Senate Bill S7600

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7600
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              April 23, 2025
                                ___________
 
 Introduced  by  Sen.  BYNOE  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 AN ACT to amend the real property law, in relation to  directing  condo-
   minium  and  cooperative  housing  associations  to  complete  capital
   reserve studies

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  real property law is amended by adding a new section
 339-mm to read as follows:
   § 339-MM. CAPITOL RESERVE STUDY. 1.  ANY  CONDOMINIUM  OR  COOPERATIVE
 HOUSING  ASSOCIATION  CREATED PURSUANT TO THIS ARTICLE SHALL UNDERTAKE A
 CAPITAL RESERVE STUDY, INCLUDING A THIRTY-YEAR FUNDING PLAN, IN ORDER TO
 ENSURE THAT THE  CONDOMINIUM  OR  COOPERATIVE  HOUSING  ASSOCIATION  HAS
 ADEQUATE RESERVE FUNDS AVAILABLE TO REPAIR OR REPLACE THE ASSETS LOCATED
 ON  THE  PROPERTY  THAT THE ASSOCIATION IS OBLIGATED TO MAINTAIN WITHOUT
 THE NEED TO CREATE ANY SPECIAL ASSESSMENT OR LOAN OBLIGATION. ALL  CAPI-
 TAL  RESERVE  STUDIES  SHALL  BE  PREPARED IN CONFORMITY WITH THE LATEST
 EDITION OF THE NATIONAL RESERVE STUDY STANDARDS OF THE COMMUNITY ASSOCI-
 ATIONS INSTITUTE OR SIMILAR STANDARDS  BY  ANOTHER  RECOGNIZED  NATIONAL
 ORGANIZATION.
   2. A CAPITAL RESERVE STUDY CONDUCTED PURSUANT TO THIS SECTION SHALL BE
 PERFORMED  OR  OVERSEEN BY A RESERVE SPECIALIST CREDENTIALED THROUGH THE
 ASSOCIATION OF PROFESSIONAL RESERVE ANALYSTS OR AN ENGINEER OR ARCHITECT
 WHO IS IN GOOD  STANDING  WITH  THE  STATE.  SUCH  RESERVE  STUDY  SHALL
 INCLUDE, BUT NOT BE LIMITED TO, THE FOLLOWING:
   (A) THE ASSOCIATION'S CAPITAL RESERVE FUND BALANCES;
   (B) THE ASSOCIATION'S ANTICIPATED INCOME AND EXPENSES;
   (C)  AN  ANALYSIS OF THE PHYSICAL STATUS AND OF THE COMMON AREA COMPO-
 NENTS OF THE BUILDINGS AND OTHER COMMON AREAS THAT  THE  ASSOCIATION  IS
 OBLIGATED TO MAINTAIN;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11718-02-5
 S. 7600                             2
              

 
   (D) THE ANTICIPATED COSTS ASSOCIATED WITH THE BUILDING MAINTENANCE, AS
 WELL  AS THE ANTICIPATED COSTS OF REPAIR OR REPLACEMENT OF COMMON BUILD-
 ING COMPONENTS, WHICH ARE NECESSARY TO MAINTAIN THE STRUCTURAL INTEGRITY
 OF THE BUILDINGS AND OTHER COMMON AREAS THAT THE  ASSOCIATION  IS  OBLI-
 GATED TO MAINTAIN;
   (E)  A  REASONABLE ESTIMATE OF THE COST OF ANY FUTURE RESERVE STUDIES,
 RESERVE STUDY UPDATES, OR ENGINEERING REPORTS;
   (F) A REASONABLE ESTIMATE OF THE COSTS  ASSOCIATED  WITH  IMPLEMENTING
 ANY CORRECTIVE MAINTENANCE;
   (G)  A PROPOSED THIRTY-YEAR FUNDING PLAN THAT ESTABLISHES THE ADEQUATE
 PROPOSED CAPITAL RESERVE FUNDING OVER A THIRTY-YEAR PERIOD; AND
   (H) ANY OTHER INFORMATION NECESSARY TO  PERFORM  AN  ANALYSIS  OF  THE
 ADEQUACY  OF  THE  ASSOCIATION'S CAPITAL RESERVE FUNDS RELATIVE TO MAIN-
 TAINING THE STRUCTURAL INTEGRITY OF BUILDINGS AND COMMON AREAS IN  WHICH
 THE ASSOCIATION IS OBLIGATED TO MAINTAIN.
   3.  ASSOCIATIONS WHICH HAVE NOT UNDERTAKEN A RESERVE STUDY WITHIN FIVE
 YEARS OF THE EFFECTIVE DATE OF THIS SECTION SHALL  UNDERTAKE  A  RESERVE
 STUDY  WITHIN  ONE  YEAR OF THIS LEGISLATION GOING INTO EFFECT.  ASSOCI-
 ATIONS FORMED AFTER THE EFFECTIVE DATE OF THIS SECTION  SHALL  HAVE  TWO
 YEARS  AFTER  THE  ELECTION  OF  A  MAJORITY  OF  A BOARD OF MANAGERS TO
 COMPLETE A RESERVE STUDY.
   4. A PROPERTY MANAGEMENT COMPANY OR OWNER SHALL ENSURE THAT A  CAPITAL
 RESERVE  STUDY CONDUCTED PURSUANT TO THIS SECTION SHALL BE REVIEWED BY A
 LICENSED ARCHITECT, ENGINEER, OR CREDENTIALED RESERVE SPECIALIST.
   5. THIS SECTION SHALL NOT APPLY TO AN ASSOCIATION WITH LESS THAN TWEN-
 TY-FIVE THOUSAND DOLLARS IN TOTAL COMMON AREA CAPITAL ASSETS.
   6. IF A CONDOMINIUM OR COOPERATIVE HOUSING ASSOCIATION DOES  NOT  HAVE
 AN ADEQUATE RESERVE FUND AS DESCRIBED IN SUBDIVISION ONE OF THIS SECTION
 AND  WOULD  REQUIRE  AN  INCREASE  OF MORE THAN TEN PERCENT OF THE PRIOR
 YEAR'S COMMON EXPENSE ASSESSMENT, THE DEFICIENCY SHALL BE MADE  ADEQUATE
 WITHIN  TEN  FISCAL YEARS OR THE PROJECTED DATE PREDICTED BY THE RESERVE
 STUDY BY WHICH ABSENT INCREASED FUNDING,  THE  BALANCE  IN  THE  ASSOCI-
 ATION'S RESERVE ACCOUNT WOULD FALL BELOW ZERO. IN EITHER CASE, THE ANNU-
 AL  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 TEN PERCENT IN THE ANNUAL COMMON EXPENSE ASSESSMENT.
   7. IF A CONDOMINIUM OR COOPERATIVE HOUSING ASSOCIATION DOES  NOT  HAVE
 AN ADEQUATE RESERVE FUND AS DESCRIBED IN SUBDIVISION ONE OF THIS SECTION
 AND  WOULD  REQUIRE  AN  INCREASE  OF LESS THAN TEN PERCENT OF THE PRIOR
 YEAR'S COMMON EXPENSE ASSESSMENT, THE DEFICIENCY SHALL BE MADE  ADEQUATE
 WITHIN THREE FISCAL YEARS.
   8. ALL CAPITAL RESERVE FUND STUDIES COMPLETED PURSUANT TO THIS SECTION
 SHALL  BE  REVIEWED  ON AN ANNUAL BASIS BY THE BOARD OF MANAGERS AND THE
 PROPERTY MANAGEMENT COMPANY TO DETERMINE IF THE RESERVE FUND BALANCE  IS
 ADEQUATE TO COVER ESTIMATED COSTS FOR THE YEAR.
   9.  ANY  CAPITAL RESERVE STUDY COMPLETED PURSUANT TO THIS SECTION MUST
 BE FILED WITH THE OFFICE OF THE ATTORNEY GENERAL WITHIN  SIXTY  DAYS  OF
 COMPLETION.  THE ATTORNEY GENERAL SHALL HAVE THE AUTHORITY TO REVIEW AND
 AUDIT SUCH DOCUMENTS AND COMPEL A PROPERTY MANAGEMENT COMPANY, BOARD  OF
 MANAGERS,  OR  ANY  CONDOMINIUM  OR  COOPERATIVE  HOUSING ASSOCIATION TO
 COMPLETE A CAPITAL RESERVE STUDY IF THEY HAVE NOT DONE  SO  PURSUANT  TO
 THIS SECTION.
   § 2. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.