§514B-148 Association fiscal matters; budgets and replacement reserves. (a) The budget required under section 514B-144(a) shall include a summary with at least the following details:
The budget summary shall contain all required information without referring the reader to other portions of the budget.
(b) The association shall assess the unit owners to either fund a minimum of fifty per cent of the estimated replacement reserves assessments or fund one hundred per cent of the estimated replacement reserves assessments when using a cash flow plan; provided that a new association need not collect estimated replacement reserves assessments until the fiscal year that begins after the association's first annual meeting. For each fiscal year, the association shall collect the amount assessed to fund the estimated replacement reserves assessments for that fiscal year, as determined by the association's plan.
(c) The association shall compute the estimated replacement reserves assessments by a formula that is based on the estimated life and the estimated capital expenditure or major maintenance required for each part of the property. The estimated replacement reserves assessments shall include:
(d) No association or entity that, and no person who, makes a good faith effort to calculate the estimated replacement reserves assessments required by this section shall be liable in the event that the estimate subsequently proves incorrect.
(e) Except in emergency situations or with the approval of a majority of the unit owners, a board may not exceed its total adopted annual operating budget by more than twenty per cent during the fiscal year to which the budget relates. Before imposing or collecting an assessment under this subsection that has not been approved by a majority of the unit owners, the board shall adopt a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, and the resolution shall be distributed to the members with the notice of assessment.
(f) The requirements of this section shall override any requirements in an association's declaration, bylaws, or any other association documents relating to preparation of budgets, calculation of replacement reserve requirements, assessment and funding of replacement reserves, and expenditures from replacement reserves with the exception of:
(g) Any unit owner shall have standing to bring an action alleging a violation of this section against an association that the unit owner is a member of, and may seek an injunction to enforce compliance with this section by the association's board.
(h) As used in this section:
"Capital expenditure" means an expense that results from the purchase or replacement of an asset whose life is greater than one year, or the addition of an asset that extends the life of an existing asset for a period greater than one year.
"Cash flow plan" means a minimum thirty-year projection of an association's future income and expense requirements to fund fully its replacement reserves requirements each year during that thirty-year period, except in an emergency; provided that it does not include a projection of special assessments or loans during that thirty-year period, except in an emergency.
"Emergency situation" means any extraordinary expenses:
"Independent reserve study preparer" means any organization, company, or individual with a reserve study certification from an industry organization.
"Major maintenance" means an expenditure for maintenance or repair that will result in extending the life of an asset for a period greater than one year.
"Replacement reserves" means funds for the upkeep, repair, or replacement of those parts of the property, including but not limited to roofs, walls, decks, paving, and equipment, that the association is obligated to maintain. [L 2004, c 164, pt of §2; am L 2005, c 93, §7; am L 2022, c 62, §8; am L 2023, c 199, §1; am L 2025, c 157, §2]