New Jersey's DCA says it does not oversee association reserve compliance
New Jersey's DCA says it does not oversee association reserve compliance
2026-09-15 · New Jersey · Regulation
New Jersey passed the biggest community-association finance statute in its history and then declined to regulate it. The Department of Community Affairs says so itself, in the six-question FAQ that is the only guidance it has published on the subject.1
The question, and the answer
Question six of the FAQ is: "Does the New Jersey Department of Community Affairs oversee and review our association's capital reserve accounts and balances?"
The answer opens: "The New Jersey Department of Community Affairs (DCA) does not oversee owner-controlled associations relative to the association board's compliance with N.J.S.A. 45:2A-44.2 and N.J.S.A. 45:2A-44.3."
It continues that boards are "managed and operated by duly elected owners, who have a fiduciary obligation to all unit owners," and that a decision not to comply "could expose the association as well as the individual association board members to civil liability to all unit owners."
Later in the same answer: "The DCA has no statutory jurisdiction over the business judgment decisions of association boards relative to the spending of association funds or the issuance of assessments to unit owners." And, for owners who disagree with their board or its consultants: they "will need to institute civil litigation to resolve any disputes."
There are no implementing rules either
The FAQ is guidance. It carries no New Jersey Administrative Code citation and no New Jersey Register citation, because it went through no notice-and-comment process. Nothing else exists: DCA's own index of rule proposals and adoptions from 2023 through September 2026 contains no rulemaking addressing the Structural Integrity Act, capital reserve studies, or reserve funding.
The one rulemaking DCA did do, it did without changing anything
N.J.A.C. 5:26 — the Planned Real Estate Development Full Disclosure Act rules, including Subchapter 8 on community associations — was scheduled to expire on April 4, 2025. DCA readopted the entire chapter without change, effective March 3, 2025, with a new expiration date of March 3, 2032.2
That readoption came fourteen months after the 2023 law amended PREDFDA and thirteen months after an Appellate Division decision reversed parts of the Radburn election regulations. No conforming amendments were made. Seven more years were locked in.
Where DCA does claim jurisdiction, and where it does not
The Department's long-standing Association Regulation Initiative packet is unusually candid about its limits. It enforces open-meeting notice requirements and unconditional access to financial records — access that "may not be denied because an owner is not paid up in association fees or has any outstanding violations."
Beyond that, the disclaimers stack up. On board conduct: "this agency, prosecutors, including the State's Attorney General, do not act on owner complaints regarding allegations of board misconduct such as acting irresponsibly or contrary to the bylaws." On minutes: "There is no standard this agency enforces as to the content of the minutes." On audits: "The law does not mandate annual audits for owner-controlled associations and this agency has no authority to mandate them." On fraud: that goes to the county prosecutor, and "This agency has no jurisdiction over such matters."3
What this means for an owner with a reserve complaint
An owner who believes their board's reserve study is inadequate, or that its funding plan does not meet the statute, has no administrative forum. DCA's stated route is: review the governing documents to check the assessment was properly authorised, petition the board jointly to reconsider, and if that fails, litigate.
For most owners facing a several-hundred-dollar monthly increase, the cost of the third step exceeds the amount in dispute. That asymmetry is the practical content of the statute, and it explains why the pressure in 2026 has gone to Trenton rather than to a regulator: there is no regulator to go to.
One pending bill would nudge this
S4508, the Senate version of the 35-year reserve plan proposal, contains a section directing DCA to publish updated compliance guidance under the Administrative Procedure Act. A sponsor legislating a guidance document into existence is a reasonable measure of how thin the administrative record currently is.
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