SmartProperty® helps New Jersey condominium associations, HOAs and cooperatives meet one of the country’s most demanding reserve laws: a professional study every five years, a 30-year funding plan and funding at 100% of a plan, or temporarily 85%, under rules rewritten in August 2025.
Every 5 yearsA study by a Reserve Specialist or a New Jersey-licensed engineer or architect
5 fiscal yearsMaximum for the temporary 85% funding option after August 21, 2025
Jan 4, 2027Fannie Mae’s 15% reserve minimum takes effect for condo loans
WHAT NEW JERSEY REQUIRES
New Jersey requires the study. Since 2025, it also defines “adequate.”
The Structural Integrity Law (P.L.2023, c.214) and the S3992 amendments signed August 21, 2025 apply to nearly every association governed by the Planned Real Estate Development Full Disclosure Act.
N.J.S.A. 45:22A-44.2 · 44.3
A study, a plan and a funding obligation
Condominiums, HOAs, cooperatives and master associations must commission a capital reserve study, unless they hold less than $25,000 in common area capital assets.
It must be performed or overseen by a CAI Reserve Specialist or a New Jersey-licensed engineer or architect, at least once every five years.
Every study needs a 30-year baseline plan whose lowest balance is $0, and “adequate” now means never projecting below $0.
Existing associations fund 100% of a plan in the latest study, or temporarily 85% with owner and buyer notices.
S3992 · EFFECTIVE AUGUST 21, 2025
The 85% option and what was repealed
The 85% option is open only to associations that existed on January 8, 2024, for no more than five fiscal years after August 21, 2025.
Before adopting the budget, the board must send every owner a 20-point bold notice with the year and amount of the anticipated special assessment or loan. Sellers give buyers a copy before a contract is signed.
The 2-year and 10-year cure rules and the procedure for borrowing from a component’s reserve were repealed.
Meeting the statute isn’t the same as keeping owners financeable.
The 85% notice is public
The notice names the year and amount of an anticipated special assessment, and buyers receive it. The study has to model that 85% scenario, and lenders can read the notice as a sign of underfunding.
Baseline funding can pass the state and fail the lender
Baseline funding is the state’s legal minimum, but Fannie Mae no longer accepts it as the reserve study alternative. For loans dated on or after January 4, 2027, budget 15% of assessment income or fund the highest plan in a study under three years old.
Structural inspections feed the funding plan
For covered buildings, the study must budget for the inspections and any corrective maintenance the structural engineer’s report requires. Many associations sequence the inspection first, then update the study to price its findings.
HOW SMARTPROPERTY HELPS
Compliance is the floor. Funding stability is the goal.
Full reserve studies and updates
A site-inspected study to start, then updates as costs and conditions change, so the board always has a current plan.
A plan that stays current
The Living Reserve Study® updates as projects are completed and costs change, so your plan is ready for the next update or budget.
Funding options the board can compare
Model higher contributions, special assessments, loans or lines of credit side by side before you take a recommendation to owners.
Numbers you can explain
Atlas shows the cost data and useful-life assumptions behind every figure, so boards can answer owner questions with confidence.
TALK WITH SMARTPROPERTY ABOUT NEW JERSEY
Get your New Jersey reserve plan on solid ground.
See how the Living Reserve Study® works for your community, or tell us about your association and we’ll put together a proposal.
