Verifying the structural integrity of properties is critical in securing public safety. New Jersey recognizes this with the ratification of the New Jersey Senate No. 2760 (S2760) on January 8, 2024. The law governs the construction, maintenance, and occupation of specific structures in the state. It also mandates property owners to conduct a reserve study every five years. 

A New Jersey reserve study looks into the sufficiency of the organization’s reserve funds and checks if it can cover the costs of preserving the building’s structural integrity. However, as a new legislation, some property managers might struggle to understand its purpose and the implications of failing to conduct a reserve study. 

One of the most immediate consequences of skipping a reserve study NJ is encountering unexpected repair costs. Without a clear plan, property owners often find themselves unprepared for large-scale maintenance expenses, such as building maintenance. These unforeseen costs can strain budgets and necessitate last-minute funding efforts, which may burden residents or stakeholders. 

Additionally, the absence of a reserve study frequently results in inadequate financial planning. Property managers may significantly underestimate the funds needed for future repairs, leading to underfunding and compounding financial stress over time.

Neglecting a reserve study also carries reputational and legal risks. For associations and multi-owner properties, failing to plan adequately for future expenses can erode trust among stakeholders. They may question the property manager’s competency, which can strain relationships and even cause disputes. 

In New Jersey, Senate Bill S2760 compounds these risks. Skipping a reserve study not only risks non-compliance but could also result in fines and legal repercussions. It adds to the financial and reputational burdens of property managers.

Beyond the immediate risks, failure to conduct a reserve study means missing out on significant opportunities to optimize costs and improve asset longevity. A well-prepared study allows property managers to schedule these repairs strategically, often securing better pricing and minimizing disruption. Regular maintenance, as informed by a reserve study, also tests that building components perform efficiently. 

Given these risks and missed opportunities, property owners must equip themselves with the right knowledge. Check out this infographic by Lockatong Engineering to gather insights into the expertise of professional engineers and reserve specialists in preparing a reserve study.