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Why are Condo Associations having difficulty regulating their Cash Flow Plans?

A New Reserve Fund Study is expected every 5 years according to Hawaii Condo Law? But what happens over the next 5 years when expenses can cost more and or deferred for later dates or years? Or not raising contributions when required?

Adjustments are necessary if this is not regularly planned. Over time the Association can easily loose track over the coming years. When this happens, this can cause shortfall of funds in Reserves and or increases in costs on deferred expenses that can end up with large unexpected Maintenance Fee increases and or Special Assessments or Loans?

These issues are the responsibility of the Association to inform Owners and potential Buyers with the most recent up to date information in Reserves and ongoing Expenses that will give confidence that the Association is run well. This all can be very confusing and disappointing for Buyers who base their decisions on reviewing the Condo Documents and surprising for the Owners thinking the Association has been well run?

The Board consists of Owners who may not have all the skills of operating a Corporation and therefore managing may be based on their personal financial decisions rather than the decisions required to run a business as a Corporation.

In most cases Owners are unaware of the financial position of the Associations health. This includes Management Companies who may not be well advised or connected to the Associations financial standing either by having lack of information or simply their contract did not require their service for day to day Operations and or Capital Expenses.

However, Condo First Review Ltd. has developed a Reserve Fund Study Cash Flow Plan that can be easily integrated and adjustable in their budgeting. The program includes setting up the system with training and ongoing coaching for the Condo Association. It is cost effective and will save Associations many hours of time and management.

We would love to hear from you if you have any questions.

Contact Carol direct at 780-920-5552 or email

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