Corporate Headquarters

735 N. Water Street, Suite 175

Milwaukee, WI 53202


New Jersey Reserve Study Requirements

Reserve Study and Funding Requirements for New Jersey Condos, Co-ops, and Planned Real Estate Developments

Introduced and signed into law in 2024, New Jersey Senate Bill S2760 and Assembly Bill A4384 establish statewide reserve study and funding requirements for condominium associations, cooperatives, and planned real estate developments.

What You Need to Know

Community Types

All condominiums and cooperatives require a reserve study. Planned real estate developments (ie homeowners associations) with at least $25,000 in common area capital assets are also required to complete a reserve study.


A reserve study must be updated every five (5) years.


Communities that have not had a reserve study in the past five (5) years must undertake an initial study by January 8th, 2025. Associations formed after January 2025 must undertake an initial study within two (2) years of electing a majority of the board. Those that have an existing reserve study must update it within five (5) years of its completion.

Scope of Work

The reserve study must conform with the National Reserve Study Standards of CAI or similar industry standards by another recognized national organization. The study must be completed or overseen by a licensed Reserve Specialist (RS) or a New Jersey licensed Engineer or Architect.

Statutory Funding

Communities that are required to complete a reserve study are also required to adequately fund reserves. If an existing reserve fund deficiency would require a contribution increase that exceeds 10% of the annual budget, the community has 10 fiscal years to attain adequate funds through the use of proportionate annual increases or until the date projected in the reserve study that the reserve fund balance would fall below $0. If the reserve contribution increase is no more than 10% of the annual budget, a community has two (2) fiscal years to make up an existing deficiency.

New Jersey Capitol Building

New Jersey Senate Bill S2760 Frequently Asked Questions

New Jersey Senate Bill S2760 establishes qualifications for those preparing a professional reserve study. To comply, a reserve study must be prepared by an individual who meets at least one of the following requirements: 1) holds their Reserve Specialist designation, or 2) is a licensed Professional Engineer or Architect in the state of New Jersey.

Reserve components vary by association. Large expenditures are typically funded through reserves whereas smaller and recurrent expenditures are funded through the general operating fund. We recommend you review your governing documents and historical practices to determine which components are maintained through reserves. If the purchase and installation cost or replacement cost is near or below $25,000, Reserve Advisors can help you evaluate the necessity of conducting a reserve study. Contact us today.

A reserve study determines how much a community needs in reserve funds to support the timely repair and replacement of common assets. Community Associations Institute (CAI) defines adequate reserves as “a replacement reserve fund and stable and equitable multiyear funding plan that together provide for the reliable and timely execution of the association’s major repair and replacement projects without reliance on additional supplemental funding.” While different reserve study firms may use different funding strategies, the intent is to provide financial stability while mitigating the risk of a funding shortfall and subsequent deferred maintenance.

The reserve study takes into account, the sufficiency of existing reserve funds and presents a recommended funding plan that complies with state statutes. Funding recommendations are the direct result of near-term project needs and there may be cases where it is difficult, if not impossible, to meet the immediate funding needed to address them. We encourage you to meet with your reserve study consultant to review their recommendations and determine the merits of adjusting their recommendations, which may or may not alleviate the ability to attain appropriate funding levels. In the event your association is still unable to meet its funding obligations set forth by New Jersey Senate Bill S2760, we encourage you to consult with legal counsel to better understand the risk associated with being non-compliant.

Ready to Get in Touch?

Reserve Study Resources

Are Reserve Studies New to You?
Reserve Study Report Overview
What is a Reserve Study and Why is It Important?
On behalf of Sunset Bay, I wanted to personally thank you and your team for a job well done. Reserve Advisors did a great job listening to our concerns and providing the report data in a format that made it easy to understand. The data will be extremely helpful for years to come. I can honestly say your folks set the bar.
Mike Weidner, Board President
Sunset Bay Condominium | Ocean City, MD

Sign up for our Newsletter