The short answer
A reserve study inventories every major component an association must replace — roofs, paving, siding, elevators — estimates each one's remaining life and cost, and sets the yearly contribution needed to pay for them. New Jersey now requires most community associations to have one prepared at least every five years and to fund reserves according to it.
What a reserve study contains
A reserve study has two halves. The physical analysis lists each common component, its condition, useful life, remaining life, and replacement cost. The financial analysis compares the money already in the reserve fund to what will be needed and produces a 30-year funding plan.
- Component inventory with quantities (squares of roofing, square yards of paving)
- Condition notes and photos from a site visit
- Remaining useful life and current replacement cost for each item
- Percent funded — reserves on hand versus the ideal balance
- A recommended annual contribution, usually with alternatives
New Jersey's reserve requirements
After the 2021 condominium collapse in Surfside, Florida, New Jersey enacted legislation (signed in January 2024) that requires most community associations to obtain a reserve study at least once every five years and to adopt a funding plan based on it. Covered buildings also face periodic structural inspections.
The law also expanded what owners and buyers can see about an association's reserves. Boards should treat the study as a public-facing document: it will be read by owners, buyers, lenders, and insurers.
Full study, update with site visit, or update without
- Full study: first-time or after major changes. A complete inventory and site inspection.
- Update with site visit: the usual five-year cycle. The inventory is re-checked and costs refreshed.
- Update without site visit: an interim financial refresh, useful in years between full updates when costs or interest rates move.
Turning the study into a budget
The study recommends a contribution; the board decides it. Underfunding pushes costs onto future owners through special assessments or loans. Overfunding is rare but can draw objections at budget time.
We present boards with two or three funding scenarios side by side — the effect on monthly dues, percent funded over time, and the risk of an assessment — so the decision is informed and documented in the minutes. See our HOA budget planning guide.
What it costs and how long it takes
Fees depend on the community's size and complexity. A townhome community is quicker to study than a high-rise with elevators, garages, and façades. Plan for several weeks from engagement to final report, and schedule it so the results arrive before budget season.
Common questions
Who can prepare a reserve study in New Jersey?
Reserve studies are prepared by qualified professionals such as reserve specialists and engineers. Check the credentials required under current New Jersey law and the association's own documents before engaging one.
Does a reserve study mean dues will go up?
Not necessarily. It shows whether current contributions are enough. If the fund is behind, the board can phase increases over several years instead of one large jump.
How often should a reserve study be updated?
At least every five years under New Jersey law, and sooner after major repairs, large cost changes, or when the board is planning a big project.
General information about New Jersey rules as of October 2026, not legal advice. Laws and municipal requirements change — confirm specifics with your attorney or the municipality before acting.
Reviewed October 2026 by Comet Management, Hamburg, NJ.