In accordance with the newly ratified NJ Law S2760, conducting a reserve study New Jersey is now mandatory for residential multi-family and cooperative buildings in the state. A reserve study involves an assessment of the physical condition of infrastructure, determining its potential repairs and replacement needs, and allocating sufficient budget for its restoration.
Under the regulation, cooperatives and homeowners associations (HOAs) are mandated to undergo a reserve study every five years. A reserve study is a tool that helps associations budget sufficient reserve funds for future asset maintenance and improvements. As per the law, owners who do not adhere to the regulation can lose their Certificate of Occupancy and be subject to fines and revocation of entitlements for cooperatives and HOAs.
Moreover, a reserve study requires specialized expertise in building inspection and reserve budgeting. While numerous professionals and volunteers are equipped with engineering and accounting skills, only specific experts – a reserve specialist and a professional engineer – are qualified to do a reserve study.
A reserve specialist (RS) is someone who has years of experience in reserve studies, holds a degree in architecture, engineering, or construction management, and complies with the professional reserve specialist code of ethics. They are also certified by the Community Associations Institute (CAI).
An RS’s expertise lies in evaluating when major repairs and replacements are needed and planning the association’s reserve fund. As credentialed RS, they excel at financial modeling, which helps them estimate and assess reserve fund requirements for future infrastructure restorations.
Meanwhile, a state-licensed professional engineer (PE) is focused on the technical aspects of the building assessment. They must have completed an engineering degree, worked four years under the supervision of a licensed professional engineer, and passed the PE examination.
A PE may be a structural engineer NJ with expertise in condition assessment and valuation estimates. Their reserve studies cover in-depth inspection of physical components like the building envelope, roofs, HVAC systems, and sites. PEs give a comprehensive report that includes the condition of property components, together with the repair and replacement recommendations.
Both RS and PE are practical and qualified to conduct a high-quality reserve study to attain the long-term stability of NJ properties. Hiring these professionals can help cooperatives and HOAs comply with NJ regulations, plan long-term financial strategies for maintenance, and evaluate their asset condition to prevent risks and accidents. However, the choice between these two experts shall be weighed depending on a property’s specific needs.
Read this infographic from Lockatong Engineering to learn how to decide between an RS and PE when conducting a reserve study.
