Hawaii HOA Reserve Studies

Section 1 — Overview

Hawaii belongs to a small group of states that does two things at once: it requires condominium associations to run a reserve study, and it requires them to fund those reserves. That funding mandate is not new. It predates the national wave of reserve legislation that followed the partial collapse of Champlain Towers South in Surfside, Florida, on June 24, 2021, a disaster that killed 98 people.⁹ The law that governs here is the Hawaii Condominium Property Act, Haw. Rev. Stat. Chapter 514B, which took effect on July 1, 2006 and replaced the older Chapter 514A.¹⁰ Under HRS § 514B-148, a condominium association must build its annual budget on a reserve study, and it must assess owners to fund at least 50 percent of estimated replacement reserves — or 100 percent if it uses a cash flow plan. The statute gives boards no way to waive that floor.¹ Planned communities are a different story. They organize under HRS Chapter 421J, which sets no parallel study or funding mandate and leaves long-term funding to the board's judgment and the recorded declaration.² Nationally, Hawaii sits with the hard-mandate states, alongside California and Florida. What sets it apart is the funding obligation itself, rather than a study-only or inspection-only regime, and a state condominium program run through the Department of Commerce and Consumer Affairs.¹¹ The sections that follow lay out the statutory framework, the compliance obligations by category, and the recent legislative and judicial activity that touches reserves.

Section 2 — The reserve framework under Hawaii law

2A. Condominium reserves and funding under Chapter 514B

HRS § 514B-148 does the work here. Subsection (a)(5) requires the annual budget to include the estimated replacement reserve assessments the association needs to maintain the property, and it ties those numbers to "a reserve study performed by or on behalf of the association."¹ The statute sets no fixed calendar deadline for that first study. But because every annual budget has to rest on a study, a condominium simply cannot adopt a compliant budget without one. If an independent reserve study preparer did not prepare the study, an independent preparer must review it at least once every three years.¹ The statute defines that independent preparer as an organization, company, or individual that holds a reserve study certification from an industry organization, and it makes clear that a managing agent carrying industry reserve study designations does not have a disqualifying conflict of interest.¹

The funding requirement is what sets Hawaii apart. Under subsection (b), the association must assess owners to fund at least 50 percent of the estimated replacement reserves, or 100 percent when it uses a cash flow plan.¹ Subsection (h) defines a cash flow plan as a projection that runs at least 30 years, funds reserves fully every year, and assumes no special assessments or loans except in an emergency.¹ That 30-year horizon comes from Act 62 (2022), which stretched the earlier 20-year projection.¹² The statute computes reserves by formula, drawing on the estimated life and the estimated capital expenditure or major maintenance for each part of the property, and it requires separate designated reserves for any component that exceeds $10,000 while letting the association aggregate components at or below that threshold (subsection (c)).¹

On the question of who prepares the study, Hawaii does not demand a credentialed professional. A board may rely on a good-faith estimate, and subsection (d) protects directors, officers, managing agents, and employees who make a good-faith effort to calculate reserves from liability if the estimate later turns out wrong.¹ The credential requirement kicks in only at the triennial review, and only when an independent preparer did not produce the original study.¹³

The annual disclosure duty sits in subsection (a). The budget summary that goes to owners must state the total reserve balance, the estimated reserve assessments drawn from the study, the amount the association will collect for the fiscal year, and whether it used the percent-funded or the cash-flow method.¹ Act 199 (2023) and Act 157 (2025) tightened both the content and the self-contained format of that summary.⁶

2B. Planned communities and older condominiums

Planned community associations — and many traditional homeowners associations in Hawaii — organize under HRS Chapter 421J, the Planned Community Associations law. It applies to planned community associations that existed as of June 16, 1997 and to every one created after.² Chapter 421J does fold reserve allocations into its definition of "assessment," but it contains nothing like HRS § 514B-148: no mandated reserve study, no minimum funding level.² For a Chapter 421J community, reserve planning becomes a governance decision and a function of fiduciary duty rather than a codified formula, and the recorded declaration controls. Practitioners report that many Chapter 421J boards commission reserve studies anyway, modeled on the condominium standard, because lenders, insurers, and buyers expect to see one.¹⁴

Older condominiums call for a closer look at the handoff from Chapter 514A. Chapter 514B governs every condominium created after July 1, 2006, and Chapter 514A no longer applies to them (HRS § 514B-21).¹⁵ Condominiums validly created under Chapter 514A before that date stay valid, and amendments to Chapter 514B reach condominiums created before July 1, 2006 to the extent the transition provisions allow.¹⁰ The DCCA Real Estate Branch treats Chapter 514A as repealed as of July 1, 2020, with Chapter 514B carrying the transition language for developer public reports and the pre-2006 regimes.¹⁶ The practical test for which framework applies is straightforward: a condominium — a property submitted to a condominium regime by a recorded declaration — falls under Chapter 514B and its reserve mandate, while a non-condominium planned community falls under Chapter 421J.

2C. The condominium program, the declaration, and the fiduciary backstop

Hawaii runs a state condominium program through the Real Estate Commission, which is administratively attached to the DCCA. Every condominium project or association with more than five units must register with the Commission, and it must reregister on a biennial cycle (HRS § 514B-103).⁷ The Commission administers a Condominium Education Trust Fund, established under HRS § 514B-71 and financed by per-unit fees that associations and developers pay under HRS § 514B-72, which supports condominium education, research, and dispute resolution.¹⁷ Condominium managing agents must hold a Hawaii real estate broker's license or register with the Commission as condominium managing agents.¹⁸ The statute also opens alternative routes to resolve disputes: subsidized mediation under HRS § 514B-161, arbitration under HRS § 514B-162, and voluntary binding arbitration under HRS § 514B-162.5.¹⁹

For reserves, the order of precedence matters. HRS § 514B-148(f) provides that the section overrides any conflicting requirement in a declaration, bylaws, or other association document that deals with budgets and reserves — with two exceptions. A document may require collection of more than 50 percent of reserve requirements, and provisions on upgrading common elements survive.¹ The operational point is direct. In Hawaii, reserve funding for a condominium is a statutory obligation that any unit owner can enforce, not simply a matter of board discretion, and a board that fails to prepare a budget and reserve study carries the burden of proving compliance in any enforcement proceeding.¹

Section 3 — Compliance obligations

A. Study and inspection obligations

A condominium association must adopt an annual budget built on a reserve study performed by or on behalf of the association. This applies to condominiums under Chapter 514B, and it is mandatory (HRS § 514B-148(a)(5)).¹ If an independent reserve study preparer did not prepare the study, the association must have one review it at least every three years; this too applies to condominiums and is mandatory.¹ Hawaii sets no statutory on-site or visual inspection interval, so the reserve study preparer and the board decide the timing and scope of any physical inspection.¹ Planned communities under Chapter 421J carry no statutory study or inspection obligation.²

B. Funding obligations

A condominium association must assess owners to fund at least 50 percent of estimated replacement reserves, or 100 percent under a 30-year cash flow plan. This applies to condominiums, it is mandatory, and the declaration cannot push it below the floor (HRS § 514B-148(b), (f)).¹ The association must compute reserves by the statutory life-and-cost formula, with separate designated reserves above the $10,000 component threshold (HRS § 514B-148(c)).¹ Planned communities under Chapter 421J face no statutory funding floor; there, the declaration and board judgment govern.²

C. Disclosure obligations

The annual budget summary that goes to owners must include reserve balances, the estimated reserve assessments drawn from the study, the collection amount, and the funding method the association used. This applies to condominiums and is mandatory (HRS § 514B-148(a), § 514B-144).¹ Act 157 (2025) requires the summary to carry the § 514B-148(a) information on its own, without sending owners to other budget sections.⁶ For resale, the association must make financial records detailed enough to support resale disclosures available to owners and their authorized agents (HRS § 514B-154.5(a)).³ Every condominium project or association with more than five units must register and reregister biennially with the Real Estate Commission (HRS § 514B-103).⁷ Planned communities under Chapter 421J do not register with the Commission.¹⁸

D. Account and governance obligations

An association may spend reserve funds only for reserve purposes, except in defined emergencies, and it may not commingle association funds across activities. This applies to condominiums and is mandatory (HRS § 514B-148, § 514B-149).⁵ A board may not exceed its adopted annual operating budget by more than 20 percent without an emergency or owner approval (HRS § 514B-148(e)).¹ Any unit owner may bring an action to compel compliance with the budget and reserve requirements, and the board bears the burden of proving compliance if it has not prepared a budget and reserve study (HRS § 514B-148(g)).¹ Planned community boards owe fiduciary and statutory duties under Chapter 421J, but the § 514B-148 reserve mechanics do not bind them.²

Section 4 — Recent legislative and judicial activity

A. Recent bills

Hawaii's 2025 session produced three measures that bear on condominium reserves and the financial pressures around them — two that sharpen disclosure and document access, and one that opens a state financing channel for buildings whose reserves have fallen short.

B. Recent appellate rulings

Hawaii's appellate courts have not rewritten reserve law from the bench. Two recent decisions matter for the edges they draw around board authority — over collection, and over the proof a board must bring before it compels capital work.

C. Active legislative debates

The 2026 session kept up the debate over condominium owner education and dispute-resolution infrastructure. Two measures stand out: SB 2433, on Condominium Education Trust Fund owner education, and HB 2580, which would create a DCCA condominium ombudsman office. Neither had been enacted as of the last verification.²⁴

Section 5 — National positioning and related coverage

Hawaii belongs to the group of hard-mandate states. It sits alongside California, where Civil Code § 5550 requires that "[a]t least once every three years, the board shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components" when the replacement value reaches at least one-half of the gross budget, with the board reviewing the study every year,²⁵ and alongside Florida, where SB 4-D — signed by Governor Ron DeSantis on May 26, 2022 — requires a Structural Integrity Reserve Study every 10 years for condominium and cooperative buildings three or more stories tall, and required unit-owner-controlled associations that existed on or before July 1, 2022 to complete an initial study by December 31, 2024.²⁶ What sets Hawaii apart is the longstanding reserve-funding mandate itself, rather than a study-only or structural-inspection regime; its 50 percent floor and cash-flow alternative have been on the books far longer than the post-2021 national wave. That distance separates Hawaii from disclosure-mandate states such as Colorado, where the duty runs to disclosing reserve practices rather than funding to a floor, and from no-mandate states such as Georgia and Iowa, which leave reserves to the governing documents. Hawaii's distinctive combination pairs a reserve-funding mandate with a state condominium program that features association registration and a Condominium Education Trust Fund, administered by the DCCA Real Estate Commission. For a multi-state operator, the practical implication is clear: you cannot run a Hawaii condominium portfolio to a study-and-disclose standard borrowed from another state. The funding floor is enforceable by any owner, and it overrides conflicting governing documents.

HOA Weekly's Hawaii Reserve Studies coverage updates quarterly as the Hawaii Legislature and the Hawaii courts act. Several federal frameworks — the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the FCC's Over-the-Air Reception Devices rule — also apply to Hawaii associations regardless of the state framework.

1. Haw. Rev. Stat. § 514B-148, Association fiscal matters; budgets and replacement reserves (Hawaii State Legislature) ↩
2. Haw. Rev. Stat. § 421J-2, Planned Community Associations, Definitions (Hawaii State Legislature) ↩
3. Haw. Rev. Stat. § 514B-154.5, Association documents to be provided (Hawaii State Legislature) ↩
4. Haw. Rev. Stat. § 514B-83, Developer's public report (Hawaii State Legislature, Chapter 514B) ↩
5. Haw. Rev. Stat. § 514B-149, Association fiscal matters; handling and disbursement of funds (Chapter 514B index) ↩
6. Act 157, Session Laws of Hawaii 2025 (HB70 HD1 SD1 CD1), "Relating to Condominium," effective June 3, 2025 (Legislative Reference Bureau, 2025 Acts) ↩
7. Haw. Rev. Stat. § 514B-103, Association registration requirement; standing consequence of nonregistration (DCCA condominium association registration program) ↩
8. Haw. Admin. Rules § 16-107-65, Calculation of estimated replacement reserves; reserve study; good faith (HAR Title 16, Chapter 107, Subchapter 6) ↩
9. U.S. Government Accountability Office, Report GAO-24-106558, on the June 24, 2021 partial collapse of Champlain Towers South in Surfside, Florida ("Ninety-eight people were killed and many others injured") ↩
10. Haw. Rev. Stat. Chapter 514B, Condominiums (Condominium Property Act; transition provisions; effective July 1, 2006) (Hawaii State Legislature) ↩
11. DCCA Real Estate Branch, Hawaii Revised Statutes governing condominiums and the condominium program ↩
12. 2022 Legislative Update on Act 62 (SLH 2022) amendments to HRS § 514B-148, including the 30-year cash flow projection and triennial independent review ↩
13. DCCA Real Estate Branch FAQ, reserve study preparer review requirement under HRS § 514B-148(a)(5) ↩
14. DCCA Real Estate Branch, Resources for Condominium Owners, Prospective Buyers, and Boards (Budgeting & Reserve Funding) ↩
15. Haw. Rev. Stat. § 514B-21, Applicability to new condominiums (Condominium Property Act, Chapter 514B text) ↩
16. DCCA Real Estate Branch, noting HRS Chapter 514A repealed as of July 1, 2020 ↩
17. Haw. Rev. Stat. § 514B-72, Condominium education trust fund; payments by associations and developers (Hawaii State Legislature); see also § 514B-71, establishment of the fund ↩
18. DCCA condominium association biennial registration instructions, condominium managing agent licensing/registration requirement (HRS § 514B-103) ↩
19. Haw. Rev. Stat. §§ 514B-161, 514B-162, 514B-162.5, Alternative Dispute Resolution (DCCA Real Estate Branch, Chapter 514B, revised Jan. 16, 2025) ↩
20. Act 161, Session Laws of Hawaii 2025 (SB385 SD1 HD1 CD1), "Relating to Condominiums," effective June 3, 2025 (Legislative Reference Bureau, 2025 Acts) ↩
21. Act 296, Session Laws of Hawaii 2025 (SB1044), "Relating to the Stabilization of Property Insurance," approved July 7, 2025; Condominium Loan Program (DCCA Insurance Division release) ↩
22. Wong v. Association of Apartment Owners of Harbor Square, No. SCAP-22-0000552 (Haw. Feb. 29, 2024) (Hawaii Judiciary published opinion) ↩
23. Association of Apartment Owners of Regency Park v. Harder, No. CAAP-20-0000373 (Haw. Ct. App. Sept. 16, 2024) (memorandum opinion, Hawaii Judiciary) ↩
24. Hawaii State Legislature, 2026 Regular Session measures SB2433 (Condominium Education Trust Fund owner education) and HB2580 (proposed DCCA condominium ombudsman office) ↩
25. Cal. Civ. Code § 5550, reserve study and triennial visual inspection of major components (California Legislative Information) ↩
26. Florida Senate Bill 4-D (2022 Special Session D), Structural Integrity Reserve Studies, signed May 26, 2022 (Florida Senate) ↩