This bill amends existing legislation regarding the capital reserve funding requirements for associations of planned real estate developments. It establishes that a proposed 30-year capital reserve funding plan must allow the reserve fund to reach a balance of zero dollars during the projection period, while also permitting additional funding plans that maintain a minimum balance above zero or include escalating annual contributions, as long as the fund does not fall below zero. The bill also clarifies the definitions of "adequate" and "adequacy," ensuring that the reserve fund remains sufficient to avoid falling below zero as outlined in the 30-year funding plan.

Additionally, the bill modifies the timeline for addressing inadequacies in reserve funds. If an increase in the budget line item for reserve funding exceeds 10 percent of the previous year's common expense assessment, the association must rectify the deficiency within either 30 fiscal years or by the date predicted in the reserve study when the fund balance would drop below zero. Furthermore, the responsibility for ensuring that a capital reserve study is conducted and reviewed every five years shifts from the covered building owner to the association itself, which must have the study reviewed by a licensed professional.

Statutes affected:
Introduced: 52:27D-132.3, 45:22A-44.2, 45:22A-44.3