Bill Text: HI SB2212 | 2016 | Regular Session | Introduced
Bill Title: Judiciary; Condominium Court Pilot Program; Small Claims Division; Oahu; Condominium Education Trust Fund
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2016-01-22 - Referred to CPH/JDL, WAM. [SB2212 Detail]
Download: Hawaii-2016-SB2212-Introduced.html
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THE SENATE |
S.B. NO. |
2212 |
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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 THE condominium court pilot program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. (a) There is established the condominium court pilot program in the small claims division of the district court of the first circuit of the State, to be administered by the judiciary, to provide efficient and cost-effective condominium dispute resolution.
(b) Under the condominium court pilot program:
(1) A condominium court shall be held at the district courthouse in the district court of the first circuit, or other duly designated place, by the judge or judges of the condominium court; provided that the condominium court shall not be deemed to be "other courts" as that term is used in article VI, section 1, of the state constitution;
(2) The chief justice of the supreme court shall designate a condominium judge or judges for the district court of the first circuit, as may be necessary; provided that if the volume of condominium cases in which a condominium judge presides is not adequate to provide a condominium court judge with a full time docket, the judge may hear cases arising from other areas of law. If more than one judge is designated for the condominium court, the chief justice shall designate one of the judges as senior judge. The chief justice may temporarily assign a condominium court judge to preside in another circuit when the chief justice determines that the urgency of one or more cases in the district court or the volume of the cases in the district court so requires; and
(3) The condominium court shall have exclusive, original jurisdiction over all proceedings, including proceedings for declaratory judgment on the validity of agency rules authorized under chapter 91, Hawaii Revised Statutes, arising under chapters 514A and 514B, Hawaii Revised Statutes; provided that upon the motion of a party or sua sponte by the chief justice, the chief justice may assign to the condominium court issues before the court when the chief justice determines that due to their subject matter the assignment is required to ensure the uniform application of condominium laws throughout the State or to otherwise effectuate the purposes of this Act.
(c) In any case in which it has jurisdiction, the condominium court shall exercise general equity powers as authorized by law. Nothing in this chapter shall be construed to limit the jurisdiction and authority of any judge, designated as judge of a condominium court, to matters within the scope of this chapter.
(d) The supreme court shall adopt rules regarding the administration, operation, and procedures of the condominium court.
(e) The judiciary shall submit a report to the legislature no later than twenty days prior to the convening of the 2017 and 2018 regular sessions on the expenditures, caseload, and results of the condominium court pilot program.
SECTION 2. Section 91-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any interested person may obtain a
judicial declaration as to the validity of an agency rule as provided in
subsection (b) by bringing an action against the agency in the circuit court
or, if applicable, the environmental court[,] or condominium court,
of the county in which the petitioner resides or has its principal place of
business. The action may be maintained whether or not the petitioner has first
requested the agency to pass upon the validity of the rule in question."
SECTION 3. Section 514A-47, Hawaii Revised Statutes, is amended to read as follows:
"§514A-47 Cease and desist orders.
In addition to its authority under section 514A-48, whenever the commission has
reason to believe that any person is violating or has violated section 514A-2,
514A-31 to 514A-49, 514A-61 to 514A-63, 514A-65, 514A-67, 514A-68, 514A-70, 514A-83.5,
514A-84, 514A-85, 514A-95, 514A-95.1, 514A-97, 514A-98, 514A-134, or 514B-72,
or the rules of the commission adopted pursuant thereto, it shall issue and
serve upon the person a complaint stating its charges in that respect and
containing a notice of a hearing at a stated place and upon a day at least
thirty days after the service of the complaint. The person served has the
right to appear at the place and time specified and show cause why an order
should not be entered by the commission requiring the person to cease and
desist from the violation of the law or the rules of the commission charged in
the complaint. If, upon the hearing, the commission is of the opinion that
this chapter or the rules of the commission have been or are being violated, it
shall make a report in writing stating its findings as to the facts and shall
issue and cause to be served on the person an order requiring the person to
cease and desist from the violations. The person, within thirty days after
service upon the person of the report or order, may obtain a review thereof in
the appropriate circuit court[.] or condominium court, as applicable."
SECTION 4. Section 514A-121, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) At the request of any party, any dispute concerning or involving one or more apartment owners and an association of apartment owners, its board of directors, managing agent, or one or more other apartment owners relating to the interpretation, application or enforcement of chapter 514A or the association's declaration, bylaws, or house rules adopted in accordance with its bylaws shall be submitted to arbitration. The arbitration shall be conducted, unless otherwise agreed by the parties, in accordance with the rules adopted by the commission and the provisions of chapter 658A; provided that the Condominium Property Regime Rules on Arbitration of Disputes of the American Arbitration Association shall be used until the commission adopts its rules; provided further that where any arbitration rule conflicts with chapter 658A, chapter 658A shall prevail; provided further that notwithstanding any rule to the contrary, the arbitrator shall conduct the proceedings in a manner which affords substantial justice to all parties. The arbitrator shall be bound by rules of substantive law and shall not be bound by rules of evidence, whether or not set out by statute, except for provisions relating to privileged communications. The arbitrator shall permit discovery as provided for in the Hawaii rules of civil procedure; provided that the arbitrator may restrict the scope of such discovery for good cause to avoid excessive delay and costs to the parties or the arbitrator may refer any matter involving discovery to the circuit court or condominium court, as applicable, for disposition in accordance with the Hawaii rules of civil procedure then in effect."
SECTION 5. Section 514A-122, Hawaii Revised Statutes, is amended to read as follows:
"§514A‑122 Determination of unsuitability. At any time within twenty days of being served with a written demand for arbitration, any party so served may apply to the circuit court in the judicial circuit in which the condominium is located or condominium court, as applicable, for a determination that the subject matter of the dispute is unsuitable for disposition by arbitration.
In determining whether the subject matter of a dispute is unsuitable for disposition by arbitration, a court may consider:
(1) The magnitude of the potential award, or any issue of broad public concern raised by the subject matter underlying the dispute;
(2) Problems referred to the court where court regulated discovery is necessary;
(3) The fact that the matter in dispute is a reasonable or necessary issue to be resolved in pending litigation and involves other matters not covered by or related to chapter 514A;
(4) The fact that the matter to be arbitrated is only part of a dispute involving other parties or issues which are not subject to arbitration under section 514A‑121; or
(5) Any matters of dispute where disposition by arbitration, in the absence of complete judicial review, would not afford substantial justice to one or more of the parties.
Any such application to the circuit court or condominium court, as applicable, shall be made and heard in a summary manner and in accordance with procedures for the making and hearing of motions. The prevailing party shall be awarded its attorneys' fees and costs in an amount not to exceed $200."
SECTION 6. Section 514A-123, Hawaii Revised Statutes, is amended to read as follows:
"§514A‑123 Determination of insurance coverage. In the event of a dispute as
to whether a claim shall be excluded from mandatory arbitration under section
514A‑121(b)(7), any party to an arbitration may file a complaint for
declaratory relief against the involved insurer or insurers for a determination
of whether insurance coverage is unavailable due to the pursuit of action by
arbitration. The complaint shall be filed with the circuit court in the
judicial circuit in which the condominium is located[.] or
condominium court, as applicable. The insurer or insurers shall file an answer to the complaint within
twenty days of the date of service of the complaint and the issue shall be
disposed of by the circuit court or condominium court, as applicable, at a hearing to be held at the
earliest available date; provided that the hearing shall not be held within
twenty days from the date of service of the complaint upon the insurer or
insurers."
SECTION 7. Section 514A-125, Hawaii Revised Statutes, is amended to read as follows:
"§514A‑125 Award; confirming award. The award of the arbitrator shall be in writing and acknowledged or proved in like manner as a deed for the conveyance of real estate, and shall be served by the arbitrator on each of the parties to the arbitration, personally or by registered or certified mail. At any time within one year after the award is made and served, any party to the arbitration may apply to the circuit court of the judicial circuit in which the condominium is located or condominium court, as applicable, for an order confirming the award. The court shall grant the order confirming the award pursuant to section 658A-22, unless the award is vacated, modified, or corrected, as provided in sections 658A-20, 658A-23, and 658A-24, or a trial de novo is demanded under section 514A‑127, or the award is successfully appealed under section 514A‑127. The record shall be filed with the motion to confirm award and notice of the motion shall be served upon each other party or their respective attorneys in the manner required for service of notice of a motion."
SECTION 8. Section 514B-66, Hawaii Revised Statutes, is amended to read as follows:
"§514B-66 Cease and desist orders.
In addition to its authority under sections 514B‑67 and 514B‑68,
whenever the commission has reason to believe that any person is violating or
has violated this part, part V, section 514B‑103, 514B‑132, 514B‑134,
514B‑149, sections 514B‑152 to 514B‑154, section 514B‑154.5,
or the rules of the commission adopted pursuant thereto, it may issue and serve
upon the person a complaint stating its charges in that respect and containing
a notice of a hearing at a stated place and upon a day at least thirty days
after the service of the complaint. The person served has the right to appear
at the place and time specified and show cause why an order should not be
entered by the commission requiring the person to cease and desist from the
violation of the law or rules charged in the complaint. If the commission
finds that this chapter or the rules of the commission have been or are being
violated, it shall make a report in writing stating its findings as to the
facts and shall issue and cause to be served on the person an order requiring
the person to cease and desist from the violations. The person, within thirty
days after service upon the person of the report or order, may obtain a review
thereof in the appropriate circuit court[.] or condominium court, as
applicable."
SECTION 9. Section 514B-71, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The commission shall establish a condominium education trust fund that the commission shall use for educational purposes. Educational purposes shall include financing or promoting:
(1) Education and research in the field of condominium management, condominium project registration, and real estate, for the benefit of the public and those required to be registered under this chapter;
(2) The improvement and more efficient administration of associations;
(3) Expeditious and inexpensive procedures for
resolving association disputes; [and]
(4) Support for mediation of condominium related
disputes[.]; and
(5) The condominium court pilot program, established pursuant to Act , Session Laws of Hawaii 2016."
SECTION 10. Section 514B-72, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Each project or association with more than five units, including any project or association with more than five units subject to chapter 514A, shall pay to the department of commerce and consumer affairs:
(1) A condominium education trust fund fee within one year after the recordation of the purchase of the first unit or within thirty days of the association's first meeting, and thereafter, on or before June 30 of every odd-numbered year, as prescribed by rules adopted pursuant to chapter 91; and
(2) Beginning with the July 1, 2015, biennium
registration, an additional annual condominium education trust fund fee in an
amount equal to the product of $1.50 times the number of condominium units
included in the registered project or association to be dedicated to supporting
mediation of condominium related disputes[.] and the condominium
court pilot program, established pursuant to Act , Session
Laws of Hawaii 2016. The additional condominium education trust fund fee
shall total $3 per unit until the commission adopts rules pursuant to chapter
91. On June 30 of every odd-numbered year, any unexpended additional amounts
paid into the condominium education trust fund and initially dedicated to
supporting mediation of condominium related disputes[,] and the condominium
court pilot program, as required by this paragraph, shall be used for
educational purposes as provided in section 514B-71(a)(1), (2), [and]
(3)[.], and (5)."
SECTION 11. Section 514B-111, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The circuit court of the judicial circuit in which a condominium is located or condominium court, as applicable, may excuse compliance with any of the following provisions in a declaration or bylaws if it finds that the provision unreasonably interferes with the association's ability to manage the common property, administer the condominium property regime, or carry out any other function set forth in the declaration or bylaws, and that compliance is not necessary to protect the legitimate interests of the members or lenders holding security interests:
(1) A provision limiting the amount of any assessment that can be levied against individually owned property;
(2) A provision requiring that an amendment to the declaration or bylaws be approved by lenders;
(3) A provision requiring approval of at least sixty-seven per cent of the common interest to adopt an amendment pursuant to section 514B‑32(a)(11) or section 514B‑108(e); provided that the amendment does not:
(A) Prohibit or materially restrict the use or occupancy of, or behavior within, individually owned units;
(B) Change the basis for allocating voting rights or assessments among unit owners; or
(C) Apply to less than all of the unit owners;
(4) A requirement that an amendment to the declaration be signed by unit owners; or
(5) A quorum requirement for meetings of unit owners."
SECTION 12. Section 514B-151, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) In any project where the association is a lessor or sublessor, the association shall fulfill its obligations under this section by appointing independent counsel to represent the lessees in the negotiations and proceedings related to the rent renegotiation. The lessees' counsel shall act on behalf of the lessees in accordance with the vote or written consent of a majority of the lessees casting ballots or submitting written consents as determined by the ratio that the common interest appurtenant to each lessee's unit bears to the total common interest appurtenant to the units of participating lessees. Nothing in this subsection shall be interpreted to preclude the lessees from making a decision (by the vote or written consent of a majority of the lessees as described above) to retain other counsel or additional professional advisors as may be reasonably necessary or appropriate to complete the negotiations and proceedings. In the event of a deadlock among the lessees or other inability to proceed with the rent renegotiation on behalf of the lessees, the lessees' counsel may apply to the circuit court of the judicial circuit in which the condominium is located or condominium court, as applicable, for instructions. The association shall not instruct or direct the lessees' counsel or other professional advisors. All costs and expenses incurred under this subsection shall be assessed by the association to the lessees as provided in subsection (a) or (b), as may be applicable."
SECTION 13. Section 514B-162, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) At the request of any party, any dispute concerning or involving one or more unit owners and an association, its board, managing agent, or one or more other unit owners relating to the interpretation, application, or enforcement of this chapter or the association's declaration, bylaws, or house rules adopted in accordance with its bylaws shall be submitted to arbitration. The arbitration shall be conducted, unless otherwise agreed by the parties, in accordance with the rules adopted by the commission and of chapter 658A; provided that the rules of the arbitration service conducting the arbitration shall be used until the commission adopts its rules; provided further that where any arbitration rule conflicts with chapter 658A, chapter 658A shall prevail; and provided further that notwithstanding any rule to the contrary, the arbitrator shall conduct the proceedings in a manner which affords substantial justice to all parties. The arbitrator shall be bound by rules of substantive law and shall not be bound by rules of evidence, whether or not set out by statute, except for provisions relating to privileged communications. The arbitrator shall permit discovery as provided for in the Hawaii rules of civil procedure; provided that the arbitrator may restrict the scope of such discovery for good cause to avoid excessive delay and costs to the parties or the arbitrator may refer any matter involving discovery to the circuit court or condominium court, as applicable, for disposition in accordance with the Hawaii rules of civil procedure then in effect."
2. By amending subsections (c) and (d) to read:
"(c) At any time within twenty days of being served with a written demand for arbitration, any party so served may apply to the circuit court in the judicial circuit in which the condominium is located or condominium court, as applicable, for a determination that the subject matter of the dispute is unsuitable for disposition by arbitration.
In determining whether the subject matter of a dispute is unsuitable for disposition by arbitration, a court may consider:
(1) The magnitude of the potential award, or any issue of broad public concern raised by the subject matter underlying the dispute;
(2) Problems referred to the court where court regulated discovery is necessary;
(3) The fact that the matter in dispute is a reasonable or necessary issue to be resolved in pending litigation and involves other matters not covered by or related to this chapter;
(4) The fact that the matter to be arbitrated is only part of a dispute involving other parties or issues which are not subject to arbitration under this section; and
(5) Any matters of dispute where disposition by arbitration, in the absence of complete judicial review, would not afford substantial justice to one or more of the parties.
Any such application to the circuit court or condominium court, as applicable, shall be made and heard in a summary manner and in accordance with procedures for the making and hearing of motions. The prevailing party shall be awarded its attorneys' fees and costs in an amount not to exceed $200.
(d) In the
event of a dispute as to whether a claim shall be excluded from mandatory
arbitration under subsection (b)(7), any party to an arbitration may file a
complaint for declaratory relief against the involved insurer or insurers for a
determination of whether insurance coverage is unavailable due to the pursuit of
action by arbitration. The complaint shall be filed with the circuit court in
the judicial circuit in which the condominium is located[.] or
condominium court, as applicable. The
insurer or insurers shall file an answer to the complaint within twenty days of
the date of service of the complaint and the issue shall be disposed of by the
circuit court or condominium court, as applicable, at a hearing to be held at the earliest available
date; provided that the hearing shall not be held within twenty days from the
date of service of the complaint upon the insurer or insurers."
3. By amending subsection (f) to read:
"(f) The award of the arbitrator shall be in writing and acknowledged or proved in like manner as a deed for the conveyance of real estate, and shall be served by the arbitrator on each of the parties to the arbitration, personally or by registered or certified mail. At any time within one year after the award is made and served, any party to the arbitration may apply to the circuit court of the judicial circuit in which the condominium is located or condominium court, as applicable, for an order confirming the award. The court shall grant the order confirming the award pursuant to section 658A-22, unless the award is vacated, modified, or corrected, as provided in sections 658A-20, 658A-23, and 658A‑24, or a trial de novo is demanded under subsection (h), or the award is successfully appealed under subsection (h). The record shall be filed with the motion to confirm award, and notice of the motion shall be served upon each other party or their respective attorneys in the manner required for service of notice of a motion."
SECTION 14. Section 514B-163, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Written demand for a trial de novo by any party desiring a trial de novo shall be made upon the other parties within ten days after service of the arbitration award upon all parties and the trial de novo shall be filed in circuit court or condominium court, as applicable, within thirty days of the written demand. Failure to meet these deadlines shall preclude a party from demanding a trial de novo."
SECTION 15. Section 633-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) All district courts, except as otherwise provided, shall exercise jurisdiction conferred by this chapter, and while sitting in the exercise of that jurisdiction, shall be known and referred to as the small claims division of the district court; provided that the jurisdiction of the court when sitting as a small claims division of the district court shall be confined to:
(1) Cases for the recovery of money only where the amount claimed does not exceed $5,000 exclusive of interest and costs, except as provided by section 633‑30;
(2) Cases involving disagreement between landlord and
tenant about the security deposit in a residential landlord-tenant
relationship; [and]
(3) Cases for the return of leased or rented personal
property worth less than $5,000 where the amount claimed owed for that lease or
rental is less than $5,000 exclusive of interest and costs[.]; and
(4) Cases in the district court of the first circuit that arise under chapters 514A and 514B; provided that any related proceeding shall be held in the condominium court established pursuant to Act , Session Laws of Hawaii 2016; provided further that the condominium court shall not have jurisdiction over cases arising under chapters 514A and 514B that pertain to personal injury or past due maintenance fees, fines, or penalties.
This chapter shall not abridge or affect the jurisdiction of the district courts under paragraphs (1) and (3) to determine cases under the ordinary procedures of the court, it being optional with the plaintiff in the cases to elect the procedure of the small claims division of the district court or the ordinary procedures, as provided by rule of court. No case filed in the small claims division after December 31, 1991, shall be removed from the small claims division to be heard under the ordinary procedures of the district court unless the removal is agreed to by the plaintiff. In cases arising under paragraph (2), the jurisdiction of the small claims division of the district court shall be exclusive; provided that the district court, having jurisdiction over a civil action involving summary possession, shall have concurrent jurisdiction with the small claims division of the district court over any security deposit dispute between landlord and tenant in a residential landlord-tenant relationship. In cases arising under paragraph (4), the jurisdiction of the condominium court in the small claims division of the district court of the first circuit shall be exclusive. This subsection shall not abrogate or supersede sections 604-5, 633‑30, and 633-31."
SECTION 16. Matters pending in any state court as of the effective date of this Act may be transferred to the condominium courts as directed by the chief justice of the supreme court, in the chief justice's sole discretion.
SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 18. This Act shall take effect on July 1, 2016; provided that on June 30, 2018, this Act shall be repealed and sections 91-7, 514A-47, 514A-121, 514A-122, 514A-123, 514A-125, 514B-66, 514B-71, 514B-72, 514B-111, 514B-151, 514B-162, 514B‑163, and 633-27, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the effective date of this Act.
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INTRODUCED BY: |
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Report Title:
Judiciary; Condominium Court Pilot Program; Small Claims Division; Oahu; Condominium Education Trust Fund
Description:
Establishes the condominium court pilot program on the island of Oahu, provides the small claims division of the district court of the first circuit with the jurisdiction to hear proceedings arising from certain condominium laws, and requires funding from the condominium education trust fund. Repeals on June 30, 2018.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
