CT August 2026

SPECIAL ASSESSMENTS... from page 47.

For example, assume an association’s fiscal year runs from January 1 through December 31. If the board votes in July to amend the annual budget to increase the annual assessment by $100,000 effective September 1, that increase must be spread equally over the four remaining months of the fiscal year — that is, $25,000 per month. If, however, the association needs the $100,000 sooner, the board could impose a special or emergency assessment and require payment in one lump sum of $100,000, or over other periods of time. NJ Structural Integrity and Reserve Study Law Requirements As amended in August 2025, New Jersey’s structural integrity and reserve study law further requires associations to obtain a reserve study that includes a 30-year funding plan “in order to ensure that the association has adequate reserve funds available to repair or replace…common elements…without need to create a special assessment or loan obligation,” subject to one exception. Specifically, the 2025 amendments clarified that reserve studies must include a funding plan that permits the reserve balance to reach zero, but not fall below zero, during the 30-year projection. An association, however, can choose to fund reserves at only 85% of one of the capital reserve study’s recommended funding plans provided the board gives notice to all unit owners, in 20-point bold font, identifying the anticipated year and amount of any special assessment or loan resulting from the board’s decision to fund the reserves at that reduced level. This reduced funding option, which allows for a special assessment or loan, may not be used by an association for more than five fiscal years “next following” the amended law’s August 21, A special assessment can be an important tool for a board to implement when an association faces an unex pected expense or a shortfall in its budget or reserves. Before imposing one, the board should confirm with the association’s counsel that it has the proper authority under the governing documents and that it complies with the requirements of New Jersey’s structural integrity and reserve study law. The board should also evaluate whether an emergency assessment or a budget amendment may better fit the association’s needs. n 2025, effective date. Key Takeaways

requirements of the structural integrity law, or materially increase repair costs if delayed. Emergency Assessments If the regular common expense assessment or reserves are insufficient to address an immediate need or emer gency, many governing documents authorize the board to impose an “emergency assessment”. Unlike ordinary spe cial assessments, emergency assessments generally do not require unit owner approval. Furthermore, the determina tion of what constitutes an “immediate need or emergency” is often left to the board’s discretion. Before imposing an emergency assessment, the board should have a reasonable basis for concluding that the circumstances rise to the level of an immediate need or emergency. Some governing documents require the board to memorialize the factual basis for the emergency assess ment in a written resolution within a specified amount of time. Regardless of whether a written resolution is required, the board is well advised to obtain a report from the associ ation’s engineer or another appropriate independent expert supporting the conclusion that the condition qualifies as an emergency. Such a report will prove useful if a unit owner Another option that may be available under the gov erning documents is for the board to amend the annual budget and corresponding common expense assessment to cover the additional expense. Unit owner approval is often not required for a budget amendment and accom panying amendment to the annual assessment, but the board should confirm with the association’s attorney before proceeding. The key distinction between (a) amending the annual budget and assessment and (b) imposing a special or emer gency assessment is timing. An increase adopted through a budget amendment must be allocated evenly among the months remaining in the fiscal year. In contrast, a special or emergency assessment may be collected in whatever installments the board adopts, subject to any required unit owner approval. later challenges the board’s determination. Amending the Annual Budget and Assessment

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AUGUST 2026