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Frequently Asked Questions
Is co-owning / fractional ownership legal?
YES. As the price of homes and condos in Hawaii has increased, co-ownership has become a much more desirable way for mainland USA residents to own an affordable Hawaii vacation home.
How does fractional ownership differ from owning outright?
The condo is owned by a Hawaii limited liability company set up by the co-owners. Each co-owner is a partner in the LLC, with rights to use the property as determined by the operating agreement set forth by the partners. Each partner owns specific months during the year.
Can I get a mortgage to buy my share of the property?
No. Because the property is wholly-owned by the LLC, partners are not allowed to secure their portions of ownership with a mortgage. Mortgages are typically secured by the property in the case of foreclosure, but that isn't possible in the case of a shared-ownership property.
What's the best way to pay then?
For most homeowners, there is a tremendous amount of equity that you have built on your primary home. You can tap that money by taking out a HELOC (home equity line of credit) on your primary home. Most banks and credit unions offer 10-year HELOCs, and you can repay over time as you like, with only interest due each month. See your bank or credit union for more information.
So how does this work exactly?
The purchase process is very similar to when you bought your home. There are just a few different documents to sign. If you want to buy August, here is the process:
1. Request from the realto a copy of the LLC operating agreement, and you must sign a document stating that you agree to abide by the terms of the LLC operating agreement that all co-owners have agreed to.
2. You sign a purchase agreement document through the realtor.
3. The realtor will present your signed purchase agreement and LLC Operating Agreement to the seller, and the seller forwards those to the managing partner of the LLC notifying them of the sale and requesting that they add you as a new partner. The LLC managing partner will get your legal information, and will draw up a new partner agreement for you to sign at closing. You will transfer funds to the designated title company a few days before closing.
4. At closing, you will receive a signed copy of the partners agreement and LLC Operating Agreement showing that you are the new owner of August. You'll get your key to the front door, and going forward, will have exclusive use of the condo each year during the month of August.
Are prices negotiable?
No. In order to preserve the value for all co-owners, the listing price is not negotiable.
So how does it work after I buy my month?
You will get a key to the door, and have exclusive use of the condo in the month of August each year. As noted in the LLC operating agreement, the condo is for the exclusive use of you, your family and friends. It cannot be rented out or offered as a short term rental. Only the owners, their families, and friends may use the condo. No revenue can be generated from your month of ownership.
How / when do I have to pay ny annual fees?
The managing partner of the LLC sends out a newsletter to all owners in mid-January each year. The newsletter lists shared costs any repairs or maintenance costs incurred during the year as well as the other shared owner expenses such the HOA / property management fees for the year and the property taxes. It also lists the actual utility bill costs for each month for the prior year, and shows what each owner owes for the past year. In 2025, the August owner cost was $1800. Checks are mailed to the managing partner and are due by the end of February each year. The realtor can share with you the 2025 owner newsletter if you'd like to see it.
If I decide down-the-road that I want to sell my month, how do I do that?
Just as you do when selling a home, you list the property for sale through a Maui-licensed realtor and show it on the MLS. The price you may list it at is 1/12 of the price of the last-sold similar property (1 bed, 1 bath) in the Maalaea Banyans building.
It's an easy, low cost. and hassle-free way to own a piece of paradise!