USA – HAWAII Trends and Developments Contributed by: Lisa Broulik, Matthew Cohen, Michelle Chapman and Jon Pang, Case Lombardi, A Law Corporation
This initiative is designed to ensure that visitors con - tribute to the sustainability of the islands. The new fee, which is expected to generate about USD100 million annually, will be used to protect natural resources and make infrastructure more resilient to climate-related disasters. While this tax is likely to have an impact on the short-term rental market, the scope of the impact and the effect on the broader Hawaiʻi real estate mar - ket are not yet known. Condominium Ownership Cost Surge In recent years, Hawaiʻi condominium owners have faced drastic increases in ownership costs, driven primarily by the insurance crisis affecting the condo - minium market. Global reinsurance costs have risen due to an increase in catastrophic events around the world, and Hawaiʻi’s insurance industry faces addi - tional challenges, resulting from its small market size, the aftermath of the recent Maui wildfires, and aging infrastructure across the state. According to figures cited by Hawaiʻi’s Office of the Governor, many condominium associations have seen premiums increase by up to 1,000% over the last few years. While the skyrocketing insurance costs are largely due to recent weather-related disasters – like the Maui wildfires – and future disaster risk, deferred maintenance issues affect numerous projects across the state, with hundreds of condominium associations estimated to have less than 100% replacement cover - age and an estimated 1,200 associations reported to be without full hurricane insurance coverage. Some associations have pursued coverage on the costly secondary market, but the resulting higher premium costs are ultimately absorbed by owners through increased maintenance fees. These cost and cov - erage issues impact condominium property values, mortgage eligibility and resale. In August 2024, the Governor issued an emergency proclamation in an effort to stabilise the insurance market. The proclamation established a joint execu - tive and legislative taskforce, which was intended to implement short-term solutions in the insurance market and recommend legislative proposals. The proclamation also allowed loans to be made to the Hawaiʻi Hurricane Relief Fund (HHRF) and the Hawaiʻi Property Insurance Association (HPIA), and author -
ised HHRF to issue hurricane insurance policies for large condominium buildings. In July 2025, the legis - lature passed Act 296, which expanded HPIA’s ability to provide basic coverage where such coverage is unavailable in the private market, created a loan pro - gramme to help associations fund essential repairs, and mandated a comprehensive study for long-term solutions. According to news reports, some associa - tions reported up to 70% savings on hurricane insur - ance through HHRF. As of early 2026, reinsurance rates have begun to sta - bilise, but have not returned to pre-2023 levels. The Hawaiʻi legislature continues to explore measures for additional relief, including a proposed bill to estab - lish a state-backed insurance company by 1 January 2027. The Land Court Exodus Hawaiʻi historically maintained two parallel sys - tems for real property registration: the “Regular” or “Abstract” system and the “Land Court” system, with the latter being a traditional “Torrens” system using state-backed certificates of title to evidence land ownership. Entry into the Torrens system requires for - mal “registration”. Although the Land Court system was once considered the superior and more secure method for land ownership, it has fallen out of favour among Hawaiʻi landowners, leading to a recent surge in deregistrations. The central problem facing the Land Court system is the crushing backlog in processing time. Legal docu - ments filed with the Land Court require review by the registrar before certification. In the early 2000s, this process typically occurred within a year of filing, but by 2010 the average processing time expanded to three years, and by the early 2020s it ballooned to a six to seven-year delay, where it remains today. The causes of the backlog are well-known – staffing short - ages coupled with an overburdened system that is ill- suited to the modern real estate ownership structures (including condominium and timeshares) – but little has been done to address it. The delays complicate both commercial and residential real estate transac - tions and hinder development.
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