Hawaii HOA Assessment Limits

Section 1 — Overview: How assessment authority and limits work in Hawaii

Hawaii places assessment authority inside two comprehensive state statutes, and neither caps regular increases by a flat percentage.¹ Condominiums answer to HRS Chapter 514B, the Condominium Property Act, which replaced the older Chapter 514A; the legislature repealed Chapter 514A effective July 1, 2020, with transition provisions in place for regimes created before July 1, 2006.² Planned community associations operate under HRS Chapter 421J, the Planned Community Associations Act.³ For condominiums, the board drives special assessments and regular assessment levels through mandatory replacement-reserve funding — Chapter 514B requires the board to base reserves on a reserve study and fund them at statutory minimums rather than waive them.¹ On the national spectrum, Hawaii is neither a statutory-cap state like California nor a ratification-mechanism UCIOA state; it is a comprehensive non-UCIOA jurisdiction where the distinctive control on condominium assessments is the mandatory reserve obligation rather than a numeric ceiling.¹ The sections below set out the statutory framework, the limits that do and do not exist, and the procedures and recent activity that practitioners need.

Section 2 — The assessment framework

2A. Authority to levy and allocate assessments

For condominiums, the board levies assessments based on a budget it adopts and distributes — or makes available — to unit owners at least annually.⁴ Except for certain special categories, the association charges all common expenses against all units according to the common-interest allocations set out under HRS §514B-41, and the declaration states each unit's share.⁴ The statute defines common expenses to include allocations to reserves, which ties reserve funding directly into the regular assessment.⁵ The board holds the operative power, exercised through the budget; the declaration controls how the association splits costs among units.

For planned communities, assessment authority flows from Chapter 421J and the association's governing documents. Chapter 421J defines an assessment as funds the association collects from members to operate, manage, and maintain common property, and it requires the board to adopt a budget and base assessments on it.³ Chapter 421J prescribes no statutory allocation formula comparable to §514B-41; the declaration sets the allocation among units. The board holds the power to levy, but the source and limits of that power come from the documents rather than the statute.

2B. Limits on regular assessment increases

Neither Chapter 514B nor Chapter 421J caps regular assessment increases by a flat percentage, and Hawaii uses no owner-veto or budget-ratification mechanism. For condominiums, budget adoption under HRS §514B-148 controls the process: the annual budget must include a summary disclosing operating revenues and expenses, the reserve-fund balance, the estimated replacement reserves from a reserve study, and the amount the association must collect to fund those reserves.¹ The mandatory reserve component drives increases in practice: under §514B-148(b), the association must assess owners to fund a minimum of 50 percent of estimated replacement reserves, or 100 percent when using a cash-flow plan.¹ Act 62, Session Laws of Hawaii 2022, effective January 1, 2023, tightened this framework by requiring an independent reserve study preparer to review the study at least every three years and by defining a cash-flow plan as a minimum 30-year projection of the association's future income and expense requirements.¹

These requirements override contrary provisions in an association's declaration or bylaws regarding budget preparation, reserve calculation, and reserve assessment and funding — with one narrow exception: a governing document that requires the association to collect more than 50 percent of reserve requirements survives the override.¹ A declaration may impose a stricter, higher reserve obligation and the stricter control applies; it may not reduce funding below the statutory floor. For planned communities, no reserve-study mandate applies, and increase limits flow entirely from the declaration; the only statutory overlay is the notice requirement discussed below. The consequences here are significant: when a board fails to prepare an annual operating budget and reserve study, it bears the burden of proving compliance in any enforcement proceeding, and any unit owner may hold the board to account.¹

2C. Special assessments, reserves, and emergency assessments

For condominiums, special assessments are a recognized tool, and the reserve framework accounts for them explicitly. The budget summary under §514B-148 must disclose the estimated costs of fire-safety equipment or installations meeting a life-safety evaluation required by the applicable county, and the statute allows the reserve study to forecast a loan or special assessment to fund life-safety components or installation.¹ By definition, a cash-flow reserve plan may not project special assessments or loans except in an emergency; this channels foreseeable capital needs into regular reserve funding rather than surprise levies.¹ For planned communities, the declaration governs special assessments; Chapter 421J's notice statute requires that a proposed special assessment appear on notice for a membership meeting unless the governing documents independently authorize it.⁶ The operational implication is direct: condominium boards must fund reserves at statutory levels and may need special assessments or loans to close gaps, while planned-community practice on special and emergency assessments is declaration-driven.

Section 3 — Assessment limits and procedures in practice

A. Regular assessment increase procedure

Condominiums: The board adopts an annual budget under §514B-148 that must include the reserve calculation and disclose whether funding uses a percent-funded or cash-flow method; the board then makes assessments based on that budget under §514B-144(a).¹ (CONDOMINIUMS) Planned communities: The board adopts a budget under Chapter 421J and must notify members in writing of any increase in regular assessments at least 30 days before the increase takes effect under HRS §421J-9.⁶ (PLANNED COMMUNITIES)

B. Special assessment procedure

For condominiums, no statutory percentage triggers a member approval requirement for a special assessment; the reserve study may forecast one, and the board acts through the budget and assessment process.¹ (CONDOMINIUMS) For planned communities, a proposed special assessment generally must go on notice for a membership meeting unless the governing documents independently authorize it under HRS §421J-3.5.⁶ (PLANNED COMMUNITIES)

C. Caps, ceilings, and override mechanisms

Neither statute imposes a flat percentage cap on regular assessment increases or an owner-veto mechanism.¹ (BOTH) The mandatory condominium reserve funding under §514B-148 cannot simply be waived — the statute overrides contrary declaration or bylaw provisions except those requiring collection of more than 50 percent of reserves, and a cash-flow plan may deviate from its 30-year projection only in an emergency.¹ (CONDOMINIUMS)

D. Notice, documentation, and disclosure tied to assessments

For condominiums, the annual budget summary under §514B-148(a) must disclose the reserve balance, the estimated replacement reserves from the reserve study, how the association computed them, the amount to collect, and the funding method.¹ (CONDOMINIUMS) Disclosure of assessment information at resale runs through the association's documents and statement of account under HRS §514B-154.5, which the Hawaii Supreme Court read to require managing agents to furnish those resale disclosures.⁷ (CONDOMINIUMS) For planned communities, the principal statutory disclosure tied to assessments is the 30-day advance written notice of any regular assessment increase under §421J-9.⁶ (PLANNED COMMUNITIES)

Section 4 — Recent legislative and judicial activity

A. Recent bills

Hawaii's 2025 session moved on two fronts at once: it tightened the reserve-disclosure rules that govern condominium boards and created a new state-backed financing option for associations facing insurability-related repairs. Both measures amend HRS Chapter 514B and reflect the continuing fallout from the 2023 Lahaina wildfire.

B. Recent appellate rulings

The Hawaii Supreme Court issued one ruling in this space during the review period — a decision that sets the damages formula when an association moves to foreclose on an assessment lien without the legal authority to do so.

C. Active legislative debates

Condominium reserve, insurance, and assessment topics stayed active into the 2026 session, with proposals relating to condominium associations and continued attention to property-insurance stabilization. A separate 2025 push to establish a condominium ombudsman office within DCCA reflects ongoing debate over dispute resolution and board accountability.¹³

Section 5 — National positioning and related coverage

Hawaii occupies the comprehensive non-UCIOA position on the assessment-limit spectrum. It is not a statutory-cap state like California, where Cal. Civ. Code §5605 caps regular increases at 20 percent and special assessments at 5 percent of the budget without member approval. Hawaii is also not a ratification-mechanism UCIOA jurisdiction — states such as Alaska, Colorado, Connecticut, Delaware, Vermont, or Washington — that controls increases through an owner veto on the adopted budget. Like Florida, Hawaii uses detailed statutes rather than a percentage cap, and for condominiums the dominant constraint is mandatory replacement-reserve funding. For multi-state operators entering Hawaii, condominium reserve funding is mandatory and shapes the budget from the bottom up; planned-community limits come from the declaration. Hawaii also regulates condominiums through the DCCA Real Estate Commission, unlike most states, although no state agency oversees Chapter 421J planned communities.¹⁴

Caveats

• The reserve-funding percentages and the cash-flow definition come from the current official text of HRS §514B-148; associations should confirm against the latest statute before relying on them, because Hawaii condominium law has seen amendments across multiple recent sessions.
• The exact gubernatorial signing date for HB70 (Act 157) was not confirmed against the bill's measure-status page; the bill-text source confirms enactment and an effective date upon approval in the 2025 session.
• Several insurance-market figures cited as context derive from news reporting and agency statements rather than statutory text; they illustrate the pressure behind assessments and the Act 296 program, not legal requirements.
• This page addresses assessment authority and limits only; collection, lien priority, and foreclosure procedure — including the §514B-146 condominium lien, which allows interest up to 18 percent annually and a six-month super-priority component, and the §421J-10.5 planned-community lien — are addressed in separate coverage.

1. Haw. Rev. Stat. § 514B-148, Association fiscal matters; budgets and replacement reserves (Hawaii State Legislature) ↩
2. DCCA Real Estate Branch, REB Hawaii Revised Statutes (Chapter 514A repealed as of July 1, 2020) ↩
3. Haw. Rev. Stat. ch. 421J, Planned Community Associations (Hawaii State Legislature) ↩
4. Haw. Rev. Stat. § 514B-144, Association fiscal matters; assessments for common expenses (Hawaii State Legislature) ↩
5. Haw. Rev. Stat. § 514B-3, Definitions ("common expenses" include allocations to reserves) (Hawaii State Legislature) ↩
6. Haw. Rev. Stat. § 421J-9, Notification of assessment increases (Hawaii State Legislature) ↩
7. Haw. Rev. Stat. § 514B-154.5, Association documents to be provided (Hawaii State Legislature) ↩
8. S.B. 1044, Act 296, 2025 Haw. Sess. Laws, Relating to the Stabilization of Property Insurance (Hawaii State Legislature) ↩
9. Office of the Governor of Hawaii, News Release: New Condominium Association Loan Program Approved by Governor Green (Act 296 funding and eligibility) ↩
10. H.B. 70, Act 157, 2025 Haw. Sess. Laws, Relating to Condominium (Hawaii State Legislature) ↩
11. S.B. 385, Act 161, 2025 Haw. Sess. Laws, Relating to Condominiums (Hawaii State Legislature) ↩
12. Wong v. Ass'n of Apartment Owners of Harbor Square, No. SCAP-22-0000552 (Haw. 2024) ↩
13. Hawaii State Legislature, Measure Tracking (2025–2026 Sessions) ↩
14. DCCA Real Estate Branch, Condominium FAQs (no state agency oversees Chapter 421J planned communities) ↩