Structural Integrity Bill Imposes New Structural Inspection and Reserve Study Requirements on Certain Community Associations

On January 8, 2024, Governor Murphy signed into law Senate Bill S2760 (and its companion legislation, Assembly Bill A4384), which is informally known as the “Structural Integrity Bill.” The New Jersey Chapter of the Community Associations Institute (CAI-NJ) and its Legislative Action Committee (LAC) worked diligently with New Jersey lawmakers in the wake of the tragic Champlain Towers collapse in June 2021 to draft, revise, and ultimately get this vital legislation passed. The Structural Integrity Bill imposes new requirements on community associations concerning structural inspections and reserve studies.

Structural Inspection Requirements

With respect to structural inspections, residential buildings utilizing a load-bearing system comprised of steel, concrete, masonry, heavy timber, or some combination thereof are categorized as “covered buildings” and are subject to the legislation. Notably, single-family homes and low-rise, wood-framed construction are not included within the scope of the laws structural inspection requirements.

For covered buildings older than 15 years (based on the certificate of occupancy date), the association must obtain an initial “baseline”structural evaluation by a New Jersey licensed structural engineer within two years of January 8, 2024. For buildings newer than 15 years old, a structural evaluation must be obtained at the 16-year mark. If the structural evaluation yields a determination that there are structural concerns, the association must make necessary repairs within a deadline imposed by the structural engineer.

After obtaining the baseline structural evaluation, associations must obtain follow-up inspections every 10 years if the building is less than 20 years old. If the building is older than 20 years, follow-up inspections must occur every five years. If damage is found by an engineer to a buildings structural system, there must be a follow-up inspection within 60 days.

Reserve Study Requirements

In addition to structural inspections, the Structural Integrity Bill requires associations to update reserve studies. If more than five years have passed since an associations last reserve study, an updated study must be obtained within one year. Associations with reserve studies performed within the last five years must obtain an updated study within five years from the previous study.

If a reserve shortfall is identified through an updated study, associations must immediately begin making up the deficiency through dues increases and other budgeting methods. However, if doing so would require an increase in unit owner dues in excess of 10%, and depending on the nature and extent of the shortfall, associations will have up to 10 years to make up the shortfall.

The Structural Integrity Bill is nuanced and includes many additional requirements, provisions, and exceptions. The attorneys in our Community Association Law and Transition and Construction Defect Practice Groups are well-versed in the legislation and available to answer general or community-specific questions about its implications.