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S3406
SENATE, No. 3406
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 9, 2026
Sponsored by:
Senator� ANTHONY M. BUCCO
District 25 (Morris and Passaic)
Co-Sponsored by:
Senator Space
SYNOPSIS
���� Permits association of planned real estate
development to file application with Department of Community Affairs to lower
reserve fund obligations based on risk-mitigating features of development.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
establishing procedure by which an association of a
planned real estate development may lower reserve fund obligations and amending
P.L.2023, c.214.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� Section 7 of P.L.2023,
c.214 (C.45:22A-44.3) is amended to read as follows:
���� 7. a. An association of a
planned real estate development shall obtain a reserve study including a
30-year funding plan in order to ensure that the association has adequate
reserve funds available to repair or replace the capital assets located on the
common elements and facilities that the association is obligated to maintain
without need to create a special assessment or loan obligation, except as
permitted pursuant to subsection e. of this section.� These reserve funds shall
be used for the repair or replacement of components that have reached the end
of their established useful life as set forth in the most recent reserve study
undertaken pursuant to section 6 of P.L.2023, c.214 (C.45:22A-44.2).
���� b.��� (Deleted by amendment,
P.L.2025, c.132)
���� c.���� (Deleted by amendment,
P.L.2025, c.132)
���� d.��� (Deleted by amendment,
P.L.2025, c.132)
���� e.���� An association existing
as of the effective date of P.L.2023, c.214 (C.52:27D-132.2 et al.) shall, to
fund the association�s capital reserve fund, either:
���� (1) fund the capital reserve
fund in accordance with one of the funding plans set forth in the most recent
capital reserve study prepared on behalf of the association pursuant to
paragraph (7) of subsection a. of section 6 of P.L.2023, c.214 (C.45:22A-44.2);
or
���� (2) fund the capital reserve
fund in an amount equal to 85 percent of one of the capital reserve funding
plans pursuant to paragraph (7) of subsection a. of section 6 of P.L.2023,
c.214 (C.45:22A-44.2), and set forth in the most recent capital reserve study
prepared on behalf of the association, provided that:
���� (a) prior to the adoption of
an annual budget to fund the capital reserve fund account pursuant to this
paragraph, the association shall provide a notice to all unit owners of the
association in 20-point bold font, which specifies that the executive board of
the association has elected to fund the capital reserve fund at 85 percent of
the funding plan recommended by the association�s 30-year capital reserve study
and funding plan.� The notice shall provide the year in which a special
assessment or loan is anticipated as a result of the reduced funding of the
capital reserve fund and the anticipated amount of the special assessment or
loan that shall be required as a result of the decision by the executive board
of the association; and
���� (b) prior to the execution of
a contract for the purchase of a residential unit in the planned real estate
development, the seller of the unit shall provide to the buyer a copy of the
most recent notice provided to the unit owners of the association pursuant to
subparagraph (a) of this paragraph.
���� (3) The funding method
authorized pursuant to paragraph (2) of this subsection shall not be utilized
by an association for more than five fiscal years of the association next
following the effective date of P.L.2025, c.132.�
���� f.���� An association created
after the effective date of P.L.2023, c.214 (C.52:27D-132.2 et al.) shall fund
its capital reserve fund account in accordance with one of the capital reserve
funding plans set forth in the association�s most recent capital reserve study.�����
����
g.��� An association of a
planned real estate development may file an application with the Department of
Community Affairs to lower the development�s reserve fund, as determined by the
reserve study, based on risk-mitigating features of the development that limit
the possibility that the association may face substantial expenses to repair or
replace capital assets.
(cf:� P.L.2025, c.132, s.3).
���� 2.��� (New section) The
Commissioner of Community Affairs shall promulgate rules and regulations,
pursuant to the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et
seq.), in order to effectuate the provisions of
P.L.���
, c.��� (C.������� ) (pending before the Legislature as this bill)
,
including, but not limited to, what elements or characteristics may be
considered a risk-mitigating feature of an association of a planned real estate
development sufficient to lower the development�s reserve fund pursuant to
subsection g. of section 7 of P.L.2023, c.214 (C.45:22A-44.3).� Risk-mitigating
features may include, but shall not be limited to, the lack of a high-rise,
multifamily housing structure in the development.�
���� 3.���
This
act shall take effect on the first day of the third month next following the
date of enactment, except that the Commissioner of Community Affairs may take
anticipatory action necessary to implement the provisions of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).
STATEMENT
���� This bill permits a planned
real estate development to file an application with the Department of Community
Affairs (DCA) to lower the development�s reserve fund
obligations
�based on the risk-mitigating
features of the development.�
���� Pursuant to P.L.2023, c.214
(C.52:27D-132.2 et seq.
), an association of a
planned real estate development is required to maintain a reserve fund to
ensure that adequate funds are available to repair or replace common elements
and facilities of the association.� This bill amends P.L.2023, c.214
(C.52:27D-132.2 et seq.)
to permit a development
to reduce its reserve fund to account for risk-mitigating features that may
limit the possibility that the association will face substantial expenses to
repair or replace capital assets.� The bill directs the Commissioner of
Community Affairs to promulgate rules and regulations to provide guidance to
effectuate the provisions of this bill, including guidance on the consideration
of risk-mitigating development features.� Risk-mitigating features, as
determined by the commissioner, may include, but are not to be limited to, the
lack of a high-rise, multifamily housing structure in the development.
���� This bill is to take effect on
the first day of the third month after enactment, except that the Commissioner
of Community Affairs may take anticipatory action to effectuate the provisions
of this bill.