Bill Text: HI HB1863 | 2016 | Regular Session | Introduced
Bill Title: Condominium; Association Foreclosure; Priority
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2016-02-17 - The committees on CPC recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 12 Ayes: Representative(s) McKelvey, Woodson, Belatti, Brower, Creagan, Hashem, C. Lee, Nakashima, Takayama, Fukumoto Chang; Ayes with reservations: Representative(s) Har, San Buenaventura; 0 Noes: none; and 4 Excused: Representative(s) Kawakami, Oshiro, Yamane, McDermott. [HB1863 Detail]
Download: Hawaii-2016-HB1863-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1863 |
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TWENTY-EIGHTH LEGISLATURE, 2016 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to condominiums.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that it is important to ensure a fair distribution of funds when an association forecloses on a condominium. The legislature further finds that when an association foreclosure results in a surplus of proceeds from the sale of the unit after the debt to the association has been paid in full, the proceeds should be distributed to existing junior creditors and the former owner of the unit. Priority for the funds should not be given to the first mortgage holder because the first mortgage holder retains a lien on the property and all of the associated remedies.
The purpose of this Act is to ensure that any surplus proceeds from an association foreclosure be paid to junior creditors and the former owner of the condominium instead of first being paid to the first mortgage holder.
SECTION 2. Section 667-100, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) From the sale proceeds, after paying in the following order:
(1) The association's attorney's fees and costs;
(2) The fees and costs of the power of sale foreclosure; and
(3) The moneys owed to the association[; and
(4) All other liens and encumbrances in the
order of priority as a matter of law],
the balance of the sale proceeds shall be distributed by the association to junior creditors having valid liens on the unit in the order of their priority and not pro rata. Any remaining surplus after payment in full of all valid lien creditors shall be distributed to the unit owner."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Condominium; Association Foreclosure; Priority
Description:
Ensures that any surplus proceeds from an association foreclosure be paid to junior creditors and the former owner of the condominium instead of first being paid to the first mortgage holder.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
