CAI-NJ Sept.2018(w)(1)

the period of developer control, that owner working capital contributions from closings cannot be used to offset the developer’s funding obli- gation, except to offset “unforesee- able expenses”, which are thereafter defined, and even then, only propor- tional to the closed homes as a per- centage of the total homes planned in the community. At present, the regulations to PREDFDA provide for associations to adopt annual operating budgets to provide for any and all common expenses to be incurred during the year as well as adequate reserves for repair and replacement of the com- mon elements and facilities. Once again, however, “adequate” is not defined, leading to disputes with developers in new communities, and to lack of clarity for all associations, regardless of age. CAI-NJ and the NJBA have proposed amendment regulations, summarized as follows: • Reserve contributions must be estab- lished for all common area compo- nents with a useful life up to and including 30 years, and for roofs, irrespective of their useful life. • The reserve schedule must be pre- pared by a Reserve Specialist designed by CAI or a “NJ licensed engineer or architect familiar with community association reserve funding standards.” • During new construction of phased communities, the developer shall update the reserve schedule with ADEQUATE RESERVE FUNDING

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