Bill Text: HI HB2482 | 2014 | Regular Session | Introduced
Bill Title: Condominiums; Cumulative Voting; Associations; Board of Directors; Unit Owners; Majority Vote; Clarifying Amendments
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-07-03 - Act 189, 7/1/2014 (Gov. Msg. No. 1292). [HB2482 Detail]
Download: Hawaii-2014-HB2482-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2482 |
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TWENTY-SEVENTH LEGISLATURE, 2014 |
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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. Section 514B-3, Hawaii Revised Statutes, is amended by amending the definition of ""majority" or "majority of unit owners"" to read as follows:
""Majority" or "majority of the unit owners" means the owners of units to which are appurtenant more than fifty per cent of the common interests. Any specified percentage of the unit owners means the owners of units to which are appurtenant such percentage of the common interest."
SECTION 2. Section 514B-23, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) An amendment to the declaration, bylaws, condominium map or other constituent documents authorized by this section may be adopted by the vote or written consent of a majority of the unit owners; provided that any amendment adopted pursuant to this section shall not invalidate the reserved rights of a developer. If an amendment grants to any person any rights, powers, or privileges permitted by this chapter, all correlative obligations, liabilities, and restrictions in this chapter also apply to that person."
SECTION 3. Section 514B-106, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) Not later than the termination of any period of developer control, the unit owners shall elect a board of at least three members; provided that projects created after May 18, 1984, with one hundred or more individual units, shall have an elected board of at least nine members unless the membership has amended the bylaws to reduce the number of directors; and provided further that projects with more than one hundred individual units where at least seventy per cent of the unit owners do not reside at the project may amend the bylaws to reduce the board to as few as five members by the written consent of a majority of the unit owners or the vote of a majority of a quorum at any annual meeting or special meeting called for that purpose. The association may rely on its membership records in determining whether a unit is owner-occupied. A decrease in the number of directors shall not deprive an incumbent director of any remaining term of office."
SECTION 4. Section 514B-107, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) Directors shall not expend association funds for their travel, directors' fees, and per diem, unless owners are informed and a majority approve of these expenses; provided that, with the approval of the board, directors may be reimbursed for actual expenditures incurred on behalf of the association. The board meeting minutes shall reflect in detail the items and amounts of the reimbursements."
SECTION 5. Section 514B-143, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:
"(g) The board, with the vote or written consent of a majority of the unit owners, may require unit owners to obtain reasonable types and levels of insurance. The liability of a unit owner shall include but not be limited to the deductible of the owner whose unit was damaged, any damage not covered by insurance required by this subsection, as well as the decorating, painting, wall and floor coverings, trim, appliances, equipment, and other furnishings.
If the unit owner does not purchase or produce evidence of insurance requested by the board, the directors may, in good faith, purchase the insurance coverage and charge the reasonable premium cost back to the unit owner. In no event is the association or board liable to any person either with regard to the failure of a unit owner to purchase insurance or a decision by the board not to purchase the insurance for the owner, or with regard to the timing of its purchase of the insurance or the amounts or types of coverages obtained."
SECTION 6. Section 514B-145, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:
"(g) Before the board may take the actions permitted under subsection
(a), the board shall adopt a written policy providing for the actions and have
the policy approved by [a majority] the vote [of the unit
owners at an annual or special meeting of the association] or [by the]
written consent of a majority of the unit owners."
SECTION 7. Section 514B-146, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:
"(f) Before the board
or managing agent may take the actions permitted under subsection (e), the
board shall adopt a written policy providing for [such] the actions
and have the policy approved by [a majority] the vote [of the
unit owners at an annual or special meeting of the association] or [by
the] written consent of a majority of the unit owners."
SECTION 8. Section 514B-149, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:
"(b) For purposes of subsection (a), lease rent collections and rental operations shall not include the rental or leasing of common elements that is conducted on behalf of the association or the collection of ground lease rents from individual unit owners of a project and the payment of such ground lease rents to the ground lessor if:
(1) The collection is allowed by the provisions of the declaration, bylaws, master deed, master lease, or individual unit leases of the project;
(2) A management contract requires the managing agent to collect ground lease rents from the individual unit owners and pay the ground lease rents to the ground lessor;
(3) The system of lease rent
collection has been approved at a meeting of the association by a [majority]
vote of [all] a majority of the unit owners [at a meeting of
the association]; and
(4) The managing agent or association does not pay ground lease rent to the ground lessor in excess of actual ground lease rent collected from individual unit owners.
(c) (1) All funds collected by an association, or by a managing agent for any association, shall be:
(A) Deposited in a financial institution, including a federal or community credit union, located in the State, pursuant to a resolution adopted by the board, and whose deposits are insured by an agency of the United States government;
(B) Held by a corporation authorized to do business under article 8 of chapter 412;
(C) Held by the United States Treasury;
(D) Purchased in the name of and held for the benefit of the association through a securities broker that is registered with the Securities and Exchange Commission, that has an office in the State, and the accounts of which are held by member firms of the New York Stock Exchange or National Association of Securities Dealers and insured by the Securities Insurance Protection Corporation; or
(E) Placed through a federally insured financial institution located in the State for investment in certificates of deposit issued through the Certificate of Deposit Account Registry Service in federally insured financial institutions located in the United States.
(2) All funds collected by an association, or by a managing agent for any association, shall be invested only in:
(A) Deposits, investment certificates, savings accounts, and certificates of deposit;
(B) Obligations
of the United States government, the State of Hawaii, or their respective
agencies; provided that those obligations shall have stated maturity dates no
more than ten years after the purchase date unless approved otherwise by [a
majority] the vote [of the unit owners at an annual or special
meeting of the association] or [by] written consent of a majority of
the unit owners;
(C) Mutual
funds comprised solely of investments in the obligations of the United States
government, the State of Hawaii, or their respective agencies; provided that
those obligations shall have stated maturity dates no more than ten years after
the purchase date unless approved otherwise by [a majority] the vote
[of the unit owners at an annual or special meeting of the association]
or [by] written consent of a majority of the unit owners; or
(D) Certificates of deposit issued through the Certificate of Deposit Account Registry Service in an amount at least equal in their market value, but not to exceed their par value, to the amount of the deposit with the depository;
provided that before any investment longer than one year is made by an association, the board must approve the action; and provided further that the board must clearly disclose to owners all investments longer than one year at each year's association annual meeting.
Records of the deposits and disbursements shall be disclosed to the commission upon request. All funds collected by an association shall only be disbursed by employees of the association under the supervision of the association's board. All funds collected by a managing agent from an association shall be held in a client trust fund account and shall be disbursed only by the managing agent or the managing agent's employees under the supervision of the association's board."
SECTION 9. Section 514B-150, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The association shall require an annual audit of the association
financial accounts and no less than one annual unannounced verification of the
association's cash balance by a public accountant; provided that if the
association is comprised of less than twenty units, the annual audit and the
annual unannounced cash balance verification may be waived at an association
meeting by a [majority] vote of [all] a majority of the
unit owners [taken at an association meeting]."
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Condominiums; Clarifying Amendments
Description:
Makes technical nonsubstantive amendments to the condominium law.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
