HOA Fees on Maui : Explained

HOA Fees on Maui: Explained

Homeowners’ Associations have been around in the United States since the mid-20th century. They operate as non-profit organizations whose primary objectives are to organize, maintain, and protect properties along with their owners within planned communities or subdivisions, condominium complexes, and cooperative ownership agreements. There is a wide variety of HOAs across the country, and specifically on Maui. 

Some HOAs can be very small, with only a few properties in the association, while others can involve 1,000s of homeowners. The most common type of HOA on Maui is a condominium community HOA.

There are hundreds of condo complexes on Maui, and their HOAs use the funds they collect from owners to cover things like common area maintenance (landscaping, pool maintenance, etc), building insurance, on-site property management, owner water use, shared utilities, reserves for future repairs, and financial management of the association. 

Why Are HOA Fees on Maui So Expensive?

Relative to condo communities or subdivisions on the mainland, Maui’s HOA fees can seem high at first glance. You’ll also notice that just about everything is more expensive on Maui. So, that means that everything an HOA on Maui uses and needs is more expensive. 

Some HOA fees are as low as 50 dollars a month in neighborhoods where you’re basically just paying to have rules, but no other services. Other HOAs can exceed $8,000 monthly in some of the most elite units in the most elite condo communities like Wailea Point or the Montage Residences in Kapalua.

On average, you should expect to pay between $600 to $1,500/month for HOA fees in condo community on Maui and $150-$400/month for residential subdivision HOAs.

Many HOAs also use a third-party management company to help with administrative functions, and this carries a cost as well. Companies like Destination Maui and Hawaiiana manage several HOAs on Maui.

Property values are also higher than the national average, and many coastal properties are subject to greater wear and tear than non-coastal properties. These factors lead to higher insurance premiums and replacement costs for building components such as roofing, walkways, and elevators. 

Single-Family Neighborhood HOAs

In single-family residential neighborhoods, HOA fees are generally much less expensive than in condo complexes on Maui. Residential HOAs typically do not cover homeowner’s insurance or any utilities.

Rather, they serve more to create and maintain community design standards, to enforce certain behavioral rules to ensure quiet enjoyment for residents, and often to maintain the neighborhood’s private road or gate. 

Why HOAs Get a Bad Wrap (and Why They Aren't All That Bad)

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Social media is full of hilarious examples of HOA presidents or members taking their job a little too seriously and creating unnecessary disputes with homeowners. 

Many people’s first visceral reaction to an HOA is to recoil at the offensive notion that someone else will be telling you what you can and can not do with your property. It’s understandable.

Sometimes you just want to blast music after 10 pm or hang your clothes out to dry on your railing. But the behaviors that HOAs prohibit for you are also behaviors they prohibit for others, and they are determined in a somewhat democratic way. 

Not all HOAs are well managed, however, and this is where most problems arise. Unnecessary expenses can occur when the board isn’t able to, or simply doesn’t, make prudent financial decisions. Corruption can happen when a board member makes an illegal deal with a contractor or other service provider; it's rare on Maui, but I have seen it happen. 

Knowing the Good Ones From the Bad Ones

It’s critical to have competent, trustworthy people managing your association, and that’s why it's important for all members to stay informed, participate in meetings, and vote on important issues. It’s also nice when the on-site property manager answers their phone. Not something you can expect at every association.

Most owners will assume that the board has their best interests in mind and will not concern themselves much with the inner workings. Others who like to participate and offer their candidacy for leadership positions often do thankless, but very necessary work for all members of their community.

Either way, if you’re in an HOA and don’t like what’s going on, you can always get more involved. 

What Will Your HOA Fee on Maui Cover?

When you’re under contract on a property managed by an HOA, you will receive the full condominium association documents within the first 10 days of escrow as part of the M1 provision of the Hawaii Purchase Contract. 

This document set will include the CCRs (covenants, conditions, and restrictions), recent and annual meeting minutes, bylaws, a reserve study, articles of incorporation, house rules, and a description of what is included in the monthly fee.

It’s important to know exactly what the specific community covers or does not cover, as it varies, if only slightly, among condos. 

This is another reason to make sure you’re working with an experienced buyer's agent (cough, cough) who may already know issues with the complex before you have to find out on your own, only once you are under contract. 

What About Assessments?

This is the last word anyone wants to hear when buying, selling, or owning real estate in an HOA. An assessment usually means additional expenses and can muddy the waters when negotiating a sale price, especially when the assessment is currently only a whisper and the exact cost remains to be determined. 

I have worked on many deals where the owners were either currently paying an assessment or actively discussing a future assessment, and it can become tricky to find common ground on who is paying what.

Assessments are used when the association doesn’t have the reserves to cover a needed repair project or a treasury shortfall. In most cases, larger assessments of over 20k per owner allow owners to pay in installments, easing the burden. 

The Montage Residences recently had a 400k assessment per owner to cover exterior building repair due to spalling in the stucco. Assessments can also impact short-term rental income. In the case of the Montage, each building was shut down for 6 months for the work, meaning each of those owners missed 6 months of rental revenue while still having to pay their full property taxes and HOA fees.

How To Negotiate An Assessment When Buying

As a buyer, it's best to always include in the purchase contract that the seller will pay any current assessments and/or for loss of use. If a future assessment is on the horizon, it's important to track down the appropriate board member to at least get an idea of the projected cost. They are usually reluctant to give an estimate, but we have to insist. 

You will also receive a disclosure from the association as part of the association document review contingency. This disclosure, known as RR105c, includes a specific section on assessments. So, if the owner has had their head in the sand and wasn’t aware of an upcoming assessment, the RR105C will make sure we are.

Have Questions About a Specific HOA on Maui?

Having worked on a wide range of properties around the island, I have encountered a variety of HOA issues and have access to current information about almost all of them.

If you are interested in a specific community's HOA policies, potential issues, or are just curious what the HOA covers in that complex or neighborhood, feel free to email me at evan@mauieliteproperty.com or call me at 808-214-4799. 

Get In Touch With Evan!

Evan Harlow ranks among the best real estate agents on Maui annually and is in the top 1% of Coldwell Banker agents worldwide in production. Evan has the expertise, experience, and work ethic to help you achieve your real estate buying and selling goals. We promise exceptional service and support from the beginning of the process through closing and beyond. See what Evan's clients are saying on Google.

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