Bill Text: HI HB849 | 2025 | Regular Session | Introduced
Bill Title: Relating To Condominiums.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-23 - Referred to CPC, JHA, referral sheet 3 [HB849 Detail]
Download: Hawaii-2025-HB849-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
849 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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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-105, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) Subject to any approval requirements and
spending limits contained in the declaration or bylaws, the association may
authorize the board to borrow money for the repair, replacement, maintenance,
operation, or administration of the common elements and personal property of
the project, or the making of any additions, alterations, and improvements
thereto; provided that written notice of the [purpose and use of the funds]
terms of the borrowing is first sent to all unit owners, and [owners
representing fifty per cent of the common interest] a majority of unit
owners vote or give written consent to the borrowing. In connection with the borrowing, including
non-commercial property assessed financing, the board may grant to the lender
the right to assess and collect monthly or special assessments from the unit
owners and to enforce the payment of the assessments or other sums by statutory
lien and foreclosure proceedings. The
cost of the borrowing, including, without limitation, all principal, interest,
commitment fees, and other expenses payable with respect to the borrowing or
the enforcement of the obligations under the borrowing, shall be a common
expense of the project. For purposes of
this section, the financing of insurance premiums by the association within the
policy period shall not be deemed a loan and no lease shall be deemed a loan if
it provides that at the end of the lease the association may purchase the
leased equipment for its fair market value."
SECTION 2. Section 514B-144, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:
"(h) The board, either directly or through
its managing agent or resident manager, shall notify the unit owners in writing
of maintenance fee increases at least thirty days prior to such an increase[.];
provided that no maintenance fee increase shall take effect unless such
increase has gained the vote or written consent of a majority of the unit
owners."
SECTION 3. Section 514B-150, Hawaii Revised Statutes, is amended to read as follows:
"§514B-150 Association fiscal matters; audits[,];
forensic audit; audited financial statement. (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 certified 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 vote of a majority of the unit
owners.
(b)
The board shall make available a copy of the annual audit to each unit
owner at least thirty days prior to the annual meeting [which] that
follows the end of the fiscal year. The
board shall not be required to submit a copy of the annual audit report to an
owner if the proxy form issued pursuant to section 514B‑123(e) is not
marked to indicate that the owner wishes to obtain a copy of the report. If the annual audit has not been completed by
that date, the board shall make available:
(1) An unaudited [year
end] year-end financial statement for the fiscal year to each unit
owner at least thirty days prior to the annual meeting; and
(2) The annual audit to
all owners at the annual meeting, or as soon as the audit is completed, but [not]
no later than six months after the annual meeting.
(c)
If the association's fiscal year ends less than two months prior to the
convening of the annual meeting, the year-to-date unaudited financial statement
may cover the period from the beginning of the association's fiscal year to the
end of the month preceding the date on which notice of the annual meeting is
mailed.
(d) Each association shall have a forensic audit conducted of the association's financial records no less frequently than once every three years; provided that the first forensic audit shall be conducted no later than June 30, 2026. The board shall make available a copy of the forensic audit to each unit owner within thirty days of its completion."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Condominiums; Loans; Monthly Maintenance Fees; Vote; Forensic Audit
Description:
Clarifies that the terms of a loan must first be sent to unit owners and approved by a majority of unit owners' consent to the loan. Requires a majority of unit owners to vote in favor of or provide written consent to maintenance fee increases before they take effect. Requires a forensic audit of an association's financial records no less frequently than once every three years, with the first forensic audit to be completed by 6/30/2026.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
