Condominium Reserves in Hawaii

27 Oct

The State of Hawaii requires condo projects to have a certain percentage of the fees they take in held as reserves.  This is basically a bank account that the Association Of Apartment Owners (AOAO) can use to pay for unexpected expenses.  This law was passed to keep condo associations form always instituting special assessments to cover emergencies.  Some complexes don’t have the amount of reserves in their bank accounts that the State has mandated.  So they charge an additional monthly fee, in addition to the regular monthly maintenance fee, until the level of reserves is back up to where it’s supposed to be.  In the event that the reserves don’t cover an unexpected emergency, the AOAO can still require a special assessment.  But when they do that, then they have to start charging that extra monthly fee until the reserves are back up to the State mandated level.