Characteristics of condos include:

Homeowners Association or Association of Unit Owners (HOA or AOUO)

AOUO was previously known as AOAO (Association of Apartment Owners). All condo developments have a condominium association. There is a Board of Directors (BOD), owners, that are elected by the other condo owners and charged with making important decisions. The number of members on the BOD usually depends on the size of the complex. They usually range from 5-7 members. Most condos are managed by a ‘managing agent’ company (Associa, Shore to Shore, etc…). These companies will oversee the Capital Reserves, Maintenance Fees and sometimes manage the personnel (Resident Manager and employees that are not contracted out).

Monthly Maintenance Fees

Monthly maintenance fees, are paid by all residents to help with the maintenance of the building and its common areas, as well as employee salaries. These fees are calculated and voted on by the BOD annually. These fees vary widely. Usually, the older the complex, the higher the fees, but even new complexes can have fees as high as $1000 per month or more. Recommended fees are no more than $500 per month, but you will need to read and understand all of the AOUO documents that escrow will provide. The monthly HOA fee could be based on a the square footage of interior living space. This fee could cover the costs for water, refuse, sewer, landscaping, basic cable TV service, maintenance and electricity of all common elements, pest control, security, pool, capital reserves, payroll for the management/admin of the association, and insurance for the property (although as an individual owner, you still want/need insurance for the unit contents and liability).

Capital Reserve Study

Reserve studies are long range (20 year) budgets that estimate the needed funds for the repair and replacement of large scale items. Each major component of the building is assessed for its current replacement cost, total effective life, and remaining life. This information, along with the balance in the reserve fund, can be used to calculate the amounts needed on an annual or monthly basis to provide (or reserve) enough money to pay for the needed repairs and replacement of the components when they come due. They are usually itemized and the cost calculated by the managing agent or a third party company. These documents are very important to review prior to purchasing a condo

Special Assessment Fees

These are unexpected costs that can be charged to cover repairs that cost more than what is collected in monthly maintenance fees or in the capital reserves (replacing a roof, pool, roadway, etc.). These fees should not occur very often and it is recommended to ask how many a complex has previously had. The BOD approves all special assessment.

House Rules

House rules are one of the most important documents you need to read. Key items to look for include: BBQs on decks, pets, contractor work hours, etc… It is also important to note any monetary fines that may be levied against a homeowner. Some condos have strict rules (color of doormats) and impose heavy fines.


The Condo Bylaws contain information such as: Description of the property and units, insurance requirements, parts of the condo you own (Own/Limited Common Elements and Common Elements), a list of the percentages of ownership (the percentages indicate how much the condo maintenance fees are for each owner), what common areas you can use in conjunction with the other residents, the number of votes that the owner of each unit has. It also includes what types of laundry facilities, storage, recreational facilities, types/sizes of vehicles and pets, subleasing, signs, window treatments and penalties for lack of compliance to the Bylaws.

CC&R and Declaration

Covenants, conditions and restrictions are limitations and rules placed on a group of homes by a builder, developer, neighborhood association and / or homeowner association. All condos and town homes have CC&Rs; however, so do most planned unit developments and established neighborhoods. Some neighborhoods like Maui Meadows have CC&Rs which limit the homeowners from building on certain parts of the land; use of the land and the area used.

Common Areas

Common areas include any area that is part of the condo complex but not owned individually. This usually includes lobbies, on-site gyms, pools, garage, and rooftop decks, among other things.

Limited Common Elements

These areas are usually the parking garage, patios, fences, LCEs costs are paid and maintained by the AOUO. The repair costs should be listed in the maintenance and capital reserve summary.

HRS 514B

Hawaii Revised Statutes 514B replaced 514A in 2006, but most condos just recently started using 514B. The legislative intent of the condominium law (Chapters 514A and 514B) is based on the overriding principles of self-governance by the association, and provides very limited involvement by government. Owners, for the most part, have the responsibility of enforcement, and the majority rules. The condominium law provides owners, boards, and managing agents use of mediation and mandatory arbitration.

AOUO Insurance

Condos typically have a master insurance policy for the building, but residents will have to purchase an individual policy to cover their possessions and structural elements that are not covered in the master policy. Where premiums for the master policy come through homeowners association or monthly maintenance dues, condo owners pay for their individual policies.

Homeowner Insurance

Mortgage lenders will require borrowers to carry homeowners insurance, which is often held in escrow. Coverage for single-family homes can vary based on specific risks and policy limits. Location, the type of property, and replacement value are all considered as well.

Advantages of Condos

  • You don’t have to worry about maintenance. One of the biggest advantages of owning a condo is never having to worry about maintenance. You’ll pay maintenance fees, of course, but most condos take care of tasks like landscaping, external walls, roofs, refuse, pool maintenance.
  • Condos can offer nice amenities. A condo may provide amenities like swimming pools, gym, tennis courts, golf courses, putting greens, libraries, etc…
  • You get a sense of community. Living in a condo can be great for anyone who wants a built-in sense of community and an opportunity to meet new people.

Disadvantages of Condos

  • Rules and covenants can be strict. Condo association rules can make or break your condo purchase. Some associations limit the size or type of pet you can have, or how your condo can be used. The bylaws may restrict the condos that could be rented.
  • Bad neighbors can pose a problem. While you can get stuck with a bad neighbor almost anywhere, they can cause more problems when you live in close quarters.
  • You have less financial control. When you own a condominium, you may have little control over changes in your monthly maintenance fees. You’re subject to a condo board who can decide to raise dues along with special assessments for any project they deem worthy. You don’t have to actually agree to anything, but you do have to pay what the board decides.