Hawaii Pre-Licensing National Practice Exam

What is true about the financial obligations of condominium unit owners and cooperative apartment owners?

1. Only condominium owners pay assessments

2. Both must pay assessments

3. Only cooperative apartment owners pay assessments

4. Neither pays assessments

The correct answer is: Both must pay assessments

Both condominium unit owners and cooperative apartment owners have financial obligations that include assessments. In a condominium, owners are responsible for their share of the home's common expenses, which are typically determined by the board of directors and reflect the proportionate share of each owner's interest in the property. These assessments cover maintenance, repairs, and potentially other communal services like landscaping and security. In a cooperative apartment, ownership is a bit different since residents own shares in a corporation that owns the entire building. However, they also share common expenses just like in a condominium, and thus are required to pay assessments. These assessments often cover mortgage payments on the building, property taxes, maintenance costs, and other operational expenses. Therefore, the statement that both condominium unit owners and cooperative apartment owners must pay assessments accurately reflects their financial responsibilities as property owners, underscoring the importance of understanding the financial aspects associated with owning property in these types of arrangements.