Stringent Inspections & Maintenance Requirements in New Jersey’s Structural Integrity Bill

In response to the 2021 collapse of the Champlain Towers South condominium building in Florida, New Jersey Governor Phil Murphy took a crucial step in ensuring building safety by signing into law S2760/A4384, commonly referred to as the Structural Integrity Bill, on January 8, 2024.

This legislation strengthens inspection requirements for certain residential buildings during construction and requires condo associations to maintain adequate repair reserves. It specifically focuses on the structural integrity regulations for condominiums and cooperatives. Let’s delve into the critical components of this groundbreaking law, which hopes to prevent future tragedies.

Updates and Improvements to Ensure Safety

The new law supplements the State Uniform Construction Code Act (UCCA) to mandate structural inspections at various stages of construction for covered buildings. A licensed structural inspector must review plans, conduct scheduled inspections during construction, and issue a report confirming the primary load-bearing system was built according to approved plans. Certificates of occupancy can only be issued once the structural inspector confirms the building’s load-bearing system matches the plans and any necessary repairs are completed.  

The law also amends the Planned Real Estate Development Full Disclosure Act (PREDFDA) to require that condo associations maintain adequate capital reserve funds for necessary structural repairs once a qualified professional has conducted inspections. Associations must develop a 30-year funding plan to have sufficient reserves without requiring additional special assessments.  

Additionally, the new law enables associations to levy special assessments if immediate structural repairs are needed for safety reasons, as identified by an engineering report. Finally, developers must create a preventative maintenance schedule for essential maintenance tasks for association-maintained building components. These schedules will be shared with owners and updated based on required structural inspections.

Structural Integrity Highlights

The law defines “Covered Buildings” as condominium associations and cooperatives with specific load-bearing systems, emphasizing concrete, masonry, steel, or hybrid structures, including heavy timber and buildings with podium decks. Mid-rise and high-rise buildings generally fall into this category, but other structures may also be included. Exceptions are made for apartments and single-family homes.

Inspection Timelines

Licensed structural engineers will assess plans and conduct on-site inspections throughout construction, ensuring the primary load-bearing system adheres to approved designs. Occupancy permits will only be issued after confirming compliance and addressing any identified issues.

Covered buildings also require an initial inspection of the primary load-bearing system within 15 years of receiving a certificate of occupancy — or no more than 60 days after observable damage. Buildings over 15 years old when the law took effect in 2024 have two years to complete the initial inspection, which must be conducted by qualified licensed engineers who will recommend timeframes for future inspections (up to 10 years). Specific timelines apply based on the issuance date of the certificate.

Required Maintenance

Associations must resolve any maintenance issues revealed by inspections after filing plans with the municipality — even if governing documents limit board-authorized expenditures. The governing board can authorize assessments or loans to fund corrective maintenance without owner approval to ensure the safety of residents. When immediate structural repairs are deemed necessary by a licensed engineer to safeguard lives, associations have the authority to levy special assessments on residents.

Replacement Reserves

The law also amended the Planned Real Estate Development Full Disclosure Act to require all associations — except those with less than $25,000 in common area assets — to obtain a capital reserve study and 30-year funding plan. This requirement ensures adequate reserves in place for repairing or replacing comment element capital assets without relying solely on special assessments.

Capital Reserve Study

A licensed engineer, architect, or qualified reserve specialist must complete reserve studies. Whether existing or newly formed, associations have one year from January 2023 to complete an initial study if they haven’t done so within the past five years. New associations must complete a study within two years of electing a majority non-developer board. 

Funding Requirements

After completing a capital reserve study, the next step is funding reserves. The statute mandates that associations fund reserves based on the study’s recommendations. If the current funding is inadequate, associations can borrow from the reserves under specific guidelines but must follow specific guidelines specified in the new law.

Associations with reserve funding deficiencies as of January 2024 that would need budget increases of 10% or greater to rectify must address those shortfalls within 10 years or by the date reserves are projected to fall below zero — whichever comes first.

Deficiencies of less than 10% of the prior year’s assessment must be rectified within two years. The law’s goal is to ensure associations have sufficient reserve funds to cover major repairs and replacements as needed. It does not, however, prevent associations from levying special assessments or obtaining loans if needed.

Deficiency Resolution

Associations with inadequate funding as of January 8, 2024, must address deficiencies within stipulated timelines, ensuring financial adequacy and stability.

New Jersey’s Structural Integrity and Reserves Legislation marks a significant step toward enhancing building safety and preventing potential disasters. By prioritizing inspections, maintenance, and adequate funding, the state aims to protect residents and uphold the integrity of its built environment.

New Jersey Senate Bill No. 2760 reflects the state’s commitment to preventing tragedies like the Florida condo collapse. It focuses on condominiums and cooperatives, requiring mandatory inspections throughout a building’s life cycle and establishing guidelines for maintenance planning and repair reserves. These measures aim to strengthen structural integrity through proactive oversight and ensure long-term building safety for residents.

Are you a commercial real estate investor or looking for a specific property to meet your company’s needs? We invite you to talk to the professionals at CREA United: an organization of CRE professionals from 92 firms representing all disciplines within the CRE industry, from brokers to subcontractors, financial services to security systems, interior designers to architects, movers to IT, and more.

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