NJ A2999

Developers of planned real estate communities must post a bond with the Department of Community Affairs equal to the annual budget (first year) or annual budget plus accumulated reserves (subsequent years) until management contracts expire and transition requirements are met.

Associations must maintain adequate reserve funds for common element repairs and replacements, including roof replacement, building painting, and pavement resurfacing, with reserves calculated based on estimated useful life and replacement costs.

Developer-prepared budgets cannot include payments or subsidies that artificially lower monthly assessments unless fully disclosed in the public offering statement, and annual independent audits are required while the developer controls the executive board.

Upon transitioning control to owners, developers must provide an engineering report on common elements (prepared by an owner-selected engineer), documentation of all governmental approvals, and a full accounting of association activities during developer control.

Two or more owners may file derivative warranty claims on behalf of the association for common element warranties during the period of developer control.