New Jersey Reserve Study Requirements: What S2760 and S3992 Mean for Your Association

New Jersey now requires nearly every community association to complete a professional reserve study. Under S2760, signed into law in January 2024, all condominium associations and cooperatives, plus any HOA with more than $25,000 in common-area capital assets, must complete a capital reserve study and update it at least every five years. A 2025 amendment, S3992, then rewrote the funding rules that sit behind it.

Here is what New Jersey boards need to know.

Who Needs a Reserve Study in New Jersey?

The law amends the Planned Real Estate Development Full Disclosure Act (PREDFDA), which means it reaches almost every common-interest community in the state:

• Condominium associations and cooperatives: all of them, regardless of size. If your community shares structural elements, assume you are covered. Our condominium reserve study services can help here if you are unsure.
• Homeowners associations and other planned developments: required once common-area capital assets exceed $25,000. That threshold captures the vast majority of HOAs; roads, pools, clubhouses, or drainage systems alone typically clear it.

Only the smallest associations, with under $25,000 in common capital assets, fall outside the requirement. It’s very uncommon for this to apply, but it is worth knowing about the possibility.

Key Deadlines Under S2760

The compliance clock is already running:

• Associations with no reserve study since January 8, 2019 were required to complete one by January 8, 2025. If your community missed that deadline, it is out of compliance now and should commission a study immediately.
• Associations with a study on file must update it within five years of its completion, and every five years after that.
• Newly formed associations (created after January 2025) must complete their first study within two years of owners electing a majority of the board.

The study must be prepared or overseen by a credentialed Reserve Specialist (RS) or a New Jersey-licensed engineer or architect, following the Community Associations Institute's National Reserve Study Standards or an equivalent recognized national standard. Boards cannot prepare the study themselves.

We can assist here if you need any help.

What the Study Must Include

A compliant New Jersey reserve study pairs two analyses. The physical analysis inventories the common components your association maintains (roofs, siding, paving, elevators, mechanical systems, amenities) and estimates each one's remaining useful life and replacement cost. 

The financial analysis converts that inventory into a 30-year funding plan showing what the association must set aside so future repairs can be funded without loans or surprise special assessments.

S2760 belongs to the same post-Surfside generation of legislation as Florida's structural integrity rules, and it has a structural side too: buildings covered by the Act's inspection provisions must fold structural components such as load-bearing systems, facades, and balconies into their reserve planning. 

If you are weighing how New Jersey's approach compares with Florida's, see our guide to the difference between a reserve study and a Structural Integrity Reserve Study.

For budgeting purposes, most New Jersey associations should expect a professional study to run somewhere in the $3,000 to $10,000 range, depending on the size and complexity of the property.

The 2025 Update: S3992 Changed the Funding Rules

If your board's understanding of the law dates from 2024, it is now incomplete. S3992, effective August 21, 2025, amended the funding requirements in three important ways:

1. Baseline funding is now the standard. Adequate funding is defined as a 30-year plan under which the reserve balance never falls below zero. Every reserve study going forward must include a baseline funding option.
2. The original catch-up "glide path" was eliminated. The 2024 law's staged timelines for correcting reserve deficiencies no longer apply as written.
3. A temporary 85% option was introduced. A board that cannot meet the full recommended funding may fund at 85% of the recommendation for up to five fiscal years, but only with written notice to all owners stating the year and amount of any special assessment or loan the reduced funding is expected to cause. After five years, the association must return to full funding.

New communities must fund reserves adequately from the start; existing communities have a transition period to reach the baseline standard. If your current reserve study or budget was built under the original 2024 rules, it is worth having it reviewed for S3992 compliance before your next budget cycle.

What New Jersey Boards Should Do Now

Start by pulling the date of your last reserve study. If it is older than five years, or does not exist, commissioning one is the immediate priority. If you have a recent study, confirm the funding plan meets the S3992 baseline definition, and formally adopt (and minute) the funding plan your board is following. 

If you elect the 85% option, issue the required owner disclosures. Reserve study requirements vary widely by state, so if you govern communities elsewhere too, our state law guide covers the rules across the country.

Reserve Study Group produces plain-English, statute-compliant reserve studies across New Jersey, prepared by credentialed reserve specialists. Request a proposal and we'll scope a study that satisfies S2760 and S3992, with a funding plan your owners can actually understand.

FAQs

• Is a reserve study required in New Jersey? Yes. Since January 2024, all condominium associations and cooperatives, and any HOA with more than $25,000 in common-area capital assets, must complete a professional capital reserve study and update it at least every five years.
• Who can prepare the reserve study? A credentialed Reserve Specialist (RS) or a New Jersey-licensed engineer or architect, working to recognized national reserve study standards. Board members and managers cannot prepare it themselves.
• Can we fund less than the study recommends? Only through the S3992 85% option: a board may fund at 85% of the recommended amount for up to five fiscal years, with written notice to owners of any anticipated special assessment or loan that results.
• What happens if our association ignores the requirement? The association is out of statutory compliance, and the board loses its strongest protection against deferred maintenance, lender scrutiny, and owner claims when a major repair arrives unfunded. Compliance is considerably cheaper than the alternative.

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