Last updated: October 13, 2026
What should a condo owner in Edgewater, NJ ask the association before deciding whether to sell, rent, or keep the unit?
Ask for the current reserve study and its funding plan, the reserve balance and this year's budget, any special assessment approved or under discussion, the structural inspection results, the master insurance policy and its deductible, the delinquency rate, open litigation, and the building's leasing rules. Lenders now read those same documents under Fannie Mae's Full Review, and New Jersey's reserve law decides what the board has to tell you.
The building's paperwork decides more than the market does
Picture an owner in Edgewater who bought a one bedroom ten years ago as an investment. The tenant is leaving. The owner is weighing three options: sell, rent it again, or hold it another few years.
Most people start that decision with a price. I would start it with the association.
Two things changed since that owner bought. New Jersey now requires every condo association to keep a professional reserve study and fund it on a 30 year plan. And Fannie Mae and Freddie Mac retired the light touch condo review in August 2026, so the building's finances decide whether a buyer can get a conventional mortgage on your unit. A pending special assessment or a thin reserve fund does not only cost you money. It shrinks the pool of buyers who can bid, and it changes the rent you need to clear.
The good news is that the law gives you the right to ask, and much of what you need is already written down. The questions below are the ones I walk owners through before we talk about a number.
What changed, in plain terms
New Jersey's Structural Integrity and Reserve law took effect January 8, 2024. Associations with $25,000 or more in common area capital assets must obtain a capital reserve study with a 30 year funding plan, prepared or reviewed by a licensed engineer, a licensed architect, or a credentialed reserve specialist, and update it at least every five years. Covered buildings, meaning condo and co-op buildings whose primary load-bearing structure is concrete, masonry, steel, or a hybrid, also need periodic structural inspections by a State-licensed engineer, starting within fifteen years of the certificate of occupancy, with older buildings on a catch-up schedule.
On August 21, 2025, the Legislature amended that law. Reserve funding is now "adequate" only if the 30 year plan never projects the reserve balance below zero. Existing associations may fund at 85 percent of the plan for up to five fiscal years, but only with a written notice to every owner, in 20 point bold type, naming the year a special assessment or loan is expected and the amount the board anticipates. The same amendment put a duty on sellers. Under N.J.S.A. 45:22A-44.3, before a contract to purchase the unit is signed, the seller must give the buyer a copy of the association's most recent 85 percent funding notice. Ask your real estate attorney when and how to deliver it in your sale. If your building is on that reduced plan, that notice reaches your buyer before the contract is signed, whether or not you raise it first.
Then the lenders moved. Fannie Mae Lender Letter LL-2026-03, issued March 18, 2026, retired Fannie Mae's Limited Review for established projects. Freddie Mac Bulletin 2026-C, issued the same day, retired Freddie Mac's Streamlined Review. Both changes apply to loan applications dated on or after August 3, 2026, so every one of those buildings now goes through a full project review: Fannie Mae's Full Review, or Freddie Mac's equivalent. For applications dated on or after January 4, 2027, the minimum reserve contribution rises from 10 percent to 15 percent of the annual budgeted assessment income. Fannie Mae's Selling Guide, section B4-2.2-01, lets a lender rely on a reserve study instead, if the study was completed within three years of the lender's project approval and the budget includes the highest recommended reserve allocation in that study. Freddie Mac has its own version of that alternative. Ask the buyer's lender which one applies.
Read those two changes together. The state tells the board what it must study and fund. The lenders read the results and decide whether your buyer gets a loan.
The questions to ask your association
Put these in writing to the board or the management company. Ask for documents, not summaries. A manager's email saying "reserves are fine" is not a reserve study.
Reserves and the budget
- When was the current reserve study completed, and who prepared it? Ask for the study itself and the 30 year funding plan.
- Is the board funding at the full plan or at 85 percent? If 85 percent, ask for the owner notice, the year the shortfall is expected, and the anticipated amount.
- What is the reserve balance today, and what does this year's budget contribute to reserves as a percentage of total assessment income? That percentage is the number a lender will test against 15 percent in January.
- Has any special assessment been approved, proposed, or discussed at a board meeting in the last twelve months? Ask for the minutes.
- What capital projects are planned in the next three years? Facade, roof, garage deck, elevators, windows, and in Edgewater, anything that touches the waterfront side of the building.
- What is the delinquency rate on common charges? Lenders look at the share of units more than 60 days behind.
The structure
- Did the building need a structural inspection under the 2024 law? It applies to covered buildings whose primary load-bearing structure is concrete, masonry, steel, or a hybrid. If so, when was it done and by whom?
- Did the inspection report identify required maintenance or repairs, and when did it say the next inspection is due?
- Were those repairs completed, funded from reserves, or are they the reason for an upcoming assessment?
Insurance
- Ask for the current master policy declarations page, the replacement cost coverage, and the renewal date.
- What is the deductible, and is any part of it assessed per unit? If the master policy carries a per unit deductible tied to a specific peril, a buyer's HO-6 policy has to cover that same peril at that level, and a gap there stalls a closing.
- Has the carrier changed or the premium moved materially at the last renewal, and did that change flow into the budget?
Financing and the resale process
- Is there any pending litigation involving the association, as plaintiff or defendant?
- What share of units are investor owned, and what share of the building is commercial space?
- Has the management company completed a lender condo questionnaire in the last six months? If so, were any items flagged? That questionnaire is the fastest way to learn how the building looks to a lender.
- What does the resale document package cost, how long does it take, and is there a right of first refusal, a move fee, or a capital contribution the buyer pays at closing?
Rental rules, if you are weighing another tenant
- What are the leasing restrictions? Minimum lease term, a cap on the number of rented units, a waiting list, board approval, or an application fee.
- Have the rental rules changed since your last lease, or is a change under discussion?
- Is there a rental registration or inspection requirement with the Borough of Edgewater that applies to your unit? Confirm that with the Borough directly.
How the answers change the decision
A building with a current reserve study, a plan that stays above zero, no assessment on the horizon, and a clean master policy gives a buyer's lender what it needs to review the project. Whether it passes is the lender's call, but you go into the sale knowing the answer rather than hoping. That supports a sell decision if the numbers work. It also supports a hold decision, because the carrying cost is predictable.
A building funding at 85 percent with a special assessment projected three years out is a different conversation. If you rent, that assessment lands on you, not the tenant, and the rent has to cover it. If you sell, the 85 percent notice goes to the buyer before the contract is signed, and the buyer's lender reads the same plan. Pricing has to account for that, and a buyer with conventional financing may not be able to close at all if the building fails Full Review. That is not a reason to panic. It is a reason to know before you list rather than two weeks before closing.
One more point for the ten year investor. A decade of rental use means depreciation recapture and capital gains are part of the sell math, and a 1031 exchange may be part of the hold math. I am a licensed real estate agent, not a tax advisor or attorney. Run that piece with your CPA before the listing goes live, not after the contract is signed.
Warrantability has not been verified for any building named or implied in this post. Financing eligibility depends on the association's current reserve, litigation, occupancy, and insurance status, and it changes without notice. Confirm with a lender before relying on any financing assumption.
Where to get the answers
Start with the management company and copy the board president. New Jersey's Condominium Act, N.J.S.A. 46:8B-14, requires the association to keep accounting records open to inspection by unit owners at reasonable times, and the reserve law requires the association to maintain its reserve study. Your bylaws and the state's association regulations cover minutes and other records. A written request for the reserve study, the budget, the minutes, and the insurance declarations is an ordinary request, not a confrontation. If the board has not completed a reserve study or a structural inspection at all, that is itself an answer, and it belongs in your decision.
Have your real estate attorney read the reserve study and the 85 percent notice if one exists. New Jersey purchases include an attorney review period, and the buyer's attorney will read the same documents. You want to see them first.
If you own on the river side of River Road, add the flood question to the list. My post on selling a home in a flood zone near the Edgewater waterfront covers the disclosure side.
Frequently asked questions
Can my condo association refuse to give me the reserve study?
New Jersey's Condominium Act requires the association to keep its accounting records open to inspection by unit owners, and the reserve law requires the association to maintain a capital reserve study. Put the request in writing to the management company and the board. If it is refused, ask your real estate attorney to make the request.
Does a special assessment stop me from selling my Edgewater condo?
No. It changes the price conversation and the buyer pool. An assessment approved before closing is usually negotiated between buyer and seller in the contract, and the buyer's lender will want to see how it is being paid. If the building is funding reserves at 85 percent, New Jersey law requires you to give the buyer a copy of the most recent owner notice before the purchase contract is signed. Ask your real estate attorney when and how to deliver it in your sale.
Will the January 2027 reserve rule affect my condo if I am not selling?
Indirectly. The 15 percent minimum applies to loan applications dated on or after January 4, 2027, so it affects buyers and owners who refinance. Many boards are adjusting 2027 budgets now to meet it, which can raise common charges for every owner, including one who holds or rents.
Should I rent my Edgewater condo or sell it?
The answer depends on the building's reserve plan, any assessment on the horizon, the leasing rules, and your own tax position after ten years of rental use. Get the association's documents first, run the tax math with a CPA, and then compare a realistic net rent against a realistic net sale. I can walk you through both numbers in one conversation.
Resources and further reading
- Fannie Mae, "Lender Letter LL-2026-03: Updates to Project Standards and Property Insurance Requirements," March 18, 2026. singlefamily.fanniemae.com
- Freddie Mac, "Guide Bulletin 2026-C," March 18, 2026. guide.freddiemac.com
- New Jersey Legislature, S3992 (2024 to 2025 session), amending the Structural Integrity and Reserve Funding law, signed August 21, 2025. njleg.state.nj.us
- New Jersey Revised Statutes, N.J.S.A. 45:22A-44.3, reserve funding for planned real estate developments, as amended by P.L. 2025, c. 132. law.justia.com
- Greenbaum, Rowe, Smith and Davis LLP, "New Jersey Enacts Legislation to Amend Capital Reserve Funding Requirements for Planned Real Estate Developments," October 6, 2025. greenbaumlaw.com
I am a licensed real estate agent, not an attorney, a lender, a tax advisor, or an insurance agent. This article is general information. Confirm the law as it applies to your building with your real estate attorney, confirm financing with your lender, and confirm tax treatment with your CPA.
Not sure whether to sell, rent, or keep?
Scott Selleck, Broker / Sales Associate with The Selleck Group at KW City Views Realty, helps Bergen County and Hudson County condo owners get the building's answers before the market asks the questions. Licensed since 1993. Over 500 transactions closed.
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Scott Selleck
The Selleck Group, KW City Views Realty
2200 Fletcher Avenue, Suite 502, Fort Lee, NJ 07024
Cell: (201) 970-3960 | Office: (201) 592-8900
[email protected] | SelleckSellsNJ.com | About Scott
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NJ Real Estate Broker / Sales Associate License #9236275
Equal Housing Opportunity. Keller Williams City Views Realty. Each office is independently owned and operated. Broker compensation in New Jersey is fully negotiable and is not set by law or by any board or association of REALTORS®.
