Financial

Understanding and Preparing an HOA Budget

If you are in a position where you are creating an HOA budget for the first time, as part of committee or board member role, or just want to learn more about the process, this article covers the principles of budgeting for an HOA, and a template to create a budget. Each HOA is different, but this should provide a good starting point for most applications. What Is an HOA Budget? An HOA budget is a financial roadmap designed to estimate both revenues and expenses for your association. It should al [...]

Get to Know the Hawaiʻi Green Infrastructure Authority

The Hawaii Green Infrastructure Authority serves as Hawaiʻi’s Green Bank. Green banks are entities that address market gaps to speed up the transition to clean energy and combat climate change. As of January 2023, there are 22 green banks across the U.S., with more in the pipeline. These banks exist worldwide and can be government, quasi-government, or nonprofit organizations. The HGIA operates as part of the state government. Condo Associations may be interested in HGIA favorable capital improv [...]

Report Urges Action to Prevent Future Wildfire Disasters

A recent report from the Insurance Institute for Business & Home Safety (IBHS) offers recommendations on how to rebuild and protect against future wildfires. The report, which follows the tragic wildfire in Lahaina on August 8-9, 2023, that killed at least 102 people and destroyed over 1,500 homes and structures, stresses the need for both individual and community-wide strategies. The study suggests several key measures to help prevent wildfires from becoming catastrophic. These include crea [...]

Hawaii’s Challenging Condo Insurance Situation

It’s been a rough year for Hawaii’s Condominium Associations, with many seeing their master insurance policy costs soar by 300% or more in just one year. Some buildings even faced increases of 900% to 1,300%. Unfortunately, this situation isn’t likely to improve soon. More condos are now carrying master insurance policies that don’t cover the full replacement cost, which could be a problem if a disaster like a hurricane hits. This has forced some buildings to seek expensive insurance on the seco [...]

No STR Moratorium for Maui Disaster Victim Housing

Governor Green announced on March 27, 2024, he is not going to pursue a moratorium on short-term rentals on Maui. He emphasized his administration is committed to working with partners across all counties to crack down on illegal listings and those engaging in deceptive acts and practices. Some complaints include landlords evicting long-term tenants illegally to rent at higher disaster supported rates. If these incidents are validated, the property would not be eligible for rent under the disast [...]

UHERO: Maui Wildfires Not Derailing the State’s Economy

The latest economic forecast from the University of Hawaiʻi Economic Research Organization (UHERO) is better than expected.  The report anticipates the state's financial well-being and recovery following the Maui wildfires. Although the report states only about 1% job growth in 2024, flat visitor arrivals and reduced visitor spending, overall it is not an economic crisis. "All of this is punctuated by the losses that happened on Maui," Carl Bonham, UHERO executive director, said. "And what we're [...]

HOA New Year’s Resolutions to Make Better Communities

As we wrap up 2023, the arrival of a new year signals the perfect time for homeowners’ associations to set some resolutions aimed at enhancing community living. Let's explore some practical and achievable New Year's resolutions for HOA boards. 1. Revise and Update Community Rules A community's governing documents, like its bylaws and CC&Rs, are the backbone of its regulations. It's common for these documents to become outdated over time, potentially causing unintended violations. As part of [...]

Two Funds, Two Different Functions: HOA Operations and Reserves

Funding the ongoing operations of an HOA community stands out as one of the most critical functions of an HOA board — perhaps even the most pivotal. Ensuring the smooth running of day-to-day activities and planning for the long term is key to maintaining a steady flow of funds for a community's effective functioning. It is also an HOA board member's duty to responsibly allocate funds according to guidelines outlined in a reserve study. This study addresses larger issues like roof replacements, n [...]

The New Project Standards for Fannie Mae and Freddie Mac

In September, Fannie Mae and Freddie Mac implemented updated project eligibility standards for condominiums and housing cooperatives. Project standards are specific requirements outlined by Fannie Mae and Freddie Mac. These standards apply to condominium, housing cooperative, or any multi-family common interest ownership association with more than five attached units. Fannie Mae and Freddie Mac purchase loans from mortgage lenders so lenders have access to capital, and can provide mortgages to m [...]

How Will Maui Fires Affect Insurance Rates? 

The Maui wildfires are estimated to cost insurers up to US$3-billion in damages, creating one of the largest insured losses in Hawaii’s history, according to an analyst report. This leads many property owners wondering if the tragedy will result in higher homeowners insurance rates across Hawai‘i. And as natural disasters are escalated by climate change, will policies be adequate or even obtainable? We’ve gathered some experts opinions. The Aug. 8 blazes did the most destruction in Lahaina, but [...]

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