HB1824 amends Hawaii’s condominium reserve study disclosure requirements to create a limited waiver option for very small associations. Under the bill, condominium associations with fewer than 20 units and buildings of no more than two stories may, by majority vote of unit owners at a duly noticed meeting, waive the requirement that their reserve study be reviewed by an independent reserve study preparer every three years. The waiver is temporary and applies only to a single three-year period; the association may not waive the review requirement for two consecutive three-year periods. Even when the waiver is used, the association must continue preparing and disclosing annual reserve information, keep the waiver vote in its records, and make it available to unit owners on request.
The bill also revises the required budget summary for condominium associations under section 514B-148, Hawaii Revised Statutes, by clarifying and expanding the information that must be included about reserve funding, reserve study assumptions, fire safety costs in larger counties, and the methodology used to calculate replacement reserve assessments. It preserves the rule that reserve studies not prepared by an independent preparer must be reviewed at least every three years, while expressly stating that a managing agent with industry reserve study designations is not automatically considered to have a conflict of interest for this purpose. The act takes effect upon approval.
Impact
HB1824 narrows the application of Hawaii’s condominium reserve study review requirements by creating a statutory exemption for small, low-rise associations, while leaving the broader reserve disclosure and planning framework intact. It affects section 514B-148 of the Hawaii Revised Statutes and changes what condominium budgets must disclose regarding reserve studies, reserve balances, assessment calculations, and related planning information. The bill primarily impacts small condominium associations, unit owners, managing agents, and reserve study professionals by reducing compliance costs for qualifying associations but preserving transparency safeguards and limiting how often the waiver may be used.
Sentiment
The overall sentiment reflected in the bill text and voting history is favorable and pragmatic. The Legislature’s findings frame the measure as a targeted cost-saving adjustment for small associations that may be disproportionately burdened by mandatory third-party review costs, while still protecting owners through disclosure and limits on repeated waivers. The committee and conference votes were unanimous in the recorded stages, suggesting broad support for the compromise approach embodied in the final conference draft.
Contention
The main point of contention is the balance between reducing costs for small associations and maintaining independent oversight of reserve studies. Supporters of the bill emphasize that very small, low-rise associations may not need the same level of third-party review as larger, more complex condominiums and that the expense can divert money from actual maintenance. The countervailing concern is that waiving independent review could weaken transparency or increase the risk of underfunded reserves and future special assessments, which is why the bill limits the waiver to one three-year period at a time, requires continued annual reserve disclosures, and bars consecutive waivers.