Thanks for reading this brief insert regarding RESERVES. Please review the continuing requirements for Boards/Committees; the Reserve Analysis requirements; penalties; and new DECLARANT OBLIGATIONS. (as always more to come)
SENATE BILL 80
CONDOMINUM ACT CHANGES
57-8-7.5 – Reserve Analysis
“Reserve funds” means money to cover the cost of repairing, replacing or restoring common areas and facilities that have a useful life of 3 years or more and a remaining useful life of less than 30 years, if the cost cannot reasonably be funded from the general budget or other funds of the association of unit owners.
- The requirements for an association to have a reserve analysis remain the same but do not apply to an association during the period of administrative control. Those requirements repeated here are:
- Committee shall do a reserve analysis no less than every 6 years;
- Review and if necessary update prior reserve analysis no less than every 3 years
- Committee can conduct their own reserve analysis or hire someone else to do it.
- The reserve analysis shall include:
(a) a list of what components will require reserve funds
(b) statement of the probably meaning useful life of each component
(c) estimate of the cost for each component
(d) estimate of the total annual contribution to a reserve fund necessary to meet the cost to fund each component identified
(e) reserve funding plan recommending how the association can fund the contribution to the reserve fund.
6. An association should annual provide unit owners a summary of the most recent reserve analysis, provide a copy to anyone who requests it, within 45 days after owners adopt the annual budget, owners may veto the reserve fund line item by a 51% vote.
7. If the association does not comply with requirements, a unit owner may file an action for injunctive relief requiring association to comply. $500 fine or actual damages plus attorney fees may be recovered.
8. 90 days before an owner files a complaint, the owner shall give association notice that statements the requirement the association failed to comply with, a demand to comply and a date, no less than 90 days, by which the association shall comply.
9. A management committee may not use money in a reserve fund for daily maintenance expenses, unless a majority of the members vote for it. The reserve fund should be separate from other funds of the association.
NEW – PART OF SENATE BILL 80 – Declarant and documents.
- For a condominium’s declaration recorded after May 12, 2015, and during administrative control, the Declarant shall give the third party:
(a) a copy of the governing documents and
(b) a copy of the association’s most recent financial statement that includes any reserve funds held by the association.
SENATE BILL 80
COMMUNITY ASSOCIATION ACT CHANGES –SAME AS ABOVE