There is a hearing on Monday, April 24, 2006 at 10:30 a.m. in room 016 on some bills of interest to community associations before two Conference Committee. The hearing notice discusses the following bills of interest to community associations:
House Conferees: Representatives Herkes/Luke, Co-Chairs; Karamatsu
Senate Conferees: Senators Menor, Chair; Espero, Hogue
HB1935 SD1 This bill would require that the planned community association governing documents be provided by the seller or the seller’s agent when a home in a residential planned community is sold.
House Conferees: Representatives Herkes, Chair; Schatz, Marumoto
Senate Conferees: Senators Menor, Chair; Espero, Hogue
HB3100 SD1 This bill would expand the types of community associations that would receive notice of a non-judicial foreclosure of a unit in one of the communities. Currently, condominium associations and residential cooperatives receive notice of the non-judicial foreclosure if a unit in their communities are being foreclosed. Planned community associations would be added to the list. In addition, it would would limit the amount of a downpayment in a non-judicial foreclosure to 10% of the highest bid amount.
HB3225 SD1 This bill corrects some issues with the Recodification. The prinicpal provisions are:
- Eliminates the repeal of 514A as it applies to existing condominiums where the Recodification does not apply
- Clarifies when 514A applies to existing condominiums
- Changes the definition of “Association” to include associations created under previous condominium statutes
- Provides that most of the management provisions of the Recodification applies to existing condominiums when the events occurs after the effective date of July 1, 2006 and the Recodification does not conflict with the governing documents in a way that it would be an unreasonable impairment of contract (an unreasonable impairment of contract refers to a constitutional standard — the effect is that most procedural provisions of the Recodification management provisions would supercede the governing documents)
- Permits existing condominium associations to adopt amendments to the governing documents to conform to the Recodification upon a majority vote of the owners
- Eliminating the need for an amendment to the Declaration to change common element open spaces or landscaped spaces to other uses
- Permits the Board to approve minor additions to or alterations of the common elements for the benefit of individual units if the additions or alterations can be accomplished without substantial impact on the interests of other owners
- Clarifies that the requirements for leases of the common elements (approval of 67% of the owners required for leases more than 5 years and without a 60 day cancellation provision) does not apply to telecommunications leases pursuant to HRS 514B-140(d)
- Permits the establishment of a fining system by the Board provided that there is an appeal procedure and provides for contesting the fine after payment through mediation, arbitration or “condo court” proceeding.
- Eliminates the notice requirement for cumulative voting if it is provided for in the bylaws
- Excludes the financing of insurance premiums from the requirements for owner approval for borrowing
- Provides that condominiums with more than 100 units can reduce the number of directors by an amendment to the By-Laws
- Provides that condominiums with more than 100 units with more than 75% of the units not occupried by the owners may reduce the number of directors to as few as five upon a vote of a majority of a quorum. Unfortunately, the bill uses the term, “majority of a quorum”. It was a phrase that was eliminated in the recodification because taken literally, it means a little more than 25% for condominiums with a quorum requirement equal to a majority of the owners.
- Clarifies the representatives of legal entities (corporations, partnerships, limited liaibilty companies, etc.) that may serve on the Board
- Eliminates beneficiaries of trusts as individuals that may serve on the Board (trustees continue to be able to serve on the Board)
- Restores the provision that employees of managing agents may serve on the Board, but not serve as an officer for the associations that the agent manages
- Allows associations to correct the percentage of common interest in the project by restatement where the percentages in the declaration does not add up to 100%
- Clarifies that in the absence of protest, any owner can issue a proxy on behalf of the unit owner
- Clarifies that the requirement that managing agents distribute materials requested by the Hawaii Real Estate Commission is at the expense of the condominium association
- Restores more discretion to the Board in determining the types of insurance to be purchased
- Permits a vote of the owners to require all members to acquire an individual insurance policy which usually costs less than two or three hundred dollars a year. These policies provide substantial protections for the members and the association.
- Clarifies when the costs of lease rent renegotiation will be assessed the lessees in a partially converted building.
- Changes the vote requirement for fee conversions by the Association from 75% to 67%.
The bill currently has a defective effective date of July 1, 2050. This was to allow the bill to move forward while still requiring further action by the legislature.
AS THIS IS A DECISION MAKING MEETING ONLY, NO PUBLIC TESTIMONY WILL BE ACCEPTED. You can of course contact any of the conferees.
