Hawaii HOA & condo compliance, with the statute behind every deadline

Each fiscal year, assess unit owners to fund a minimum of 50% of the estimated replacement-reserves assessments (or 100% under a cash-flow plan), and collect the full amount assessed for that fiscal year. Have the reserve study — if not itself prepared by an independent reserve-study preparer — reviewed by an independent reserve-study preparer not less than every three years.

“The association shall assess the unit owners to either fund a minimum of fifty per cent of the estimated replacement reserves assessments or fund one hundred per cent of the estimated replacement reserves assessments when using a cash flow plan; provided that a new association need not collect estimated replacement reserves assessments until the fiscal year that begins after the association's first annual meeting.”

Unless the declaration or bylaws provide otherwise, purchase and keep in force: property insurance on the common elements for at least full insurable replacement cost (less deductibles); commercial general liability insurance of at least $1,000,000; directors' and officers' liability coverage at a level the board deems reasonable; and, if the condominium has MORE THAN FIVE UNITS, a fidelity bond covering anyone who controls or disburses association funds, sized at $500 per unit (floored at $20,000, capped at $200,000). Flood insurance is also required if the property sits in a FEMA special flood hazard area.

“Commercial general liability insurance against claims and liabilities arising in connection with the ownership, existence, use, or management of the property in a minimum amount of $1,000,000, or a greater amount deemed sufficient in the judgment of the board;”

Meet at least once a year. Every board meeting other than executive session is open to all members, who may participate in deliberation and discussion under the board's own participation rules. Post notice of every board meeting — including the expected agenda items — in prominent locations at least 72 hours before the meeting, or send it to the board at the same time. Executive session is limited to personnel matters, pending or threatened litigation, protecting the association's attorney-client privilege, or protecting the association's position while negotiating a contract, lease, or other commercial transaction, and its general subject must first be announced in open session.

“All meetings of the board, other than executive sessions, shall be open to all members of the association, and association members who are not on the board shall be permitted to participate in any deliberation or discussion, other than executive sessions, pursuant to owner participation rules adopted by the board.”

Each year, have an independent public accountant audit the association's financial accounts and make at least one unannounced verification of the association's cash balance — UNLESS the condominium has fewer than 20 units and a majority of unit owners vote at an association meeting to waive both the audit and the cash-balance verification.

“The association shall require an annual audit of the association financial accounts and no less than one annual unannounced verification of the association's cash balance by a public accountant; provided that if the association is comprised of less than twenty units, the annual audit and the annual unannounced cash balance verification may be waived at an association meeting by a vote of a majority of the unit owners.”

Register with the Real Estate Commission for a two-year term ending June 30 of each odd-numbered year, and complete reregistration by the Commission's own deadline each cycle — missing it makes the association a new applicant and adds a penalty equal to the registration fee.

“The registration shall be for a biennial period with termination on June 30 of each odd-numbered year.”

Meet at least once each year. Every board meeting other than executive session is open to all members, who may participate in deliberation and discussion unless a majority of a quorum of the board votes otherwise. Executive session is limited to personnel matters, pending or threatened litigation, or protecting the association's attorney-client privilege, and its general subject must first be announced in the regular session. No board member may vote by proxy, and a director with a conflict of interest on an issue must disclose it on the record before the vote.

“All meetings of the board of directors, other than executive sessions, shall be open to all members to provide input on the matters being discussed. Members who are not on the board of directors may participate in any deliberation or discussion, other than during executive sessions, unless a majority of a quorum of the board of directors votes otherwise.”

Notify members in writing of any increase in regular assessments at least 30 days before the increase.

“The board of directors shall notify members in writing of any increase in regular assessments at least thirty days prior to the increase.”

Hold the first annual meeting of the association as the association documents provide, but no later than one year after the closing of the first conveyance of a unit to someone other than a developer.

“The first annual meeting of the association shall take place as provided in the association documents, but not later than one year after the closing of the first conveyance of a unit to a person other than a developer.”