Important Update: New Jersey’s S3992 Amends Reserve Funding Requirements!
Senate Bill S3992, amending and clarifying S2760, the Structural Integrity and Reserve Funding legislation was signed into law on August 21, 2025.
Here are the key highlights of S3992:
- Enhanced Clarity: “Adequate” reserve funding now ensures reserve balances never drop below zero over a 30-year period.
- Baseline Funding Option: Reserve studies must include a zero-threshold funding plan, allowing balances to reach zero at times, a practical solution for underfunded associations.
- Flexible Funding for Existing Associations: Associations may choose to fund per the latest reserve study or at 85% of a reserve plan.
- Transparency Requirements: If funding at 85%, associations must notify unit owners in 20-point bold font, detailing the funding level, anticipated special assessment/loan year, and amount. Sellers must also provide this notice to buyers before contract execution.
- Time-Limited Flexibility: The 85% funding option is capped at 5 fiscal years, after which a baseline (zero-threshold) funding plan is the minimum requirement.
- Reserve Study Standards: Studies must be updated every 5 years by a Reserve Specialist, licensed engineer, or architect.
How The Falcon Group Can Help:
Our team of experienced Reserve Specialists, licensed engineers, and architects are ready to assist your association in navigating these updated requirements. From conducting compliant reserve studies to developing tailored funding plans, we ensure your community meets S3992’s mandates while maintaining financial stability.
If you’ve already had your study completed and would like an additional funding plan related to the updated requirements, please contact us, and one of our Reserve Specialists will be happy to assist.
Contact us today below to schedule a consultation or learn more about our services.
