Department of Real Estate as part of getting approval to sell units. That worksheet is often assembled a year or more before the building is finished, and it can be stale by the time the first unit closes. A building two years old, like Villa Bella was, may not have gone through even one full independent reserve cycle yet.
That's the mechanism worth understanding if you're shopping condos in Santa Clara right now. An older building, say fifteen or twenty years in, has multiple completed reserve studies on file, a longer record of board minutes, and since 2025, at least one SB 326 inspection to point to. A building that closed its first sale in the last two or three years has none of that. The absence of red flags in a young building's file isn't necessarily good news. It can just mean the file is thin.
What to ask before you write an offer
A standard home inspection covers the unit itself, not the shared structure, the garage slab, or the HOA's financial health. If you're evaluating a condo built in the last five years, ask for these specifically:
- Whether the HOA has completed its SB 326 inspection of exterior elevated elements, and if so, request the full report rather than a summary.
- When the HOA's most recent full reserve study, with a physical site inspection, was completed, not just the annual funding update.
- Any board correspondence or minutes referencing water intrusion, leaks, or structural concerns, even informal ones.
- Whether your lender considers the building warrantable under Fannie Mae guidelines. A young HOA with incomplete reserve or inspection records can quietly become ineligible for standard financing, which narrows the buyer pool to cash or portfolio loans if you ever need to sell.
- What year the developer turned control over to the HOA, and whether current reserve figures still reflect the original developer worksheet rather than an independent analyst's numbers.
None of this shows up in a typical inspection contingency. It has to be asked for directly, in writing, before the contingency period closes.
The market gives you room to ask
This is easier to do right now than it would have been two years ago. Santa Clara County's median condo sale price fell 8.7% year over year for closings in June 2026, even as condo sales volume rose 4.8% and days of inventory climbed from 78 to 80. That combination, more units moving but at softer prices with slower absorption, is not a market where sellers can dictate a five-day contingency window. Buyers have room to request documents, wait for a reserve study, and walk away if an HOA can't produce one.
Frequently asked questions
Does this only apply to large complexes like Villa Bella? No. Civil Code 5550's reserve study requirement applies to any common interest development, including small associations, though the components inspected will differ based on what the HOA is responsible for maintaining.
If a condo is fifteen or twenty years old, does that mean it's safer? Not automatically. Age doesn't eliminate structural risk. What it does is give the building more completed reserve study cycles and, since 2025, a longer compliance record you can actually review before making an offer.
Can I still get a mortgage if the HOA hasn't finished its SB 326 inspection? It depends on the lender. Some retail lenders decline to write loans on buildings flagged as non-warrantable, which is why confirming warrantable status early in the process, before you're deep into a transaction, matters.
If you're looking at a condo in Santa Clara built in the last few years, the unit finishes are the easy part to judge. The HOA's paper trail is the part that actually predicts your risk, and it's worth having someone pull it apart before you write an offer. VKG Real Estate Group works these documents on every Santa Clara transaction we take on, and we're glad to walk through a specific building's records with you before you commit to anything.
