New Jersey Condo & HOA Reserve Studies Updated 2025 Requirements

Yes. Even if your association already completed a reserve study, you must follow the new law. Your 2026 budget must meet the legal standards of S-3992, the Updated New Jersey Reserve Requirements 2025, which took effect on August 21, 2025.

The law now defines “adequacy” as baseline funding—a 30-year plan that never allows the reserve balance to fall below zero. All reserve studies going forward must include a baseline funding option in order to be compliant with the NJ Association reserve requirement 2025.

The updated law also completely eliminated the old glide path system. Instead, it introduced a temporary 85% funding option, which may help some communities manage costs and keep annual assessments lower while planning for special assessments or loans within five years.

The Updated New Jersey Reserve Requirements 2025 (S-3992) took effect immediately upon being signed into law on August 21, 2025. This means all New Jersey condominium associations and HOAs must now comply with the new NJ association reserve requirement 2025, including the shift to baseline funding and the option for temporary 85% funding with mandatory disclosures.

It’s important to note that the original reserve study law in New Jersey, P.L. 2023, c.214 (S-2760/A-4384), became effective on January 8, 2024. The 2025 update (S-3992) amends and replaces portions of that law, establishing the new compliance standards associations must follow today.

Under the NJ association reserve requirement 2025, every association must meet baseline funding (a 30-year plan that never projects the reserve balance below $0). If you can’t fully fund at baseline:

You may temporarily fund at 85% of the reserve study’s recommended plan for up to five fiscal years (existing associations only). 

When using the 85% option, the board can plan a special assessment or loan to cover the shortfall within that five-year window. The board must provide strict disclosures to all unit owners and new buyers:

• Send owners a 20-point, bold-font notice stating the association is funding at 85%.
• The notice must include the anticipated year and amount of the special assessment or loan.
• Provide the same notice to every buyer before closing.

After five years, the association must be adequately funded (meaning baseline funding at minimum). The glide path is gone; this 85% route is only a temporary alternative, and it comes with mandatory transparency.

Under the Updated New Jersey Reserve Requirements 2025 (S-3992), the old approach of “we’ll just pay with a special assessment later” is no longer allowed.

• New communities must immediately fund reserves at the law’s definition of “adequate funding,” which is the baseline method — a 30-year plan that never lets reserves fall below zero.

• Existing communities have up to five years to reach that baseline standard. During this transition, they may choose the temporary 85% option, but any shortfall must be closed with a special assessment or loan within that five-year window.

• After five years, every condo and HOA must be fully compliant with adequate funding — no exceptions.

Reserve studies are for all condos, all retirement communities, Townhomes  over 100 units and single family homes over 100 units.

A NJ Reserve Study must include:

• Reserve fund balances;
• Anticipated Income and Expenses;
• Analysis of physical condition of common areas;
• Anticipated maintenance or repair costs, including all items for primary structural members (before, studies included wearable surfaces only);
• Cost estimates including replaced or corrective maintenance expenses  and cost of future studies, updates and structural inspections;
• Can not include special assessments or loans as a long range plan;
• The study is to be written to the latest CAI National Reserve study Standards (or similar).

A reserve study in New Jersey must not include:

A New Jersey reserve study should not include special assessments or loans in the 30-year funding plan, the association must collect enough money yearly that they have the funds to complete repairs based on the timelines of the reserve study.

Except that in those cases in which a capital asset reaches the end of its established useful life earlier than predicted by the reserve study, nothing in the law is intended to prevent the imposition of a special assessment or obtaining a loan.

• Reserve Specialist, RS (designated by CAI or similar);
• NJ Engineer;
• NJ Architect.

If an association has not had a qualified reserve study in the last 5 years, then it must be completed by Jan 8, 2025.

New associations should complete a qualified study after the board is established, but not longer than 2 years.

“Covered buildings” must be reviewed at least every 5 years by a licensed engineer, architect or certified Reserve Specialist.

The law does not specify for other non “Covered Buildings” - you should refer to your condo documents. Stone Building Solutions suggests revising the capital funding plan every 3-5 years.

When making repairs, the associations  in NJ can only use funds allocated to that specific item in study. The association does have the ability to borrow from other line items in the study if:

1. Those items do not have to be replaced in the next 5 years.
2. AND have written a voted plan to replace the funds within the next 5 years.

Nothing in the NJ law is intended to prevent the imposition of a special assessment or obtaining a loan in those cases where work needs to be done (building items have reached the end of their useful life even before the reserve study produced), or for items that need repaired or replaced earlier than the study predicts.