Common interest developments: reserve accounts.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Passed
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill updates the requirements for common interest developments to better manage their reserve accounts. Starting January 1, 2032, associations must conduct a study to determine the minimum reserve contribution level needed to prevent their reserve account balance from falling below zero over the next 30 years. If a projected shortfall is identified, the association must transfer at least 15% of its annual budget to the reserve account, and if that’s insufficient, it may need to levy a special assessment to reach the minimum contribution level within nine years. The bill also clarifies the scope of the reserve account study and its funding requirements.
Key provisions
- Requires a study of reserve account requirements, including a minimum reserve contribution level to prevent a balance from falling below zero over 30 years.
- Mandates an annual transfer of at least 15% of the budget to the reserve account if the projection indicates a shortfall.
- Allows for a reserve funding special assessment if the budget transfer is insufficient to meet the minimum contribution level.
- Establishes a timeline for addressing reserve account shortfalls, with a goal of achieving the minimum contribution level within nine years.
- Defines ‘major components’ for the purpose of the reserve account study.
- Specifies that the study must consider the remaining useful life of major components.
- Requires an association to review and update its study annually.
- Sets a date of January 1, 2032, for the implementation of these changes.
Bill text
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