HRS 514B-148 reserves, in plain English

Hawaii does not have a separate reserve study statute. The rules sit in HRS 514B-148, the section on association budgets and replacement reserves, inside the Condominium Property Act (chapter 514B). That placement matters: the study is not a report a board files away, it is the source of the reserve numbers in the budget every owner receives.

What the yearly budget must show

Before the board adopts the annual operating budget, owners get a summary of it. Section 148 and the Real Estate Commission's condominium rules (Hawaii Administrative Rules chapter 16-107, including section 16-107-65) together describe what the summary must show. Among other things:

• the replacement reserves the association has on hand;
• the estimated replacement reserves the association will need to maintain the property, based on a reserve study;
• a general explanation of how that estimate was calculated;
• the amount owners will be assessed for reserves this year, and whether the board used the percent-funded method or a cash flow plan;
• who prepared the study, and any relationship between the preparer and the association. This disclosure may come from the commission's rules rather than the statute itself; check the current wording with the association's attorney.

Read that list as a specification for the study. If a study cannot answer one of those lines, it is not finished.

The 50 percent floor

The board must assess owners enough to fund at least 50 percent of the estimated replacement reserves. A board that uses a cash flow plan instead must fund 100 percent of what the plan calls for. Both are minimums; nothing stops a board from collecting more.

The two methods answer different questions. Percent funding compares the reserves you have with the wear the components have already used up. A cash flow plan projects every replacement over the coming decades and sets contributions so the account never runs dry. Many Hawaii studies show both, and the board picks one for the budget.

Fifty percent is a legal floor, not a comfortable place to sit. An association funded at half carries the other half as a future special assessment or a loan. In an older high-rise with spalling repairs ahead, that gap can run to thousands of dollars per unit.

How the yearly figure is calculated under each method is also shaped by the Real Estate Commission's rules. If your board is close to the line, ask the association's attorney to confirm the calculation before the budget goes out.

Who may prepare the study

The statute does not require an outside firm for every study. An association may prepare its own, often with the manager's help. If it does, the in-house study has to be reviewed by an independent reserve study preparer at least every three years.

Independent means the reviewer has no stake in the association's work, and the statute expects an industry reserve study credential. In practice that means a designation from CAI or from APRA, the two national bodies that award them. Whether a particular credential meets the statute's definition is a question for the association's attorney; asking the reviewer for proof of it is a question for the board.

Our view: an in-house study saves money in the years between visits, but the first study, and any study after major work, should come from someone who walks the roof, the parking structure and the lanai.

Components over $10,000

Hawaii's reserve rules call for separate reserves for each part of the common elements whose replacement is expected to cost more than $10,000. That threshold may sit in the Real Estate Commission's rules (HAR 16-107-65) rather than in section 148 itself, so confirm the current figure with the association's attorney. In a Honolulu tower that list is long: roofing, elevators, the fire alarm panel, booster pumps, the garage deck coating, exterior paint and sealants, lanai railings, and the concrete repair cycle.

Check the component list in your study against that threshold. A study that lumps "building exterior" into one line will not show owners what they are paying for.

Enforcement by owners

Hawaii's condominium law gives owners ways to hold an association to its reserve duties, and some summaries say owners may go to court to enforce them. Exactly where that right sits, and what it covers, is a question for the association's attorney. Either way it changes the conversation: when a board chooses to stay at the floor or to defer a study, it should minute why.

What about planned communities?

Planned community associations, the single-family and townhouse HOAs common in places like Kapolei, Mililani and Waikoloa, are governed by chapter 421J, not chapter 514B. Section 148 does not apply to them in the same way. Whether your HOA must have a reserve study depends on chapter 421J and the association's own documents, so check with the association's attorney. Most lenders and buyers will ask for one either way.

Recent changes

The legislature has amended section 148 in recent sessions, including in 2025. CAI's June 2026 summary of state reserve laws reports that small associations (under 20 units and no more than two stories) may waive the requirement once. We have not been able to confirm the current wording of that waiver ourselves, so treat it as something to check with the association's attorney before relying on it.

The Real Estate Commission also publishes the current text of chapter 514B with its condominium materials, which is a handy copy to give new board members.

A board checklist for the next budget

1. Find the date of the last study, and who prepared it. If it was in-house, note when it was last independently reviewed.
2. Compare this year's reserve contribution with the 50 percent floor (or the full cash flow plan figure).
3. Confirm every large component (the rules use a $10,000 threshold; confirm it) has its own line.
4. Check that the budget summary names the preparer and the method used.
5. If the study is more than three years old, or the building has had major repairs, budget for a study with a site visit.