Hawaii • Reserve study / underfunding
Is your Hawaii condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Hawaii building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Hawaii requires.
The short answer
Hawaii requires a reserve study and requires the association to fund it. The board must fund reserves at no less than 50% of the study's estimated replacement costs (or 100% under the cash-flow method). A thin reserve is the most common reason a special assessment lands later, so the study-versus-actual-balance gap is the number that matters. CondoSignal reads your reserve study and budget against Hawaii's rules. Free.Hawaii at a glance
Reserve study
Required
Reserve study updated at least every 3 years (HRS 514B-148)
Reserve funding
Required
Funded to the study
Super-lien
Yes
Six months of unpaid assessments take priority over the first mortgage (HRS 514B-146)
Resale disclosure
Cancellation right
Limited — a 5-day right tied to a developer public report; resale relies on the purchase contract
What Hawaii requires
The board must fund reserves at no less than 50% of the study's estimated replacement costs (or 100% under the cash-flow method). Whether a thin reserve is merely risky or actually out of compliance depends on that rule — which is the first thing to establish.
Why underfunding becomes an assessment
No statutory cap. Insurance-driven assessments are increasingly common in the hard post-Lahaina market. The 'percent funded' figure in the study, compared to the actual reserve balance, tells you how exposed you are.
What it means for collection and resale
A foreclosing lender takes title subject to up to six months of association assessments. Hawaii has no mandatory resale certificate, so request the budget, reserve study, master policy, and minutes directly.
Your rights in Hawaii
As a Hawaii owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (limited — a 5-day right tied to a developer public report; resale relies on the purchase contract). None of this is legal advice — confirm against the current statute and a licensed professional in your state.
What to check
- Find the reserve study's 'percent funded' figure.
- Compare the recommended contribution to what's budgeted.
- Confirm whether Hawaii mandates reserve funding.
- Check the remaining life of the roof, elevators, and façade.
- Look for a reserve catch-up or a recent special assessment.
- Check the study's date — an old study understates today's costs.
Sources
- HRS § 514B-148 — reserve study & funding(High)
- HRS § 514B-146 — association liens (6-month priority)(High)
- HRS § 514B-143 — insurance requirements(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Hawaii-licensed professional.
FAQ
Frequently asked questions
Not sure what your documents are really telling you?
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