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In 2024, New Jersey’s Governor signed bill S2760/A4384, commonly referred to as the STRUCTURAL INTEGRITY BILL, into law. This law amends the PLANNED REAL ESTATE DEVELOPMENT FULL DISCLOSURE ACT (PREDFD). This law requires all associations (with exceptions for those with less than $25,000 in common area capital assets) to obtain a CAPITAL RESERVE STUDY with a 30-YEAR FUNDING PLAN. There are three main types based on the level of detail and site inspection involved: LEVEL 1 (Full Reserve Study) LEVEL 2 (Update with Site Visit) LEVEL 3 (Update without Site Visit) By law, the study must be conducted by a licensed engineer, architect, or a reserve specialist. Three (3) bids were received from reserve specialists. RESERVE ADVISORS (ReserveAdvisors.com) was chosen. While the study will cost $3,850, we are anticipating miscellaneous costs, for a final total of $5,000.00. WHAT IS A CAPITAL RESERVE STUDY? - A detailed analysis of a property's condition and financial needs - This study must be done every five (5) years WHAT DOES A LEVEL 1 CAPITAL RESERVE STUDY INCLUDE? - ON-SITE INSPECTION: A physical inspection of the property's exterior, interior, infrastructure, and mechanical and electrical systems - RESERVE FUND ANALYSIS: An examination of the current status of the property's reserve funds - CAPITAL ASSET ANALYSIS: An in-depth analysis of the property's capital assets WHAT DOES A CAPITAL RESERVE STUDY PRODUCE? - It takes into account the site specific existing conditions, their useful life, and the realistic replacement costs based upon actual material costs and the site specific individual items method of reconstruction - It identifies how much money should be set aside, on a yearly basis, to maintain, repair or replace the property over time - A Reserve Funding Plan - A prioritized list of capital projects that need to be done What are the implications for us? Once the study has been completed (estimated April 2025) and we are presented with the company’s recommendations, we will review with our lawyer and report the findings back to the association. We will have 10 years to implement the mandated recommendations from the study. We intend to begin making any financial changes in 2026. Links to review for reference: CAPITAL RESERVE PRESENTATION NJ RESERVE STUDY LEGISLATION FAQs AN INTERVIEW WITH ATTORNEY MICHAEL S. SIMONE |
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Lindy's Lake members are stewards of a beautiful natural resource. Please continue to do your part to maintain the jewel of our community. |