Bill Text: HI HB1639 | 2010 | Regular Session | Introduced
Bill Title: Condominium Property Regimes; Common Expense Assessments
Spectrum: Moderate Partisan Bill (Democrat 7-1)
Status: (Engrossed - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [HB1639 Detail]
Download: Hawaii-2010-HB1639-Introduced.html
Report Title:
Condominium Property Regimes; Common Expense Assessments
Description:
Clarifies the condominium property regime law with respect to common expense assessments.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1639 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to condominium property regimes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that condominium associations are nonprofit entities that are legally obligated to maintain, repair, and replace common elements, maintain replacement reserves, purchase insurance, provide utilities, retain managing agents and other professionals, and incur all other expenses required cooperate and manage condominium projects.
The legislature further finds that when condominium unit owners fail to pay common expense assessments, assessments on the rest of the owners must be increased to make up the deficiency, thereby increasing the burden on the non-defaulting owners and increasing the risk that more owners will go into default.
The legislature further finds that there are many jurisdictions, including but not limited to Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Washington, Washington, D.C., and West Virginia, that have enacted "superlien" statutes providing that condominium associations have first priority to the proceeds of foreclosure sales with respect to six months of common expense assessments. Assessing the purchasers of delinquent units for up to six months of unpaid common expense assessments fairly and equitably balances the interests of mortgagees and condominium associations.
The legislature further finds that substantial changes in the condominium marketplace also warrant a change in the law. The rapid growth of commercial, mixed use, and luxury condominiums since 2000, means that there is wide variation in the amount of monthly common expense assessments. Such assessments may equal or exceed $1,000 per month at some condominiums.
The $1,800 limit on the amount of the special assessment available to condominium association under section 514B-146, Hawaii Revised Statutes, is seriously out of date, and the legislature finds that limiting the special assessment to a fixed amount is inappropriate in light of rapid fluctuations in common expense costs for such things as insurance, utilities, fuel, and similar volatile cost items.
The legislature further finds that the services provided by condominium associations benefit both owners in default and prospective purchasers by maintaining the value of the project and their units. It is inequitable to limit the special assessment to a fixed amount as the amount should include other special assessments levied against a unit in default or against all units generally, including sub-metered or check-metered utility charges that are initially paid by condominium associations but then billed to individual units.
The purpose of this Act is to allow condominium associations to impose all necessary fees and charges relating to defaulting unit owner on the subsequent purchaser of the unit, and to eliminate the statutory limit on the special assessment.
SECTION 2. Section 514B-146, Hawaii Revised Statutes, is amended by amending subsections (g), (h), and (i) to read as follows:
"(g) Subject to this subsection, and subsections (h) and (i), the board
may specially assess the amount of the unpaid [regular monthly common]
assessments for common expenses against a person who, in a judicial or
nonjudicial power of sale foreclosure, purchases a delinquent unit; provided
that:
(1) A purchaser who holds a mortgage on a delinquent unit that was recorded prior to the filing of a notice of lien by the association and who acquires the delinquent unit through a judicial or nonjudicial foreclosure proceeding, including purchasing the delinquent unit at a foreclosure auction, shall not be obligated to make, nor be liable for, payment of the special assessment as provided for under this subsection; and
(2) A person who subsequently purchases the delinquent unit from the mortgagee referred to in paragraph (1) shall be obligated to make, and shall be liable for, payment of the special assessment provided for under this subsection; and provided further that the mortgagee or subsequent purchaser may require the association to provide at no charge a notice of the association's intent to claim lien against the delinquent unit for the amount of the special assessment, prior to the subsequent purchaser's acquisition of title to the delinquent unit. The notice shall state the amount of the special assessment, how that amount was calculated, and the legal description of the unit.
(h) The
amount of the special assessment assessed under subsection (g) shall not exceed
the total amount of unpaid [regular monthly] common expense assessments
that were assessed during the six months immediately preceding the completion
of the judicial or nonjudicial power of sale foreclosure. [In no event
shall the amount of the special assessment exceed the sum of $1,800.]
(i) For purposes of subsections (g) and (h), the following definitions shall apply, unless the context requires otherwise:
"Completion" means:
(1) In a nonjudicial power of sale foreclosure, when the affidavit required under section 667-5 is filed; and
(2) In a judicial foreclosure, when a purchaser is deemed to acquire title pursuant to subsection (b).
"[Regular
monthly common] Common expense assessments" [does not]
include:
(1) Any [other]
special assessment[,] imposed on the unit, [except for a] and
any special assessment imposed on all units as part of a budget adopted
pursuant to section 514B‑148;
(2) Late charges, fines, or penalties;
(3) Interest assessed by the association;
(4) Any lien
arising out of the assessment; [or]
(5) Any fees or
costs related to the collection or enforcement of the assessment, including
attorneys' fees and court costs[.]; and
(6) Any unpaid sub-metered or check-metered utility charges."
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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