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| 1 | 1 | <STYLE><!--U {color: Green}S {color: RED} I {color: DARKBLUE; background-color:yellow} P.brk {page-break-before:always}--></STYLE> <BASEFONT SIZE=3> <PRE WIDTH="99"> <FONT SIZE=5><B> STATE OF NEW YORK</B></FONT> ________________________________________________________________________ 7600 2025-2026 Regular Sessions <FONT SIZE=5><B> IN SENATE</B></FONT> April 23, 2025 ___________ Introduced by Sen. BYNOE -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the real property law, in relation to directing condo- minium and cooperative housing associations to complete capital reserve studies <B><U>The People of the State of New York, represented in Senate and Assem-</U></B> <B><U>bly, do enact as follows:</U></B> 1 Section 1. The real property law is amended by adding a new section 2 339-mm to read as follows: 3 <B><U>§ 339-mm. Capitol reserve study. 1. Any condominium or cooperative</U></B> 4 <B><U>housing association created pursuant to this article shall undertake a</U></B> 5 <B><U>capital reserve study, including a thirty-year funding plan, in order to</U></B> 6 <B><U>ensure that the condominium or cooperative housing association has</U></B> 7 <B><U>adequate reserve funds available to repair or replace the assets located</U></B> 8 <B><U>on the property that the association is obligated to maintain without</U></B> 9 <B><U>the need to create any special assessment or loan obligation. All capi-</U></B> 10 <B><U>tal reserve studies shall be prepared in conformity with the latest</U></B> 11 <B><U>edition of the national reserve study standards of the community associ-</U></B> 12 <B><U>ations institute or similar standards by another recognized national</U></B> 13 <B><U>organization.</U></B> 14 <B><U>2. A capital reserve study conducted pursuant to this section shall be</U></B> 15 <B><U>performed or overseen by a reserve specialist credentialed through the</U></B> 16 <B><U>association of professional reserve analysts or an engineer or architect</U></B> 17 <B><U>who is in good standing with the state. Such reserve study shall</U></B> 18 <B><U>include, but not be limited to, the following:</U></B> 19 <B><U>(a) the association's capital reserve fund balances;</U></B> 20 <B><U>(b) the association's anticipated income and expenses;</U></B> 21 <B><U>(c) an analysis of the physical status and of the common area compo-</U></B> 22 <B><U>nents of the buildings and other common areas that the association is</U></B> 23 <B><U>obligated to maintain;</U></B> EXPLANATION--Matter in <B><U>italics</U></B> (underscored) is new; matter in brackets [<B><S> </S></B>] is old law to be omitted. LBD11718-02-5 </PRE><P CLASS="brk"><PRE WIDTH="99"> S. 7600 2 1 <B><U>(d) the anticipated costs associated with the building maintenance, as</U></B> 2 <B><U>well as the anticipated costs of repair or replacement of common build-</U></B> 3 <B><U>ing components, which are necessary to maintain the structural integrity</U></B> 4 <B><U>of the buildings and other common areas that the association is obli-</U></B> 5 <B><U>gated to maintain;</U></B> 6 <B><U>(e) a reasonable estimate of the cost of any future reserve studies,</U></B> 7 <B><U>reserve study updates, or engineering reports;</U></B> 8 <B><U>(f) a reasonable estimate of the costs associated with implementing</U></B> 9 <B><U>any corrective maintenance;</U></B> 10 <B><U>(g) a proposed thirty-year funding plan that establishes the adequate</U></B> 11 <B><U>proposed capital reserve funding over a thirty-year period; and</U></B> 12 <B><U>(h) any other information necessary to perform an analysis of the</U></B> 13 <B><U>adequacy of the association's capital reserve funds relative to main-</U></B> 14 <B><U>taining the structural integrity of buildings and common areas in which</U></B> 15 <B><U>the association is obligated to maintain.</U></B> 16 <B><U>3. Associations which have not undertaken a reserve study within five</U></B> 17 <B><U>years of the effective date of this section shall undertake a reserve</U></B> 18 <B><U>study within one year of this legislation going into effect. Associ-</U></B> 19 <B><U>ations formed after the effective date of this section shall have two</U></B> 20 <B><U>years after the election of a majority of a board of managers to</U></B> 21 <B><U>complete a reserve study.</U></B> 22 <B><U>4. A property management company or owner shall ensure that a capital</U></B> 23 <B><U>reserve study conducted pursuant to this section shall be reviewed by a</U></B> 24 <B><U>licensed architect, engineer, or credentialed reserve specialist.</U></B> 25 <B><U>5. This section shall not apply to an association with less than twen-</U></B> 26 <B><U>ty-five thousand dollars in total common area capital assets.</U></B> 27 <B><U>6. If a condominium or cooperative housing association does not have</U></B> 28 <B><U>an adequate reserve fund as described in subdivision one of this section</U></B> 29 <B><U>and would require an increase of more than ten percent of the prior</U></B> 30 <B><U>year's common expense assessment, the deficiency shall be made adequate</U></B> 31 <B><U>within ten fiscal years or the projected date predicted by the reserve</U></B> 32 <B><U>study by which absent increased funding, the balance in the associ-</U></B> 33 <B><U>ation's reserve account would fall below zero. In either case, the annu-</U></B> 34 <B><U>al increase in reserve funding during the required period of time shall</U></B> 35 <B><U>be an equal annual line item increase in the reserve fund until the</U></B> 36 <B><U>reserve fund is made adequate, notwithstanding causing an increase of</U></B> 37 <B><U>more than ten percent in the annual common expense assessment.</U></B> 38 <B><U>7. If a condominium or cooperative housing association does not have</U></B> 39 <B><U>an adequate reserve fund as described in subdivision one of this section</U></B> 40 <B><U>and would require an increase of less than ten percent of the prior</U></B> 41 <B><U>year's common expense assessment, the deficiency shall be made adequate</U></B> 42 <B><U>within three fiscal years.</U></B> 43 <B><U>8. All capital reserve fund studies completed pursuant to this section</U></B> 44 <B><U>shall be reviewed on an annual basis by the board of managers and the</U></B> 45 <B><U>property management company to determine if the reserve fund balance is</U></B> 46 <B><U>adequate to cover estimated costs for the year.</U></B> 47 <B><U>9. Any capital reserve study completed pursuant to this section must</U></B> 48 <B><U>be filed with the office of the attorney general within sixty days of</U></B> 49 <B><U>completion. The attorney general shall have the authority to review and</U></B> 50 <B><U>audit such documents and compel a property management company, board of</U></B> 51 <B><U>managers, or any condominium or cooperative housing association to</U></B> 52 <B><U>complete a capital reserve study if they have not done so pursuant to</U></B> 53 <B><U>this section.</U></B> 54 § 2. This act shall take effect on the one hundred eightieth day after 55 it shall have become a law. |