New Condo Law in NJ – Structural Integrity Bill

New Jersey Condo Law Update (2026): Structural Inspections and Reserve Funding Rules Explained

Updated January 2026. New Jersey’s condo and co-op “Structural Integrity” law was signed in early 2024. Since then, the State adopted amendments in 2025 (often called “fix-it legislation”) that primarily changed the reserve funding portion of the law. The structural inspection requirements did not change. This article explains what the law requires today and what it means for condo owners, buyers, and sellers in the South Jersey Shore market (Atlantic County and Cape May County).

Quick Summary: What Changed Since 2024

  • No change to structural inspections. The inspection rules are still based on building construction type (concrete/steel vs wood-frame) and building age.
  • The reserve section was amended. The updated law clarifies what “adequate” reserves means and adds a temporary funding option for associations that are behind.
  • Baseline funding must be included in reserve studies. Reserve specialists must include a “baseline” (zero-threshold) funding plan in the study.
  • Temporary 85% funding option. Associations can choose, for a limited time, to fund reserves at 85% of an adopted funding plan, subject to specific notice requirements.
  • New buyer and seller disclosure requirement. When an association is using the 85% option, the seller must provide the buyer the most recent reserve funding notice from the association before the purchase contract is signed.

Part 1: Structural Integrity Inspections (What the Law Requires)

The structural inspection portion of the law is intended to ensure certain buildings are evaluated for safety and structural deterioration over time.

Which buildings are covered?

The inspection requirements apply to condominium and cooperative buildings where the primary load-bearing system is mainly made of materials like concrete or structural steel (and similar non-wood structural systems). Many typical wood-frame (“stick-built”) buildings are generally not subject to the structural inspection requirement.

When are inspections required?

  • Initial inspection at 15 years. Covered buildings must complete an inspection when the building reaches the applicable age threshold.
  • Ongoing inspections. After the initial inspection, follow-up inspections are required on a recurring schedule that becomes more frequent as buildings age.

What happens if issues are found?

If an inspection identifies conditions that require repair, the engineer sets the timeline for repairs. Reports and required filings must be handled according to the law’s process, and associations must communicate required information to residents as required.

Local perspective: In shore towns with salt air, wind exposure, and older building stock, proactive maintenance and timely repairs tend to matter more. Owners and buyers should not assume that “it’s the shore, everything looks weathered” is a harmless explanation, especially for older, concrete-based structures.

Part 2: Reserve Studies and Funding (Where the 2025 Amendments Matter)

The reserve portion of the law is about financial planning for major common-element repairs and replacements, such as roofs, exterior components, mechanical systems, elevators, and other capital items.

Reserve studies: the basic requirement

Associations must have reserve studies and keep them updated on a recurring schedule (commonly referenced as every five years). The reserve study projects anticipated repair and replacement costs over a long-term period (commonly a 30-year projection).

What “adequate” funding means (clarified)

The amendments clarified the concept of “adequate” reserve funding. A simple way to think about the baseline standard is:

  • A reserve funding plan that projects future reserves over the planning period and does not drop below a $0 balance, which would otherwise create the need for a special assessment or borrowing.

Baseline funding must be included in the reserve study

Under the amended law, reserve specialists must include a baseline (zero-threshold) funding plan in the reserve study. This does not prevent an association from choosing a stronger plan (such as threshold funding or other higher-funding approaches). It simply means baseline funding must be shown as an option so boards and owners can clearly see what the minimum plan looks like.

Reserve contributions do not have to be flat each year

The amendments also clarified that reserve contributions can increase over time (escalate annually), as long as the projected funding plan remains compliant and the reserve balance does not fall below the required minimum standard over the projection period.

The Temporary 85% Funding Option (Important Dates and Rules)

The amended law created a limited, temporary option intended to help associations that are behind on reserves transition toward compliance.

Key dates

  • Effective date: August 21, 2025
  • Sunset date: August 21, 2030

What the 85% option allows

For a limited period, an association may fund reserves at 85% of an adopted funding plan (including baseline), instead of funding at 100% of that plan.

Important limitations

  • The 85% method is temporary. After the allowed window ends, associations generally revert to the baseline minimum standard.
  • The 85% method is not designed to be a long-term strategy. Funding less now typically means higher funding requirements later.

Practical note: The 85% option can reduce short-term pressure, but it may increase the risk of future special assessments or borrowing depending on the association’s condition and reserve schedule. This is why the amended law focuses heavily on transparency and notice.

Required Notices If an Association Uses the 85% Option

If an association chooses the 85% funding option, the amended law requires specific disclosures.

Board notice to owners

Before adopting the budget, the association must issue notice to owners that it is using the 85% option. The notice must also address the potential impact, including whether the reduced funding is projected to cause the reserve balance to fall below zero and the predicted amount of any special assessment or loan associated with that decision.

What This Means for Buyers and Sellers (Transaction Impact)

This is where the 2025 amendments have real-world consequences in the South Jersey Shore condo market.

Seller disclosure requirement (when the association is at 85%)

If the association is funding at the 85% level, the amended law requires that, before the contract is signed, the seller must provide the buyer a copy of the most recent reserve funding notice issued to owners by the association.

Buyer due diligence: what to review

  • Current reserve study (and date of last update)
  • Reserve funding level (baseline, threshold, etc.) and whether the 85% option is being used
  • Recent meeting minutes for discussion of major projects (roof, exterior, concrete restoration, elevators, mechanical systems)
  • Any pending or planned special assessments
  • Engineering or structural reports if applicable to the building type and age

Local perspective: In many shore associations, major projects can be driven by exterior exposure and building age. Buyers should expect lenders, attorneys, and management companies to pay closer attention to reserves and documentation than they did historically.

What This Means for Condo Owners (Budget and Planning)

For owners, the biggest takeaway is that the law is pushing associations toward more consistent long-term funding so major repairs are less likely to be handled through large, sudden special assessments.

  • If an association is underfunded, increases to monthly fees may occur to meet reserve targets.
  • If an association uses the 85% option, owners should expect clear written notice describing the projected impact.
  • Owners should treat reserve studies as planning tools. They are not just paperwork. They influence resale value, buyer confidence, and the association’s ability to manage projects without disruption.

South Jersey Shore Takeaways (Atlantic and Cape May County)

  • Older buildings and buildings with concrete-based structural systems deserve extra attention due to age and coastal exposure.
  • Reserve documentation and funding practices are becoming a more visible part of condo transactions.
  • For buyers, “low condo fees” can sometimes signal an underfunded reserve situation. For owners, strong reserves often reduce surprise costs later.

Final Notes

This article is for general informational purposes and is not legal or engineering advice. Associations should consult qualified professionals for compliance, and buyers and sellers should consult their attorney regarding transaction-specific questions.

If you are buying or selling a condo in the South Jersey Shore area and want to understand how the building’s construction type, inspections, reserve study, and funding approach could affect the transaction, these topics are worth reviewing early, not at the last minute.

For more detailed information, you can read the full bill text here.