How the New NJ Reserve Law Could Lower Your Condo or HOA Assessments.

Do We Have to Redo Our Reserve Study Under the SB3992 2025 NJ Reserve Study Law?

The short answer: most likely, yes.

Even if your association recently completed a reserve study, the Updated New Jersey Reserve Requirements 2025 (SB3992, effective August 21, 2025) redefined what it means to be compliant. Every association’s 2026 budget must now meet these new legal standards.

Here’s what’s changed:

Baseline Funding Is Now the Standard – “Adequacy” means your 30-year reserve plan can never drop below zero. Every reserve study must include a baseline funding option. In some cases, this can actually lower your required contributions compared to older studies.
New 85% Funding Option – Existing associations may temporarily fund at 85% of the baseline plan for up to 5 years, but only with bold-font disclosures to owners and buyers about when a special assessment or loan will be needed.

📌 What this means for your community:
If your reserve study was prepared under the old rules, it likely doesn’t include the legally required baseline option or the new 85% disclosure track. To avoid compliance issues—and to see if your contributions can actually be reduced—it’s smart to have your study audited or updated now.

👉 Bottom line: Yes, you need to update your reserve study to include a baseline funding plan. The benefit? Your community may be able to lower dues in the short term if you use the 85% option with proper disclosures.

How does the 85% Reserve Funding in NJ work?

Associations can now fund at 85% of any of the recommended reserve plans for up to five fiscal years.

Why does this matter? Because it gives boards a new tool to manage short-term affordability. Instead of maxing out contributions every year to fully cover upcoming projects, boards can legally fund at 85% and plan a special assessment or loan within the next five years. Owners must be notified in bold print, and buyers must receive the same disclosure at closing, but this transparency gives everyone time to plan.

Example: $160,000 Capital Repair

Imagine your community has a $160,000 roof replacement coming up in the next five years. Under the old approach, you would need to divide that amount across five years—adding $32,000 per year to the budget. That often means significant increases to owner contributions.

Under the new NJ association reserve requirement 2025, the board could instead:

Fund at 85% of the recommended contributions, keeping annual dues lower.
Plan a special assessment in year five for the remaining balance.
Give owners clear notice in advance, allowing them to save or prepare for financing.

This structure may reduce financial stress on owners today while still ensuring the project gets done on time.

Can NJ condos lower reserve contributions under the new law?

For many communities, the challenge isn’t just having a reserve plan; it’s keeping it affordable for owners. The required baseline funding and 85% option provides breathing room, as long as boards communicate transparently and stick to the five-year limit. It can help:

Stabilize dues by avoiding steep yearly increases.
Give owners time to prepare for a special assessment.
Align costs with project timing rather than front-loading all contributions.

Stone Building Solutions Free NJ Reserve Audit

At Stone Building Solutions, we provide FREE Reserve Audits.

Our team of engineers and reserve specialists will:

Review your study at no cost to see if we can provide reserve relief.
Provide discounted rates for reserve revisions.
Help boards communicate disclosures and project timelines clearly to owners.

Contact stonebldg.com to find out how the Updated New Jersey Reserve Requirements 2025 may give your community the flexibility to fund smarter, protect property values, and even lower assessments in the short term.