SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE
STATEMENT TO
SENATE, No. 3992
STATE OF NEW JERSEY
DATED: JANUARY 30, 2025
The Senate Community and Urban Affairs Committee reports
favorably Senate Bill No. 3992.
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.