Updated July 2026. New Jersey’s condo and co-op “Structural Integrity” law took effect January 8, 2024. The State then adopted amendments in 2025 (S3992, often called the “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).
On this page
- Quick summary: what changed since 2024
- Part 1: Structural integrity inspections
- Part 2: Reserve studies and funding
- The temporary 85% funding option
- Required notices if an association uses 85%
- What this means for buyers and sellers
- What this means for condo owners
- Frequently asked questions
Quick Summary: What Changed Since 2024
- No change to structural inspections. The inspection rules are still based on building construction type 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 up to five fiscal years, 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 law applies to residential condominium and cooperative buildings whose primary load bearing system is a concrete, masonry, steel, or hybrid structure. That includes heavy timber construction and buildings with podium decks. Standard wood-frame buildings, such as single-family homes and typical townhouse projects, are excluded.
This is broader than most owners assume. A lot of shore mid-rise and high-rise buildings are masonry or hybrid construction and fall squarely inside the definition.
When are inspections required?
| Building situation | Inspection deadline |
|---|---|
| Certificate of occupancy issued more than 15 years ago | Within two years of the law taking effect, meaning that deadline has already passed |
| Building is less than 15 years old | Within one year after the 15th anniversary of the C.O. |
| Follow-up, building under 20 years old | Within 10 years of the previous inspection |
| Follow-up, building over 20 years old | The earlier of five years after the last inspection, the date the engineer set, or 60 days after any damage to the load bearing system |
Inspections must follow American Society of Civil Engineers protocols. Copies of the report go to the local construction official and to all unit owners.
What happens if issues are found?
If an inspection identifies conditions that require repair, the engineer sets the timeline for the work. Worth knowing: if the board has to assess owners to pay for a structural repair, the statute says no owner vote is required, regardless of what the governing documents say.
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 masonry and concrete 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
All associations must have a reserve study, reviewed by a licensed architect, engineer, or credentialed reserve specialist, and must update it at least every five years. The study projects anticipated repair and replacement costs over a 30-year period.
What “adequate” funding means (clarified)
The amendments clarified the concept of “adequate” reserve funding. The baseline standard is a funding plan whose projected reserve balance does not drop below $0 at any point over the 30-year projection, since hitting zero is what forces 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. It simply means baseline funding must be shown so boards and owners can clearly see what the minimum looks like.
Reserve contributions do not have to be flat each year
The amendments also clarified that reserve contributions can increase over time, as long as the projected funding plan stays compliant and the balance never falls below the required minimum 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, when S3992 was signed into law.
- How long an association can use it: up to five fiscal years. The five-year clock runs from the point the board elects the 85% method, not from a fixed statewide end date. After five fiscal years, the association must fully fund whichever funding plan the board has adopted.
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. It cannot be used for more than five fiscal years, after which a zero-dollar funding plan is the 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.
The detail most owners miss: the board’s notice has to state, in at least 20-point bold font, that it elected to fund the capital reserve at 85% of the amount the reserve study recommended. Where applicable, that same notice must give the year a special assessment or loan is anticipated as a result, and the anticipated amount. In other words, an association that underfunds has to put its own predicted assessment in writing.
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
For a broader walkthrough of condo due diligence at the shore, see what you need to know before buying a condo at the Jersey Shore.
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 or masonry 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.
Frequently Asked Questions
Does this law apply to my condo building?
The inspection requirements apply if the building’s primary load bearing system is concrete, masonry, steel, or a hybrid structure, including heavy timber and podium decks. Standard wood-frame buildings, single-family homes, and typical townhouse projects are excluded. The reserve study requirements apply to all associations regardless of construction type.
What is the 85% reserve funding option?
It lets an association fund its capital reserve at 85% of the funding plan the board adopted, instead of 100%, for up to five fiscal years. After that, the association must fully fund its adopted plan.
How do I find out if an association is using the 85% option?
The board must send all owners a notice, in at least 20-point bold font, stating that it elected 85% funding. If you are buying a unit during that period, the seller must give you a copy of that notice before you sign the contract.
Do owners get to vote on a structural repair assessment?
No. The statute provides that if the board must assess owners to pay for a repair to the structure of the building, no vote of the owners is required, regardless of what the governing documents say.
How often does a reserve study have to be updated?
At least once every five years, and it must be reviewed by a licensed architect, engineer, or credentialed reserve specialist.
Shore Condo Resources
- Ocean City NJ condos for sale
- Ocean Plaza, Longport
- The Flanders, Ocean City
- Cape House, Ocean City
- Ocean Colony Condominium
- Spinnaker, Sea Isle City
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.
Full bill text: S2760, the original Structural Integrity law and S3992, the 2025 reserve funding amendments.
Reserve funding is a big part of why fees differ building to building. Estimated monthly fees across Ocean City condo buildings.