The act requires mandatory reserve studies for common interest communities that have major shared components, including common elements or property that the unit owners' association (association) is responsible for maintaining, repairing, or replacing.
- Specifies the level of reserve study required and the necessary components of the reserve study at each level;
- Requires a declarant to obtain reserve studies commencing with the development of the common interest community and to provide reserve studies to potential purchasers of units in the common interest community in the seller's disclosures; and
- Requires the declarant to provide a reserve study at the time the declarant turns the common interest community property over to the association, along with reserve funds recommended by the reserve study.
The act defines "emergent life circumstances" and authorizes an association's executive board to obtain additional funding from unit owners to address dangerous conditions if the reserve funds are not sufficient to address the conditions.
The act limits the investment of reserve funds in financial instruments that are not insured by a federal agency.
The act clarifies that certain reserve study requirements in the act apply to preexisting common interest communities with respect to events and circumstances occurring on or after July 1, 2024.
(Note: This summary applies to this bill as enacted.)