If you are buying a condo on Maui it comes with a six-inch stack of boring but VERY important documents. Below we discuss why Condominium Documents matter in Maui Real Estate.
In Maui, the condominium documents cost $350-$400 and are typically paid for by the seller and given to the buyer to review after opening escrow. If the buyer is financing the purchase the lender requires these documents and will review with their team of experts.
Don't worry, you don’t have to be a lawyer to understand the documents. Condo docs are broken into two categories.
The Operational Documents are typically less "rules-based" and describe the operational procedures and actions of the condominium and operating body.
The RR105c is Very Important and MUST BE REVIEWED
The RR105c in Maui provides the buyer (and the lender if financing) the relevant and current on-goings in the community, addressing potential issues like lawsuits AKA “lis pendens”, insurance basics, 30 days homeowners dues delinquencies, and services or utilities included in the maintenance fees. The RR105c will often show other details as well but the list above is always included.
The RR105c is the main document a buyer should be reviewed during the due diligence period.
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There is a hierarchy of documents and some documents supersede others. Below is a quick view of these documents and keep in mind which document "trumps" others.
Operational documents in Maui Condominiums provide give you a sold view and fee of what’s happening currently in the condo community and can alert you to current and potential issues.
Condo documents can reveal important details about HOA finances, reserve funds, house rules, special assessments, insurance coverage, and more. Before you buy, let our experienced Maui real estate team help you understand what these documents may mean for your investment and future ownership.
Speak With a Maui Condo ExpertThe Declaration is a fundamental document. An attorney creates and files down at the Bureau of Conveyances at the Count of Maui. The Declaration also goes by other names like “covenants, conditions, and restrictions,” AKA "CC&Rs” or some similar verbiage. In the end, they are all the same.
The declaration establishes some basic rules. The declaration often defines the property and will describe the rules regarding common elements like common grounds, common mechanical (plumbing, electric, etc), recreational areas and equipment, sidewalks, hallways, insurance coverage's, what happens in the event of condemnation, maintenance, and many other potential issues. If there are restrictions on rentals of condominium units or provisions relating to timeshares, they’re probably in the Declaration as well.
The declaration will require the common interest community to be operated by an association of owners in the community, AKA homeowners association (HOA). The articles of incorporation are typically filed with the State of Hawaii, Department of Commerce, and Consumer Affairs (DCCA) which creates the legal entity. The articles of incorporation create the legal entity that is the HOA.
Bylaws of a Condominium Association in Maui, Hawaii
Every Condominium Association in Maui, Hawaii needs requirements to govern how they work. Often times the Bylaws will include the following:
The Rules and Regulations are what most people will read as this pertains to the everyday operation and use of the condominium development. Questions like:
The rules and regulations should be very detailed and extensive as this will help the community act responsibly and respectfully.
Amendments are simply revisions to pre-existing rules and policies. When an "amendment" is issued it supersedes the preexisting rules and policies.
Summary of Condominium Documents on Maui, Hawaii
Most people find Condominium documents long and boring. Yes, we agree but it's VERY important to understand the hierarchy and use each doc. Take your time when reviewing these documents. If you have questions we suggest you consult with a real estate attorney who can address all questions and concerns.
Understanding condominium documents is an important part of buying a condo in Maui. From HOA financials and reserve studies to house rules and rental policies, our local experts can help you review the details and answer your questions so you can move forward with confidence.
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