New Jersey Condo Due Diligence Checklist

Where New Jersey due diligence deserves the most attention

Legal Framework

New Jersey uses a two-statute structure (unlike Colorado's single unified CCIOA), plus a layer of DCA regulations:

Reserve Studies and Reserve Funding

If bringing reserves to adequacy would require more than a 10% increase in the prior year's common-expense assessment, the deficiency must be cured within the earlier of 10 fiscal years or the year the reserve balance is projected to hit zero, via equal annual increases.; If it would require less than a 10% increase, the deficiency must be cured within 2 fiscal years.; No reserve study on file (post-Jan 2025): Likely non-compliance with state law, exposing the board to civil liability AND signaling deferred maintenance and looming catch-up funding.; Stud…

Structural Inspections and Building Safety

New Jersey now has a statewide mandatory structural inspection law — one of only two such state laws in the country (after Florida).

Insurance Requirements and Insurance-Market Risk

Property/casualty insurance against fire and other casualties "normally covered under broad-form fire and extended coverage" policies, covering all common elements and all structural portions of the condominium property (the "master policy"); and; Liability insurance for personal injury, death, and property damage occurring in the common elements.; The master deed/bylaws may also require the association to protect mortgagees under the policies. Premiums are a common expense shared by all owners. *(N.J.S.A.

Resale Disclosures and Buyer Cancellation Rights

New Jersey's resale-disclosure regime is less unified than states with a single statutory "resale certificate" form. It is a patchwork of the Condominium Act, PREDFDA, and contract practice.

Assessments, Special Assessments, and Borrowing

Regular assessments: Under N.J.S.A. 46:8B-15, the association may levy and collect assessments for common expenses per the annual budget, with interest, late fees, and reasonable attorney's fees if authorized by the master deed/bylaws. The board adopts the budget; owner-approval thresholds depend on the governing documents. *(N.J.S.A. 46:8B-15; HNW Law.)*; Special assessments: Boards may levy special/emergency assessments for unbudgeted needs.