Hawaii Condo Due Diligence Checklist

Where Hawaii due diligence deserves the most attention

Reserve Studies and Reserve Funding

`missing_reserve_study` – no documented study per HRS 514B-148.; `reserve_study_older_than_required` – last study >3 years old.; `reserves_funded_below_50%` – reserve account <50% of study.; `major_component_not_included_in_study` – structural or major element omitted.

Structural Inspections and Building Safety

`fire_safety_inspection_missing` – no record of required Honolulu “life safety evaluation” for high-rise.; `pending_fire_sprinkler_install` – building planning sprinkler retrofits as required by law.; `balcony_condition_poor` – noted cracks, rust, or lack of inspection of balconies (no statewide mandate, so owners must check).; `elevator_emergency_power_unchecked` – potential issue under Honolulu fire-eval.

Insurance Requirements and Insurance-Market Risk

`master_policy_excludes_wind` – HOA’s master policy omits wind/hail (high risk in tropics).; `hurricane_deductible_high` – deductible ≥2% of total insurance (implies large owner liability).; `flood_insurance_not_considered` – building in known flood area with no flood plan.; `insurance_surcharge_special_assessment` – recent or pending special levy to cover insurance increases.

Resale Disclosures and Buyer Cancellation Rights

Hawaii does not have a statutorily-mandated “resale certificate” or estoppel procedure for condominiums. (Only new developments require a “public report” under 514B-54 for pre-sale.) When selling a unit, the seller/agent is not required by condo law to provide an association estoppel or financial disclosures beyond normal real estate practice. A residential seller disclosure statement is required for houses (HRS §508D), but not for condominiums per se. Therefore, buyers in Hawaii must be proactive.

Assessments, Special Assessments, and Borrowing

Under HRS 514B-144, the board may levy regular assessments (operating and reserve) as budgeted, with 30-day advance notice to owners. For special assessments (for unexpected expenses or capital projects), the statute does not itself require owner approval; many associations’ bylaws allow the board to assess up to a certain percent of the budget without a vote, but larger assessments often need a member vote (check each governing document).

Association Liens, Foreclosure, and Super-Lien Risk

Hawaii condominium associations have strong lien rights. By HRS §514B-146(a), an association’s lien for unpaid assessments has priority over virtually all other liens. Only real estate taxes and, *unless subsection (j) applies*, earlier recorded first mortgages have priority. In practice, Hawaii’s law creates a 6-month “super-lien”: if a bank forecloses, the association can demand up to 6 months of unpaid assessments from the new owner (see (j)–(k) limits). In other words, a foreclosing lender takes title subject to up to 6 months of HOA fees.