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 contributions. The bill defines "adequate" and "adequacy" in terms of ensuring that the reserve fund does not fall below zero, based on professional standards applied by qualified specialists overseeing the reserve study.

Additionally, the bill shifts the responsibility for ensuring the review of the capital reserve study from the covered building owner to the association itself, mandating that the study be conducted and reviewed at least once every five years. It also outlines funding requirements for associations existing as of January 8, 2024, allowing them to fund their reserve either according to the most recent study or at 85% of the recommended funding plan, with specific notice requirements to unit owners regarding potential special assessments or loans. The bill further restricts the use of the 85% funding option to a maximum of five fiscal years and mandates that newly created associations adhere to the funding plan set forth in their most recent reserve study. Certain outdated provisions regarding reserve funding have also been removed from the law.

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