Section 559.511. Reserve fund for major repairs and replacement of common elements.

(1) The bylaws shall provide that the association of co-owners shall maintain a reserve fund for major repairs and replacement of common elements in accordance   with  section  105  of   the  act.   The   co-owners' association shall maintain a reserve fund which, at a minimum, shall be equal to 10% of the association's current annual budget  on  a  noncumulative basis.

(2)   The funds contained in the reserve fund required to be established by section 105 of the act shall only be used for major repairs and replacement of common elements.

(3)   There shall be set aside the amount of funds required by subrule (1) of this rule by the time of the transitional control date. The developer shall be liable for any deficiency in this amount at the transitional control date.

(4)   The following statement shall be contained in the bylaws: "The minimum standard required by this section may prove to be inadequate for a particular project. The association of co-owners should carefully analyze their condominium project to determine if a greater amount should be set aside, or if additional reserve funds should be  established  for   other purposes."

History: 1979 AC; 1985 AACS.