Bill > A5844

Introduced Session

This bill modifies certain requirements concerning the capital reserve study, 30-year funding plan, and capital reserve fund of an association of a planned real estate development (association), required by recently enacted law, P.L.2023, c.214 (C.52:27D-132.2 et al.). Specifically, the bill requires a proposed 30-year capital reserve funding plan or plans within a capital reserve study, required pursuant to section 7 of P.L.2023, c.214 (C.45:22A-44.3), to allow a capital reserve fund of an association to reach a dollar balance of zero during the 30-year funding plan projection. The bill permits a capital reserve study to provide additional funding plans that have a minimum fund balance greater than zero, or funding plans with escalating annual contributions, provided the reserve fund balance is not projected to fall below zero dollars. Further, the bill defines the terms "adequate" and "adequacy" to mean a sum of money, however invested or held by an association of a planned real estate development, that, in accordance with the professional standards applied by the reserve specialist, architect, or engineer performing or overseeing the study, is sufficient so that the balance in the association's reserve fund will not fall below zero dollars as set forth in the association's 30-year funding plan, prepared as part of a reserve study. The bill requires an association of a planned real estate development, instead of a covered building owner, to ensure that a capital reserve study is reviewed by a licensed architect, engineer, or credentialed reserve specialist and that a capital reserve study is conducted and reviewed at least once every five years. The bill further requires:· an association existing as of January 8, 2024 to fund the reserve fund either: in accordance with the most recent reserve study and funding plan; or in an amount equal to 85 percent of one of the association's reserve funding plans;· if the association chooses to fund the reserve fund in an amount equal to 85 percent of the association's reserve funding plan, the association to provide certain notice to the unit owners and provide the year in which a special assessment or loan is anticipated as a result of the reduced funding of the reserve fund, and the amount of the anticipated special assessment or loan; and· the seller of a unit within an association that has elected to fund the reserve fund at 85 percent to provide to the buyer a copy of the most recent notice provided to the unit owners of the association concerning the association's decision to fund the reserve fund at 85 percent. The bill prohibits an association from funding the reserve fund at 85 percent for more than five fiscal years and specifies that an association created after January 8, 2024 is to fund the association's reserve fund in accordance with the capital reserve funding plan set forth in the association's most recent reserve study. Lastly, the bill removes certain language concerning an association's reserve fund from existing law.

AI Summary

Committee Categories

Yvonne Lopez (D)*,  Tennille McCoy (D)*,  Sterley Stanley (D)*, 

Substituted by S3992 (1R) (on 06/30/2025)

Official Document