Hawaii mandated annual condo audits in 2006. New York has no equivalent.

In New York, a condo board can deliver its annual financial statement on a spreadsheet with no independent review. State law does not require a certified public accountant to touch it. No statute compels an audit to exist at all, and no state agency has authority to demand one. Hawaii's legislature drew a different line: under HRS § 514B-150, effective July 1, 2006, every condominium association in the state must obtain an annual audit of its financial accounts from a public accountant, plus at least one annual unannounced cash balance verification. Two decades later, New York's Condominium Act still contains no equivalent provision.

What HRS § 514B-150 requires.

The language of HRS § 514B-150 is direct. Every condominium association must commission an annual audit of its financial accounts conducted by a public accountant. The statute also requires at least one unannounced annual verification of the association's cash balance. Both requirements exist by operation of law, not by board vote, and neither can be overridden by board action alone.

One carve-out applies: if the association has fewer than 20 units, the membership can vote to waive the annual audit at an association meeting by simple majority. The waiver reflects the practical reality that audit costs can outpace the benefit in a small building. No comparable size threshold appears in New York's Condominium Act.

The unannounced cash balance verification is worth noting separately. It is designed to detect misappropriation between the association's records and its actual bank accounts, the kind of discrepancy that a standard annual audit might miss if management controls the audit schedule. Hawaii's legislature addressed the problem explicitly. New York's legislature has not.

The practical effect of § 514B-150 is that every Hawaii condo with 20 or more units produces annual financial statements prepared or reviewed by a CPA, not merely compiled by the managing agent. That document is available to unit owners under the association's books-and-records provisions. The audit requirement creates a statutory floor. New York's statutes do not.

The reserve study mandate that accompanies it.

Section 514B-150 does not stand alone. Hawaii pairs the audit requirement with a mandatory reserve study regime under HRS § 514B-148.

Under § 514B-148, a condo board must base its annual budget on a reserve study. That study must be reviewed or updated at least every three years by an independent preparer, and the triennial update must include a physical inspection of the accessible major common elements. Every year, the board reviews the study; every third year, an independent expert does.

The statute also sets a funding floor. The association must collect reserves meeting at least 50 percent of the estimated replacement reserves assessments. A board that adopts a cash flow plan instead must fund at 100 percent of the reserve schedule on a 30-year projection, without projecting special assessments or loans to close gaps. The choice between the two approaches is a board decision; neither option permits the association to simply ignore what the study says.

Hawaii Act 62, effective January 1, 2023, extended the disclosure chain to project inception: developers marketing new condo units must now include annual reserve contribution figures based on a reserve study in the public report delivered to buyers under HRS § 514B-83 as amended. The reserve study therefore runs from sale through the association's full operating life. New York has no statutory equivalent at either end of that chain.

What New York's Condominium Act actually says.

New York Real Property Law Article 9-B addresses financial reporting in RPL § 339-w. The statute requires the board of managers to keep detailed records of receipts and expenditures and to render a written account at least annually to all unit owners. That is the entirety of the financial reporting mandate.

The account must be made available. No statute prescribes its form, specifies that a CPA must prepare or review it, requires an opinion letter, or defines what "detailed records" means in practice. The records are the board's to maintain. An audit of those records is the board's to commission, or not.

New York courts have confirmed that the Business Corporation Law does not extend to most condominium associations. The BCL § 624 inspection rights available to co-op shareholders do not reach condo unit owners. A unit owner's rights under RPL § 339-w are real but bounded: the right to inspect books and records at a reasonable time is not a right to receive an independent audit opinion on those books. Courts have required unit owners seeking access to establish standing, define the records sought with specificity, and file a proceeding in Supreme Court if the board refuses. The statute provides no administrative mechanism, no regulatory body to receive a complaint, and no agency with authority to impose a penalty for noncompliance. The only enforcement path is litigation.

Many New York City condo bylaws do require annual financial statements reviewed by an independent CPA, and those bylaw obligations are enforceable through contract. But the requirement runs no deeper than the bylaw. A board that amends its bylaws to remove the CPA requirement, or an older building whose original bylaws are silent on the point, has no state law backstop. The floor is contractual, not statutory, and it varies building by building across the 10,882 condos in New York City.

Side by side: Hawaii and New York.

What Fannie Mae's August 3 rule change reveals.

Two Fannie Mae rule changes made the reserve study gap more concrete in 2026. Lender Letter LL-2026-03 eliminates the limited review process for established condos effective August 3, 2026: every mortgage on a NYC condo in a project with more than 10 units now requires full underwriting review. For buildings that submit a reserve study to satisfy the reserve threshold, the same letter adds a new requirement: lenders must verify the highest recommended allocation in the study, not a baseline figure. The lending industry is, in effect, imposing a standard that New York statute has never imposed.

Beginning January 4, 2027, buildings that cannot demonstrate reserves at or above 15 percent of annual assessment income are ineligible for conventional financing under the same Lender Letter. That 15 percent floor functions as a private-market proxy for what Hawaii codified as a public-law floor two decades ago.

The difference is where the requirement operates. Fannie Mae's regime works through lending eligibility: a building with inadequate reserves does not face a government audit, mandatory owner disclosure, or state enforcement. It faces the loss of conventional financing at the moment of a unit sale, invisible to the board that set the reserve contribution years earlier. Hawaii's approach operates at the source. The reserve study is an annual planning document, updated by an independent expert every three years, with a statutory minimum funding floor. The audit is an annual verification by a CPA. Both are delivered to unit owners as part of the association's financial disclosures. New York's 14,062 condo and co-op buildings have no comparable statutory guarantee on either document.

Bottom line.

Hawaii's condominium statute has required every association with 20 or more units to commission an annual audit and base its annual budget on a reserve study since July 1, 2006. New York's Condominium Act requires neither. Unit owners in New York can inspect board records if their bylaws permit and the board cooperates. They cannot invoke a statute requiring an audit to exist or a reserve study to be performed. New York bills A8945 and S7600, which would have imposed a mandatory reserve study requirement, were referred to committee in 2025 and received no floor vote before Albany adjourned on June 5, 2026. The gap between what Hawaii requires and what New York requires is not a drafting accident. It is the outcome of thirty years of sessions in which the bills that would have closed it were scheduled for no hearing.

Primary sources: HRS § 514B-150 (audited financials) · HRS § 514B-148 (reserve study) · NY RPL § 339-w · Hawaii Act 62 (2023): Imanaka Asato analysis · NY S7600 · NY A8945

Companion resources: New Jersey mandated reserve studies for condos. New York still hasn't. · What NYC condo and co-op owners can legally demand from the board · Fannie Mae's 15% reserve floor arrives in January · Every NYC condo loan goes to full review on August 3 · No independent audit requirement issue page · No reserve fund requirement issue page · All regulatory gaps →