Honolulu Condo Special Assessment Risks Buyers Should Know
Two condos. Same general area. Similar age. Similar view.
One has a monthly maintenance fee of $1,715. The other is $1,316.
Most buyers look at those numbers and immediately think, “Obviously, the cheaper one is the better deal.”
But with older Honolulu condos, it’s usually not that simple.
A lower maintenance fee can sometimes mean a building has been keeping fees low by putting off repairs or not building up enough reserves. Meanwhile, the building with the higher fee may already be paying for major work, insurance increases or a loan from a past special assessment.
In other words: the number on the MLS doesn’t tell you the whole story.
Ask what’s behind them.
In Hawaiʻi, condo associations are required to fund their reserves, but meeting the minimum requirement doesn’t necessarily mean a building is financially comfortable. A building can technically be in compliance and still be one major repair away from a special assessment.
That’s why one of the most important numbers to ask for is the building’s reserve funding percentage.
Think of it like this: if the building knows a roof, elevator or plumbing system will eventually need to be replaced, has it actually been saving enough money to do it?
Or are owners going to get the bill later?
This is where two buildings with similar fees can have very different stories.
One building may have already taken out a loan to pay for major repairs. The owners are now paying that loan back through their monthly maintenance fees.
Another building may have avoided the repair altogether — for now.
So the cheaper building today could end up being the one that hits owners with a big special assessment tomorrow.
Before buying, ask:
Because once you own the condo, those building expenses become your problem too.
If you’ve been following Honolulu’s condo market, you’ve probably noticed that maintenance fees have been climbing.
Insurance is a huge part of that.
Older concrete buildings, rising construction costs and more expensive insurance have put pressure on condo associations across Oʻahu. That means a maintenance fee from even a few years ago may not tell you much about what owners are paying today.
And it’s also why buyers should look beyond whether the current fee feels “high” or “low.”
Sometimes the higher fee means the building is actually dealing with its problems.
Before making an offer, or at least as early as possible, ask for:
This paperwork can tell you much more about a building than the maintenance fee on a listing.
A $1,700 maintenance fee isn’t automatically bad.
And a $1,300 maintenance fee isn’t automatically a bargain.
The better question is: What am I getting for that money, and what expenses might still be coming?
In Honolulu’s older condo buildings, you’re not just buying the unit. You’re buying into the building, its finances, its maintenance history and the decisions its board has made over the years.
Before you fall in love with the view — and we know how easy that is in Hawaiʻi — make sure you know what’s happening behind the numbers.
Because the cheapest condo on paper isn’t always the least expensive one to own.
Specializing in mid-century, modern Hawaii homes, her desire to broaden the scope of the service has been successfully achieved as a 5-time award winner of the Top 100 agents in Hawaii by Hawaii Business Magazine.
