Hawaii Real Estate State Practice Exam

In regards to condominium developments, which of the following statements is true?

1. All board members are elected annually

2. Owners must maintain individual insurance policies

3. The developer maintains full control indefinitely

4. Common elements are owned individually by each resident

The correct answer is: All board members are elected annually

The statement that all board members are elected annually is true in the context of condominium developments. This practice helps ensure that the governance of the condominium association remains responsive to the needs of the owners and provides an opportunity for turnover on the board. Annual elections allow for new perspectives and ideas, which can improve the management of the condominium and foster a sense of community among residents. In general, while some rules may vary depending on specific condominium bylaws, the annual election of board members is a common practice that promotes involvement from all owners. This process is intended to keep the board accountable to the owners and ensure they act in the best interests of the community. In contrast, regarding the other statements, while it is common for owners to maintain individual insurance policies to cover personal belongings and liability outside of the master policy of the condominium association, this is not universally applicable. The idea that the developer maintains full control indefinitely contradicts the typical transition process where control shifts to the owners after the development phase. Lastly, common elements are typically not owned individually by each resident but are instead owned collectively by all unit owners as shared property, meaning each resident has an undivided interest in these common areas.