What do the 2024 and 2025 New Jersey HOA law changes require of volunteer boards?

By OurHOA · General information · Revised October 27, 2026

New Jersey HOA law changes for boards: reserve studies every five years, the 85 percent funding notice, and structural inspections of condo buildings.

Part of the HOA board handbook: new state laws for boards.

The short answer

The rules below apply to the association of a "planned real estate development" under the Planned Real Estate Development Full Disclosure Act (PREDFDA), which begins at N.J.S.A. 45:22A-21. Condominiums, co-ops and homeowners associations that own common property generally fit that term; ask counsel if your community is unusual. Two laws added real work for the volunteer board: - P.L.2023, c.214 (S2760) was approved January 8, 2024 and took effect that day. It requires reserve studies and reserve funding for planned real estate development associations (N.J.S.A. 45:22A-44.2 and 45:22A-44.3) and structural inspections of certain condominium and co-op buildings (N.J.S.A. 52:27D-132.4). - P.L.2025, c.132 (S3992) was approved August 21, 2025 and took effect immediately. It rewrote the funding rules, added an 85 percent funding option with a mandatory notice, and made the five-year study cycle apply to every association. The reserve rules are not a condo-only law. The Department of Community Affairs (DCA) says in its FAQ that they apply to all planned real estate development associations, not just those with covered buildings. The inspection rules reach far fewer communities. This guide is general education, not legal advice. Your master deed and bylaws matter too, so have the association's attorney confirm how each rule applies.

Who needs a reserve study, and when

Every planned real estate development association must get and fund a capital reserve study unless it has less than $25,000 in total common area capital assets. The statute does not define that phrase. The DCA FAQ reads it broadly: roofs, exterior walls, hallways, parking lots, pools, landscaping, and even exclusive-use areas such as balconies and patios. A community with a pool, a clubhouse or private streets is far past $25,000. The study must follow the Community Associations Institute's National Reserve Study Standards or a similar national standard, and it must be performed or overseen by a CAI-credentialed reserve specialist or by an engineer or architect licensed in New Jersey. The DCA FAQ says board members cannot prepare it themselves. The deadlines: - An association with no reserve study in the five years before January 8, 2024 had until January 8, 2025 to get one. - An association formed after January 8, 2024 must get its first study as soon as practicable after owners elect a majority of the board, and no later than two years after that election. - After that, a study must be conducted and reviewed at least once every five years. Besides balances, costs and component condition, the study must estimate the cost of future studies and structural inspections and include a 30-year funding plan. Our guide on hiring a reserve study company covers the request for proposal and what to ask bidders.

What the 2025 law changed about funding

The 2024 law put underfunded associations on a fixed catch-up schedule: two fiscal years if closing the gap took less than a 10 percent assessment increase, and equal annual increases over up to 10 fiscal years if it took more. A separate rule required a board resolution to recover, within five fiscal years, any reserve spending above what the study allocated to a component. P.L.2025, c.132 deleted the catch-up schedule and the recovery rule. In their place: - "Adequate" now means enough that the reserve balance will not fall below zero over the 30-year funding plan. - Every study must include at least one 30-year plan in which the lowest projected balance is exactly zero. The study may also include plans with a higher minimum balance or with contributions that rise each year, as long as no plan drops below zero. - An association formed after January 8, 2024 must fund its reserves under one of the plans in its most recent study. - An association that existed on January 8, 2024 may fund under one of those plans, or at 85 percent of one of them if it gives the notice described below. The zero-balance plan is a floor. A board that adopts it has no cushion, so one roof that fails early means a special assessment. Ask the reserve specialist to show the zero-minimum plan next to a plan with a cushion, and record in the minutes why the board picked the one it did.

Using the 85 percent option

An existing association may fund reserves at 85 percent of a plan only if it meets two conditions in N.J.S.A. 45:22A-44.3(e): 1. Before adopting the budget, the board sends every unit owner a notice in 20-point bold type. It must say the board elected to fund the reserve at 85 percent of the plan recommended by the 30-year study, the year a special assessment or loan is expected because of the reduced funding, and the expected amount. 2. Before a buyer signs a purchase contract, the seller must give the buyer a copy of the most recent notice. The option is temporary. An association may not use it for more than five fiscal years following August 21, 2025. Have counsel confirm your last eligible budget year and record it in the minutes. Have the reserve specialist rerun the plan at 85 percent and put the shortfall year and amount in writing. Sample wording to adapt, printed in 20-point bold: "NOTICE OF REDUCED RESERVE FUNDING. The Executive Board has elected to fund the capital reserve fund at 85 percent of the funding plan recommended by the Association's 30-year capital reserve study and funding plan. As a result, the Association anticipates a special assessment or loan in [year] in the amount of approximately $[amount]." Sellers will ask the association for the latest notice, so add it to the resale packet.

Structural inspections for covered buildings

The inspection rule applies only to a covered building: a residential condominium or co-op building whose primary load bearing system is concrete, masonry, steel or a hybrid, including heavy timber and buildings on podium decks. Wood-frame buildings not on a podium deck, single-family dwellings, and mostly-rental buildings that are not condos or co-ops are excluded. The DCA FAQ says building height does not matter. A wood-frame townhouse community is usually out. A concrete mid-rise condominium is in. The initial inspection is due by the earlier of 15 years after the certificate of occupancy or 60 days after observable damage to the primary load bearing system. For buildings that existed when the law took effect: - A certificate of occupancy issued 15 or more years before January 8, 2024 meant an inspection by January 8, 2026. If that has not happened, the association is late. - A certificate issued less than 15 years before that date means an inspection within one year of the building's 15-year mark. A New Jersey licensed engineer does the inspection, following the American Society of Civil Engineers protocol or a similar one. The report sets the date of the next inspection, which may not be more than five years after the preceding one. Copies go to the municipal appointing authority, the construction official and the enforcing agency, and any resident may get a copy on request. When the report calls for repairs, the association hires a licensed architect or engineer to prepare plans and files them with the municipality or enforcing agency.

Paying for structural repairs

Section 8 of P.L.2023, c.214 lets the board fund corrective maintenance of the primary load bearing system without an owner vote, even if the governing documents require one. The board may adopt an assessment payable over one or more fiscal years or take a loan on terms it finds reasonable. Before doing either, the board must determine that the money is needed to maintain the building's structural integrity and must get a written report from a New Jersey licensed engineer or architect stating that skipping the work will: - create an imminent or reasonably foreseeable hazard to health or safety, - violate the structural inspection law, or - materially increase the cost of the work if delayed. A sample motion: "Based on the written report of [engineer], P.E., dated [date], the Board determines that the corrective maintenance described in that report is necessary to maintain the structural integrity of [building], and adopts an assessment of $[total], payable in [number] installments beginning [date], under section 8 of P.L.2023, c.214." The association keeps its right to sue over construction defects. Our guide on levying an HOA special assessment walks through notice, installments and collection.

Turnover rules for newer communities

Within 60 days after 75 percent of the units are conveyed, the developer must give up control and deliver the association's records and property. The 2024 law's list includes the master deed and bylaws, minute books, an accounting of funds, insurance policies, warranties, contracts, and the as-built plans, including field changes to the primary load bearing system. The developer must also hand over a preventive maintenance document with a schedule for periodic structural inspections. A new owner board should check the delivery against that list in writing, then order its first reserve study within the two-year window.

Mistakes to avoid and a checklist

The mistakes boards make: - Treating the reserve law as a condo-building law. It reaches townhouse and single-family associations too. - Adopting an 85 percent budget without the 20-point bold notice, or forgetting the option ends after five fiscal years. - Having a board member update the study on a spreadsheet. - Waiting for the state to step in. The DCA FAQ says it does not oversee owner-controlled associations on these sections, that owners who disagree must sue, and that ignoring the law could expose the association and individual board members to civil liability. - Planning around S146. That 2026 bill and its Assembly twin, A318, would change the structural integrity rules and stretch the time associations get to build adequate reserves. Both were referred to committee on January 13, 2026 and had not moved as of late October. Until one passes both houses and is signed, the deadlines above stand. Bring this to the next meeting: 1. Confirm the date of the last reserve study and book the next one inside five years. 2. Choose full funding or the 85 percent option, and record why. 3. For a concrete, masonry or steel condo or co-op building, confirm the certificate of occupancy date and whether the inspection is done or due. 4. Calendar the next inspection from the engineer's report.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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