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 that in those cases in which a capital asset reaches the end of its established useful life earlier than predicted by the reserve study, nothing herein is intended to prevent the imposition of a special assessment or obtaining a loan. 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. When an expenditure of the reserve funds is required to repair or replace a component pursuant to subsection a. of this section, the association shall use only the amount of reserve funds allocated by the reserve study to make such repair or replacement, unless:

(1) the use of such additional funds from the reserve fund is not reasonably anticipated to prevent or interfere with the ability of the association to undertake additional repairs or replacements in the five years subsequent to the additional expenditure; and

(2) the association’s executive board adopts a written resolution requiring that the expenditure of these additional funds shall be recovered within the following five fiscal years.

c. If an association existing as of the effective date of P.L.2023, c.214 (C. 52:27D-132.2 et al.) does not have an adequate reserve fund as described in subsection a. of this section, and the increase in the association’s budget line item for reserve funding to render it adequate as set forth in the reserve study would, without reference to any other budget line item adjustments, require an increase of more than 10 percent of the previous year’s common expense assessment, the deficiency shall be made adequate within the earlier of the following 10 fiscal years, or the projected date predicted by the reserve study by which absent increased funding, the balance in the association’s reserve account would fall below zero. In either case, the annual increase in reserve funding during the required period of time shall be an equal annual line item increase in the reserve fund until the reserve fund is made adequate, notwithstanding causing an increase of more than 10 percent in the annual common expense assessment.

d. If an association existing as of the effective date of P.L.2023, c.214 (C. 52:27D-132.2 et al.) does not have an adequate reserve fund as described in subsection a. of this section, and the increase in the association’s budget line item for reserve funding to render it in conformity with the reserve study would, without reference to any other item adjustments, require an increase of less than 10 percent of the previous year’s common expense assessment, the deficiency shall be made adequate within the following two fiscal years.

L.2023, c.214, s.7.