Bill > S3992

This bill modifies capital reserve funding requirements for planned real estate developments by establishing detailed guidelines for how homeowners' associations must conduct and fund capital reserve studies. Specifically, the bill requires associations to undertake a comprehensive 30-year capital reserve study that assesses the financial resources needed to maintain and replace common area components without creating special assessments or loans. Associations existing prior to the law's effective date can choose to either fully fund their reserve account according to the study's recommendations or fund at 85% of the recommended amount, but this reduced funding option is only permitted for five fiscal years. The bill defines key terms like "adequate" funding (which means maintaining a reserve fund that does not fall to zero over 30 years), "covered building" (primarily concrete, masonry, or steel residential condominium or cooperative structures), and establishes requirements for who can conduct structural inspections. The legislation applies to associations with more than $25,000 in total common area assets and mandates that reserve studies be conducted and reviewed at least once every five years by a licensed professional. These provisions aim to ensure that homeowners' associations maintain sufficient financial resources for long-term maintenance and structural integrity of shared property.

Housing and Urban Affairs

https://www.njleg.state.nj.us/bill-search/2024/S3992