Bill Text: HI HB2046 | 2014 | Regular Session | Introduced


Bill Title: Condominiums; Board of Directors; Powers and Duties

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-02-19 - The committee(s) on CPC recommend(s) that the measure be deferred. [HB2046 Detail]

Download: Hawaii-2014-HB2046-Introduced.html

HOUSE OF REPRESENTATIVES

H.B. NO.

2046

TWENTY-SEVENTH LEGISLATURE, 2014

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to condominiums.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Section 514B-104, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Except as provided in section 514B‑105, and subject to the provisions of the declaration and bylaws, the association, even if unincorporated, may:

     (1)  Adopt and amend the declaration, bylaws, and rules and regulations;

     (2)  Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners, subject to section 514B‑148;

     (3)  Hire and discharge managing agents and other independent contractors, agents, and employees;

     (4)  Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium.  For the purposes of actions under chapter 480, associations shall be deemed to be "consumers";

     (5)  Make contracts and incur liabilities;

     (6)  Regulate the use, maintenance, repair, replacement, and modification of common elements;

     (7)  Cause additional improvements to be made as a part of the common elements;

     (8)  Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property; provided that:

         (A)  Designation of additional areas to be common elements or subject to common expenses after the initial filing of the declaration or bylaws shall require the approval of at least sixty-seven per cent of the unit owners;

         (B)  If the developer discloses to the initial buyer in writing that additional areas will be designated as common elements whether pursuant to an incremental or phased project or otherwise, the requirements of this paragraph shall not apply as to those additional areas; and

         (C)  The requirements of this paragraph shall not apply to the purchase of a unit for a resident manager, which may be purchased with the approval of the board;

     (9)  Subject to section 514B‑38, grant easements, leases, licenses, and concessions through or over the common elements and permit encroachments on the common elements;

    (10)  Impose and receive any payments, fees, or charges for the use, rental, or operation of the common elements, other than limited common elements described in section 514B‑35(2) and (4), and for services provided to unit owners;

    (11)  Impose charges and penalties, including late fees and interest, for late payment of assessments and levy reasonable fines for violations of the declaration, bylaws, rules, and regulations of the association, either in accordance with the bylaws or, if the bylaws are silent, pursuant to a resolution adopted by the board and approved by fifty per cent of all unit owners at an annual meeting of the association or by written consent of fifty per cent of all unit owners, that establishes a fining procedure that states the basis for the fine and allows an appeal to the board of the fine with notice and an opportunity to be heard [and providing that if the fine is paid,] within a reasonable time, but no later than ninety days after the issuance of the fine.  Prior to paying the fine, the unit owner shall have the right to initiate a dispute resolution process as provided by sections 514B-161[,] and 514B-162[, or by filing a request for an administrative hearing under a pilot program administered by the department of commerce and consumer affairs];

    (12)  Impose reasonable charges for the preparation and recordation of amendments to the declaration, documents requested for resale of units, or statements of unpaid assessments;

    (13)  Provide for cumulative voting through a provision in the bylaws;

    (14)  Provide for the indemnification of its officers, board, committee members, and agents, and maintain directors' and officers' liability insurance;

    (15)  Assign its right to future income, including the right to receive common expense assessments, but only to the extent section 514B‑105(e) expressly so provides;

    (16)  Exercise any other powers conferred by the declaration or bylaws;

    (17)  Exercise all other powers that may be exercised in this State by legal entities of the same type as the association, except to the extent inconsistent with this chapter;

    (18)  Exercise any other powers necessary and proper for the governance and operation of the association; and

    (19)  By regulation, subject to sections 514B‑146, 514B‑161, and 514B‑162, require that disputes between the board and unit owners or between two or more unit owners regarding the condominium be submitted to nonbinding alternative dispute resolution in the manner described in the regulation as a prerequisite to commencement of a judicial proceeding."

     SECTION 2.  Section 514B-106, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Except as provided in the declaration, the bylaws, subsection (b), or other provisions of this chapter, the board [may] shall act in all instances on behalf of the association.  In the performance of their duties, officers and members of the board shall owe the association and its members a fiduciary duty and exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 414D."

     SECTION 3.  Section 514B-125, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All meetings of the board, other than executive sessions, shall be open to all members of the association, and association members who are not on the board may participate in any deliberation or discussion, other than executive sessions[, unless a majority of a quorum of the board votes otherwise]."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Condominiums; Board of Directors; Powers and Duties

 

Description:

Clarifies fiduciary duties of condominium association boards.  Requires association approval of charges and penalties.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

 

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