Hawaii Condo Law

There is a hearing on Thursday, April 19, 2007 at 2:00 p.m. in room 016 on some bills of interest to community associations before a Conference Committee.

House Conferees: Representatives Herkes, Chair; McKelvey, Marumoto
Senate Conferees: Senators Taniguchi, Chair; Espero, Slom

The hearing notice discusses the following bills of interest to community associations:

SB 920, HD1 This bill would require that managing agents obtain the prior written consent to use a condominium association’s owners’ list. If read literally, the provision would require prior written board approval for the managing agent to send out the notice of annual meeting. The bill would also provide that membership lists in the possession of the managing agent or the resident manager are the property of the Association. This is apparently true even if they purchase the owners list from the tax department. Finally, the bill provides that the managing agent, resident manager, or board may not use the information contained in the lists to create any separate list for the purpose of evading this section. It is unclear why the Board is included since they are entitled to authorize the managing agent to use the Association’s list.

SB 1704, HD1 This bill re-enacts portions of Hawaii Revised Statutes Chapter 514A (the old condominium law) that was accidentally repealed last year. In addition, the bill makes some changes that the bill describes as technical and conforming amendments. These are:

• A proposed amendment to HRS §514B-86 relating to the public report
• A proposed amendment to HRS §514B-103 relating to the condominium association’s fidelity bond
• A proposed amendment to Act 93 (2005) relating to a developer converting HRS 514A projects to 514B projects

AS THIS IS A DECISION MAKING MEETING ONLY, NO PUBLIC TESTIMONY WILL BE ACCEPTED. You can of course contact any of the conferees to express your opinions on the bills.

In the year 2000, we were successful in getting condominium associations a limited priority lien for delinquent assessments. The limited priority lien is for up to 6 months of delinquent assessments or $1,800.00, whichever was smaller. This means that a portion of the condominium association’s lien will be paid before the mortgage on the unit. The limited priority lien statute is contained in HRS §514B-146(g) & (h).

As part of a compromise with the mortgage bankers, the law included a couple of provision, including that the limited priority lien would automatically end in December, 2003. In 2003, that sunset date was extended to December 31, 2007.

On April 17, 2007, Governor Lingle signed into law SB923 which repealed the sunset date. This means that the limited priority lien is now a permanent part of the condominium law.