This bill amends existing legislation regarding the capital reserve funding requirements for associations of planned real estate developments. It introduces a definition for "adequate" or "adequacy," specifying that it refers to a sum of money sufficient to ensure that the balance in the association's reserve fund does not fall below zero dollars, as outlined in a 30-year funding plan. The bill also mandates that the proposed 30-year funding plan must allow for the reserve fund to reach a zero balance during the projection period, while permitting additional funding plans with higher minimum balances or escalating contributions, provided the fund does not fall below zero.

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 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