New Jersey HOA Reserve Studies

Section 1: Overview — Reserve study requirements in New Jersey

New Jersey now requires its condominium and cooperative associations — along with other planned real estate developments that PREDFDA governs — to obtain capital reserve studies, update them on a schedule, and fund their reserves accordingly. Separately, the state requires periodic structural inspections of buildings whose primary load-bearing systems are built of concrete, masonry, steel, or hybrid construction. Both duties come from a structural-safety law the Legislature enacted in 2024.¹ That law is P.L. 2023, c. 214, which started as Senate Bill S2760 (the Assembly companion was A4384). The Governor signed it on January 8, 2024, and it took effect immediately; the Legislature then amended it through P.L. 2025, c. 132 (S3992), signed August 21, 2025.^1,2 The 2024 law did not create a standalone HOA code. Instead, it supplemented the Department of Community Affairs statutes — codifying the structural-inspection rules at N.J.S.A. 52:27D-132.2 through 132.5 — and amended the Planned Real Estate Development Full Disclosure Act, or PREDFDA, at N.J.S.A. 45:22A-21 et seq., adding the reserve provisions at N.J.S.A. 45:22A-44.2 and 44.3. All of it sits against the backdrop of the older Condominium Act, N.J.S.A. 46:8B-1 et seq.³ The Department of Community Affairs administers PREDFDA and houses the Bureau of Housing Inspection, but it has said plainly that it does not oversee owner-controlled associations' reserve decisions, which leaves enforcement to civil litigation.⁵ New Jersey is a recent addition to the hard-mandate states, joining Florida and Maryland in adopting binding reserve-study and inspection rules after the June 24, 2021 partial collapse of Champlain Towers South in Surfside, Florida, which killed 98 people.⁶ The sections that follow lay out the reserve-study mandate, the structural-inspection requirement tied to it, the statutes underneath both, and the compliance, disclosure, and enforcement duties — with each operative value checked against the enacted law as of June 22, 2026.

Section 2: The reserve framework under New Jersey law

2A. The reserve-study mandate under the 2024 law

The reserve-study mandate reaches every "association of a planned real estate development." The Department of Community Affairs reads that phrase to cover condominiums, cooperatives, and other PREDFDA communities, HOAs included — no matter the building's construction type, and no matter whether the association also owns a "covered building" that needs a structural inspection.⁵ The law carves out just one exemption: an association with less than $25,000 in total common-area capital assets.³ An association that had not done a reserve study in the five years before the January 8, 2024 effective date had one year to complete one — by January 8, 2025. An association formed after that date must finish its first study within two years after unit owners elect a majority of the executive board.³ From there, a qualified professional must update and review the study at least once every five years.² Each study has to follow the latest edition of the CAI National Reserve Study Standards (or comparable standards from another recognized national organization), and a reserve specialist credentialed through the Community Associations Institute — or a New Jersey-licensed engineer or architect — must perform or oversee it. Board members may not prepare the study themselves.^3,5 The study has to account for the association's reserve balances, its expected income and expenses, the physical condition of the common-area components it must maintain, the cost of repairing or replacing those components, and reasonable estimates for future studies, updates, the periodic structural inspections, and any corrective maintenance — all rolled into a 30-year funding plan.³ On the money itself, the association must obtain and fund reserves "adequate" to repair or replace those capital assets without reaching for a special assessment or a loan; the 2025 amendment defines "adequate" as a 30-year plan whose reserve balance never falls below zero.^1,2 That amendment also scrapped the 2024 law's original 10-fiscal-year and two-fiscal-year catch-up schedules and replaced them with a transition rule: an association that existed on January 8, 2024 may fund either a plan set out in its study or 85% of a board-selected plan for up to five fiscal years, and then must fully fund a compliant plan.² Enforcement runs through unit-owner civil litigation and board fiduciary liability, not a DCA penalty regime.⁵ These values were verified against the enacted text on June 22, 2026.

2B. The coupled structural-inspection requirement and the underlying statutes

The structural-inspection requirement stands apart from the reserve study, and it reaches only "covered buildings" — residential condominium or cooperative buildings whose primary load-bearing system is concrete, masonry, steel, or hybrid construction, including heavy timber and buildings with podium decks. The law excludes frame-built, ISO Type 1 structures, primarily rental buildings, and single-family homes, and a building's height does not change whether it is covered.^1,5 The first inspection of the primary load-bearing system must happen within the earlier of 15 years from the certificate of occupancy or 60 days after observable damage. For buildings that got their certificate of occupancy before the effective date, a building 15 years or older by January 8, 2024 had to be inspected within two years — by January 8, 2026 — while a newer building must be inspected within one year of its 15th anniversary.¹ The inspector's report sets the next inspection date, which can fall no later than 10 years after the first inspection; after that, inspections may be no more than five years apart.¹ A New Jersey-licensed engineer who meets the statutory "structural inspector" definition must perform the inspection, using American Society of Civil Engineers protocols — a different qualification from the one the reserve-study preparer needs.¹ The two requirements connect because the reserve study must build in the cost of the periodic structural inspections and of any corrective maintenance the inspector flags, so the structural findings feed straight into reserve planning for structural components.³ As for the underlying statutes, the 2024 law supplemented the Department of Community Affairs statutes — placing the inspection rules at N.J.S.A. 52:27D-132.2 through 132.5 — and amended PREDFDA (N.J.S.A. 45:22A-21 et seq.) to add the reserve obligations at N.J.S.A. 45:22A-44.2 and 44.3 and to authorize emergency assessments for corrective maintenance at N.J.S.A. 45:22A-45a. PREDFDA stays a developer-disclosure and registration statute that the Department administers, now carrying these reserve and inspection duties as well.^1,3 The Condominium Act, N.J.S.A. 46:8B-1 et seq., supplies the older framework that governs condominium creation, common elements, and association duties.⁴ The Department has not yet adopted reserve-specific regulations under the 2024 law, and practitioners expect future rulemaking to standardize definitions and coordinate the engineer and reserve-specialist roles.⁵

2C. The master deed, corporate law, and fiduciary backstop

The statutory reserve and inspection duties sit above the recorded master deed and bylaws. The 2024 law expressly lets the executive board — notwithstanding what a declaration, master deed, or bylaws might say — adopt assessments or take out loans without owner consent to fund corrective maintenance of the primary load-bearing system, as long as an engineer or architect provides written findings of a hazard, a violation, or escalating costs.¹ Where the statute and the governing documents collide on these obligations, the statute wins, and the master deed governs only what the statute leaves open. At the corporate level, most New Jersey associations organize as nonprofit corporations under Title 15A, the New Jersey Nonprofit Corporation Act, and their boards owe fiduciary duties to unit owners.⁷ New Jersey has not adopted the Uniform Common Interest Ownership Act; it works under the Condominium Act, PREDFDA, and the 2024 structural-safety law. The practical upshot is straightforward: in New Jersey, reserve studies, reserve funding, and structural inspections are statutory duties for covered associations. The master deed and the board's business judgment operate inside that mandatory framework rather than serving as the source of the obligation.

Section 3: Compliance obligations

A. Study and inspection obligations

Every PREDFDA association above the $25,000 asset threshold — condominiums, cooperatives, and other covered communities — must obtain a capital reserve study and update it at least every five years, prepared or overseen by a CAI-credentialed reserve specialist or a New Jersey-licensed engineer or architect.³ Separately, condominium and cooperative associations that own a "covered building" must obtain a structural inspection of the primary load-bearing system within the earlier of 15 years from the certificate of occupancy or 60 days after observable damage (pre-2024 buildings 15 years or older by January 8, 2026), then re-inspect on the inspector's schedule — no later than 10 years after the first inspection and no more than five years apart after that — using a New Jersey-licensed engineer.¹ The reserve-study duty applies to every covered community; the inspection duty applies only to condominium and cooperative "covered buildings."⁵

B. Funding obligations

The association must fund reserves to the "adequate" standard — a 30-year plan whose balance never drops below zero — and that applies to every covered PREDFDA community.² Existing associations may fund 85% of a chosen plan for up to five fiscal years; associations formed after January 8, 2024 must fund a full plan drawn from the study.²

C. Disclosure obligations

A board that elects the 85% funding option must notify every unit owner in 20-point bold font, stating the reduced funding level and the year and amount of any special assessment or loan it expects to follow.² A unit owner who sells during an 85% period must hand the buyer a copy of that notice before signing the contract.² Under PREDFDA, developers must make structural and reserve reports available to prospective buyers.¹

D. Account and governance obligations

The association must hold its funds separately, in the association's name, under the Condominium Act, commingling reserve funds only for investment purposes and never letting the combined balance fall below the reserve amount.⁴ The board's duties under the 2024 law — obtaining the study, funding reserves, and ordering corrective maintenance — apply to condominiums, cooperatives, and other covered PREDFDA communities, and fiduciary liability and civil litigation enforce them, not DCA penalties.⁵

Section 4: Recent legislative and judicial activity

A. Recent bills

Two enacted laws built the current framework: the 2025 amendment that defined "adequate" funding, and the 2024 statute that created the mandate in the first place.

B. Recent appellate rulings

No published or unpublished New Jersey Appellate Division or Supreme Court opinion from 2023 through June 2026 takes up the 2024 reserve law, capital reserve studies, or reserve funding under that law. The 2024 Appellate Division decision that practitioners sometimes cite in this area — In the Matter of the Challenge of the Community Associations Institute–New Jersey Chapter, Inc., to Amendments to N.J.A.C. 5:26, Docket No. A-2241-21 — concerns the Radburn election regulations and does not touch reserves.⁸

C. Active legislative debates and implementing rulemaking

A pending bill, A318, would narrow the 2024 law's reach to residential buildings three or more stories tall and shrink the reserve scope to the primary load-bearing system.⁹ The Department of Community Affairs has not yet adopted reserve-specific regulations, and practitioners are watching the New Jersey Register for rulemaking that would standardize definitions and coordinate the engineer and reserve-specialist roles.⁵

Section 5: National positioning and related coverage

New Jersey sits among the recent hard-mandate states that adopted reserve-study and inspection rules after the Champlain Towers South collapse. Florida, under Fla. Stat. § 553.899 (enacted by SB 4-D, signed May 26, 2022), requires milestone structural inspections for condominium and cooperative buildings three or more stories tall — at 25 years of age if the building sits within three miles of the coastline, otherwise at 30 years, and every 10 years after that — and requires a Structural Integrity Reserve Study at least every 10 years under Fla. Stat. § 718.112(2)(g).⁶ Maryland's House Bill 107, effective October 1, 2022, extended the reserve-study requirement statewide (it had covered only Prince George's and Montgomery Counties), required non-county associations to comply by October 1, 2023, told associations to budget the amount the most recent reserve study recommends, and gave them a three-fiscal-year window to reach the recommended funding level.¹⁰ California's longer-standing regime, under Civil Code section 5550(a), requires "at least once every three years" a "reasonably competent and diligent visual inspection of the accessible areas of the major components that the association is obligated to repair, replace, restore, or maintain," with the funding plan covering components that have an expected remaining life of 30 years or less — but it does not pair that with a structural-safety inspection mandate.¹¹ New Jersey, like Florida, couples a reserve-study mandate with a separate structural-inspection requirement, a pairing that Maryland and California do not impose. For a multi-state operator running New Jersey condominium and cooperative portfolios, the practical takeaway is this: New Jersey compliance means running two separate professional tracks — a reserve study and, for covered buildings, a structural inspection — on different intervals and with different qualified professionals.

HOA Weekly's New Jersey Reserve Studies coverage updates quarterly as the Legislature, the Department of Community Affairs, and the New Jersey courts act, with particular attention to implementing regulations under the 2024 law. Federal frameworks — including the FHA, ADA, FDCPA, SCRA, and the OTARD rule — also apply to New Jersey associations regardless of the state framework.

1. P.L. 2023, c. 214 (S2760), An Act concerning structural integrity regulation for certain residential structures, New Jersey Legislature ↩
2. P.L. 2025, c. 132 (S3992), An Act concerning capital reserve funding requirements for certain planned real estate developments, New Jersey Legislature ↩
3. N.J.S.A. 45:22A-44.2 to -44.3, reproduced in N.J. Dep't of Cmty. Affairs, Structural Integrity Law Capital Reserve Studies and Funding FAQ ↩
4. N.J.S.A. 46:8B-1 et seq. (New Jersey Condominium Act) ↩
5. N.J. Dep't of Cmty. Affairs, Capital Reserve Studies and Funding FAQ (DCA oversight and covered-building scope) ↩
6. Fla. Stat. § 553.899 (milestone inspections); Fla. S.B. 4-D (2022) ↩
7. N.J.S.A. 15A:1-1 et seq. (New Jersey Nonprofit Corporation Act) ↩
8. In re Challenge of CAI–N.J. Chapter to Amendments to N.J.A.C. 5:26, No. A-2241-21 (N.J. Super. Ct. App. Div. 2024) ↩
9. Assemb. B. 318, New Jersey Legislature (2026 Reg. Sess.) (introduced) ↩
10. Md. H.B. 107 (2022 Reg. Sess.), Maryland General Assembly ↩
11. Cal. Civ. Code § 5550, California Legislative Information ↩