Informing the Legislature that on June 5, 2026, the Governor signed the following bill into law: HB1824 HD1 SD1 CD1 (ACT 100).

2026 Regular Session

Very small Hawaii condo associations may waive third-party reserve study reviews for up to three years while still providing ongoing reserve disclosures to owners.

Received.

#act100

Summary of Bill: HB 1824 (CD1) – Relating to Condominiums (Act 100, 2026)

Purpose and Intent

The bill provides targeted flexibility for small Hawaii condominium associations and ensures continued transparency for unit owners.

It addresses the financial burden of mandatory third-party reserve study reviews on very small associations (fewer than 20 units and buildings of no more than two stories) by allowing a temporary waiver, while preserving owner protections and ongoing disclosure.

Key Provisions and Changes

Optional waiver of third-party reserve study review:

Eligible associations: fewer than 20 units and a building or buildings no more than two stories.
Waiver mechanism: a majority vote of unit owners at a duly noticed meeting can elect to waive the requirement for a third-party reserve study review.
Duration: the waiver applies to a single three-year period and cannot be renewed for two consecutive three-year periods.
Conditions:
The association must continue to prepare and disclose annual reserve information to unit owners.
The waiver vote is recorded in the association’s records and available to unit owners on request.
Nothing in the provision prevents obtaining a reserve study at any time.
A managing agent with industry reserve study designations is not treated as having a conflict of interest for purposes of this waiver.

Budget and reserve disclosure enhancements (Section 2 amendments to §514B-148):

Budget must include a detailed summary with:
Estimated revenues and operating expenses.
Whether the budget is cash or accrual-based.
Estimated costs of fire safety equipment/installations required by county building code for larger counties.
Balance of the total replacement reserves fund as of the budget date.
Estimated replacement reserve assessments and related details:
- Identity and qualifications of the reserve study preparer and any conflicts of interest.
- Any omitted components with basis for omission.
- Planned increases in reserve assessments over a 30-year plan.
- Whether actual past-year estimates were less than the study and the impact on future assessments.
Methods for funding (percent funded vs. cash flow) and assurances that funding method aligns with the reserve study.
The budget summary must provide all required information without cross-referencing other budget sections.

Affected Parties and Impacts

Small associations (fewer than 20 units; buildings no more than two stories) could reduce costs by waiving mandatory third-party reserve study reviews for up to three years, potentially freeing funds for maintenance or operations.

Unit owners retain visibility into reserve planning and financial health through ongoing disclosure requirements.

Associations elected to waive must continue to disclose reserve information and maintain transparency.

Procedural and Timeline Aspects

Effective Date: Act takes effect upon approval (June 5, 2026).

Implementation: Applies to associations meeting the size criteria; waiver is limited to one three-year period per election and cannot be renewed for two consecutive periods.

Related to existing framework: Builds on existing distinctions between large and small associations in Hawaii law, including audit/financial verification provisions.

Overall Impact

Balances cost containment for very small associations with continued financial transparency for owners.

Enhances budget transparency by requiring detailed reserve-related disclosures and clarity on funding mechanisms.