New Jersey § 46:8b-24

§ 46:8b-24.

(a) Damage to or destruction of any improvements on the condominium property or any

part thereof or to a common element or elements or any part thereof covered by insurance

required to be maintained by the association shall be repaired and restored by the

association using the proceeds of any such insurance. The unit owners directly affected shall be assessed on an equitable basis for any

deficiency and shall share in any excess. (b) If the proceeds of such insurance shall be inadequate by a substantial amount

to cover the estimated cost of restoration of an essential improvement or common element

or if such damage shall constitute substantially total destruction of the condominium

property or of one or more of the buildings comprising the condominium property or

if 75% of the unit owners directly affected by such damage or destruction voting in

accordance with the procedures established by the by-laws shall determine not to repair

or restore, the association shall proceed to realize upon the salvage value of that

portion of the condominium property so damaged or destroyed either by sale or such

other means as the association may deem advisable and shall collect the proceeds of

any insurance. Thereupon the net proceeds of such sale, together with the net proceeds of such

insurance shall be considered as one fund to be divided among the unit owners directly

affected by such damage or destruction in proportion to their respective undivided

ownership of the common elements. Any liens or encumbrances on any affected unit shall be relegated to the interest

in the fund of the unit owners. (c) The master deed or the by-laws may make other and different provision covering

the eventualities set forth in paragraphs (a) and (b) of this section or covering

other results of damage or destruction to any part or all of the condominium property,

notwithstanding the provisions of paragraphs (a) and (b). If the master deed or by-laws shall require insurance against fire and other casualty

with respect to individual units, it shall also provide for the application of the

proceeds and the rights and obligations of unit owners in case of damage or destruction.