New Jersey guide
New Jersey reserve studies
New Jersey went from having no reserve mandate to one of the most prescriptive reserve regimes in the country in a single law. N.J.S.A.
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45:22A-44.2 (added by S2760 in 2024, amended by S3992 in 2025) requires nearly every condo, co-op, and HOA to commission a professional capital reserve study with a 30-year funding plan — and N.J.S.A. 45:22A-44.3 requires associations to fund reserves to "adequacy," with mandatory catch-up schedules for those that were underfunded. For a New Jersey buyer, the reserve study is no longer an optional best practice; it is a statutory document whose absence signals likely non-compliance and whose contents predict mandated dues increases.
What N.J.S.A. 45:22A-44.2 requires
The study must follow the CAI National Reserve Study Standards (or a similar recognized standard) and be prepared or overseen by a CAI-credentialed Reserve Specialist or a New Jersey-licensed engineer or architect — board members may not prepare it. It must cover current reserve balances, a physical analysis of common-area components, the costs of maintaining structural integrity, the cost of future structural inspections and any corrective maintenance, and a proposed 30-year funding plan. Associations without a recent study had to complete an initial one by January 8, 2025, and must update at least every five years. Associations with under $25,000 in common-area capital assets are exempt.
Mandatory funding and catch-up schedules
Under N.J.S.A. 45:22A-44.3, the association must fund reserves to "adequacy" so it can repair or replace capital assets without a special assessment or loan. Associations underfunded as of the law's effective date must cure the deficiency through equal annual increases: within two years if reaching adequacy requires a less-than-10% increase, or over up to ten years (or the year reserves would hit zero, whichever is earlier) if it requires more than 10%. This functions like a built-in, multi-year dues increase that a buyer inherits.
The 2025 S3992 adequacy and 85% option
The 2025 amendment (S3992, P.L. 2025, c. 95) defined "adequacy" as a funding plan in which the projected reserve balance never falls below zero across the 30-year projection — a cash-flow approach rather than 100% funded — and allowed associations to limit contributions to 85% of the selected funding plan for five years. That relief lowers current dues but leaves a thinner cushion: a component failing earlier than projected can still trigger a special assessment or loan. Note whether the association used the 85% option.
Reading the study for buyer risk
No study on file after January 2025 signals likely non-compliance plus deferred maintenance. A study showing a large deficiency means scheduled, mandated dues increases. A study that omits the required structural-inspection and corrective-maintenance costs is incomplete. Read the study against the budget to see whether the catch-up funding is actually reflected in the dues you will pay.
New Jersey legal references
- N.J.S.A. 45:22A-44.2 — Capital reserve study (preparer, contents, deadlines)
- N.J.S.A. 45:22A-44.3 — Reserve funding adequacy and catch-up schedules
- P.L. 2025, c. 95 (S3992) — Adequacy definition and 85% funding option
Informational only. Not legal advice. Always confirm against current statute and counsel.
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Find a New Jersey specialist →Reviewer's checklist
- Confirm a reserve study exists and is current (initial study was due January 8, 2025)
- Confirm a CAI Reserve Specialist or NJ-licensed engineer or architect prepared it
- Confirm the study includes a 30-year funding plan
- Check whether the plan funds to adequacy (balance never below zero) per S3992
- Identify any mandated catch-up funding (2-year or up-to-10-year schedule)
- Confirm the study includes future structural-inspection and corrective-maintenance costs
- Note whether the association used the S3992 85% contribution option
- Confirm the study is set to update at least every five years
- Read the budget to confirm the catch-up funding is reflected in dues
- Confirm the $25,000 capital-asset exemption does not understate true scope
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