THE SENATE	S.B. NO.	2260
THIRTY-FIRST LEGISLATURE, 2022
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-105, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  No unit owner who requests legal or other information from the association, the board, the managing agent, or their employees or agents, shall be charged for the [reasonable] cost of providing the information [unless the association notifies the unit owner that it intends to charge the unit owner for the reasonable cost.  The association shall notify the unit owner in writing at least ten days prior to incurring the reasonable cost of providing the information, except that no prior notice shall be required to assess the reasonable cost of providing information on delinquent assessments or in connection with proceedings to enforce the law or the association's governing documents.

     After being notified of the reasonable cost of providing the information, the unit owner may withdraw the request, in writing.  A unit owner who withdraws a request for information shall not be charged for the reasonable cost of providing the information].  In the event of a dispute, direct communication between unit owners and the board of directors or attorneys hired by the association shall be reasonably limited to requests and responses for information pertinent to the dispute."

     SECTION 2.  Section 514B-153, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

     "(e)  The managing agent, resident manager, or board shall keep an accurate and current list of members of the association and their current addresses, and the names and addresses of the vendees under an agreement of sale, if any.  The list shall be maintained at a place designated by the board, and a copy shall be available[, at cost,] to any member of the association as provided in the declaration or bylaws or rules and regulations or, in any case, to any member who furnishes to the managing agent or resident manager or the board a duly executed and acknowledged affidavit stating that the list:

     (1)  Will be used by the owner personally and only for the purpose of soliciting votes or proxies or providing information to other owners with respect to association matters; and

     (2)  Shall not be used by the owner or furnished to anyone else for any other purpose.

     A board may prohibit commercial solicitations.

     Where the condominium project or any units within the project are subject to a time share plan under chapter 514E, the association shall only be required to maintain in its records the name and address of the time share association as the representative agent for the individual time share owners unless the association receives a request by a time share owner to maintain in its records the name and address of the time share owner."

     SECTION 3.  Section 514B-154, Hawaii Revised Statutes, is amended to read as follows:

     "§514B-154  Association records; availability; disposal; prohibitions.  (a)  The association's most current financial statement shall be provided to any interested unit owner at no cost or on twenty-four-hour loan, at a convenient location designated by the board.  The meeting minutes of the board of directors, once approved, for the current and prior year shall either:

     (1)  Be available for examination by apartment owners at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board of directors; or

     (2)  Be transmitted to any apartment owner making a request for the minutes, by the board of directors, the managing agent, or the association's representative, within fifteen days of receipt of the request; provided that the minutes shall be transmitted by mail, electronic mail transmission, or facsimile, by the means indicated by the owner, if the owner indicated a preference at the time of the request[; and provided further that the owner shall pay a reasonable fee for administrative costs associated with handling the request.

Costs incurred by apartment owners pursuant to this subsection shall be subject to section 514B‑105(d)].

     (b)  Financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association and delinquencies of ninety days or more shall be available for examination by unit owners at convenient hours at a place designated by the board; provided that[:

     (1)  The] the board may require owners to furnish to the association a duly executed and acknowledged affidavit stating that the information is requested in good faith for the protection of the interests of the association, its members, or both[; and

     (2)  Owners shall pay for administrative costs in excess of eight hours per year].

     Copies of these items shall be provided to any owner upon the owner's request[; provided that the owner pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request].

     (c)  After any association meeting, and not earlier, unit owners shall be permitted to examine proxies, tally sheets, ballots, owners' check-in lists, and the certificate of election; provided that:

     (1)  Owners shall make a request to examine the documents within thirty days after the association meeting; and

     (2)  The board may require owners to furnish to the association a duly executed and acknowledged affidavit stating that the information is requested in good faith for the protection of the interest of the association or its members or both[; and

     (3)  Owners shall pay for administrative costs in excess of eight hours per year].

     The documents may be destroyed ninety days after the association meeting; provided that in the event of a contested election, the documents shall be retained until the contested election is resolved.  Copies of tally sheets, owners' check-in lists, and the certificates of election from the most recent association meeting shall be provided to any owner upon the owner's request[; provided that the owner pays a reasonable fee for duplicating, postage, stationery, and other administrative costs associated with handling the request].

     (d)  The managing agent shall provide copies of association records maintained pursuant to this section and sections 514B‑152 and 514B‑153 to owners, prospective purchasers and their prospective agents during normal business hours[, upon payment to the managing agent of a reasonable charge to defray any administrative or duplicating costs].  If the project is not managed by a managing agent, the foregoing requirements shall be undertaken by a person or entity, if any, employed by the association, to whom this function is delegated.

     (e)  Prior to the organization of the association, any unit owner shall be entitled to inspect as well as receive a copy of the management contract from the entity that manages the operation of the property.

     (f)  Owners may file a written request with the board to examine other documents.  The board shall give written authorization or written refusal with an explanation of the refusal within thirty calendar days of receipt of the request.

     (g)  An association may comply with this part by making information available to unit owners, at the option of each unit owner and at no cost to the unit owner for downloading the information, through an internet site.

     (h)  A managing agent retained by one or more associations may dispose of the records of any association [which] that are more than five years old, except for tax records, which shall be kept for seven years, without liability if the managing agent first provides the board of the association affected with written notice of the managing agent's intent to dispose of the records if not retrieved by the board within sixty days[, which]; provided that the notice shall include an itemized list of the records proposed to be disposed.

     (i)  No person shall knowingly make any false certificate, entry, or memorandum upon any of the books or records of any managing agent or association.  No person shall knowingly alter, destroy, mutilate, or conceal any books or records of a managing agent or association.

     [(j)  Any fee charged to a member to obtain copies of association records under this section shall be reasonable; provided that a reasonable fee shall include administrative and duplicating costs and shall not exceed $1 per page, or portion thereof, except the fee for pages exceeding eight and one-half inches by fourteen inches may exceed $1 per page.]"

     SECTION 4.  Section 514B-154.5, Hawaii Revised Statutes, is amended to read as follows:

     "§514B-154.5  Association documents to be provided.  (a)  Notwithstanding any other provision in the declaration, bylaws, or house rules, if any, the following documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be made available to any unit owner and the owner's authorized agents by the managing agent, resident manager, board through a board member, or the association's representative:

     (1)  All financial and other records sufficiently detailed in order to comply with requests for information and disclosures related to the resale of units;

     (2)  An accurate copy of the declaration, bylaws, house rules, if any, master lease, if any, a sample original conveyance document, and all public reports and any amendments thereto;

     (3)  Detailed, accurate records in chronological order of the receipts and expenditures affecting the common elements, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred and monthly statements indicating the total current delinquent dollar amount of any unpaid assessments for common expenses;

     (4)  All records and the vouchers authorizing the payments and statements kept and maintained at the address of the project, or elsewhere within the State as determined by the board, subject to section 514B-152;

     (5)  All signed and executed agreements for managing the operation of the property, expressing the agreement of all parties, including but not limited to financial and accounting obligations, services provided, and any compensation arrangements, including any subsequent amendments;

     (6)  An accurate and current list of members of the condominium association and the members' current addresses and the names and addresses of the vendees under an agreement of sale, if any.  A copy of the list shall be available, at cost, to any unit owner or owner's authorized agent who furnishes to the managing agent, resident manager, or the board a duly executed and acknowledged affidavit stating that the list:

          (A)  Shall be used by the unit owner or owner's authorized agent personally and only for the purpose of soliciting votes or proxies or for providing information to other unit owners with respect to association matters; and

          (B)  Shall not be used by the unit owner or owner's authorized agent or furnished to anyone else for any other purpose;

     (7)  The association's most current financial statement, at no cost or on twenty-four-hour loan, at a convenient location designated by the board;

     (8)  Meeting minutes of the association, pursuant to section 514B-122;

     (9)  Meeting minutes of the board, pursuant to section 514B-126, which shall be:

          (A)  Available for examination by unit owners or owners' authorized agents at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board; or

          (B)  Transmitted to any unit owner or owner's authorized agent making a request for the minutes within fifteen days of receipt of the request by the owner or owner's authorized agent; provided that[:

              (i)  The] the minutes shall be transmitted by mail, electronic mail transmission, or facsimile, by the means indicated by the owner or owner's authorized agent, if the owner or owner's authorized agent indicated a preference at the time of the request; [and

             (ii)  The owner or owner's authorized agent shall pay a reasonable fee for administrative costs associated with handling the request, subject to section 514B-105(d);]

    (10)  Financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association, and any documents regarding delinquencies of ninety days or more shall be available for examination by unit owners or owners' authorized agents at convenient hours at a place designated by the board; provided that[:

          (A)  The] the board may require unit owners or owners' authorized agents to furnish to the association a duly executed and acknowledged affidavit stating that the information is requested in good faith for the protection of the interests of the association, its members, or both; [and

          (B)  Unit owners or owners' authorized agents shall pay for administrative costs in excess of eight hours per year;]

    (11)  Proxies, tally sheets, ballots, unit owners' check-in lists, and the certificate of election subject to section 514B-154(c);

    (12)  Copies of an association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B‑152, 514B-153, or 514B-154;

    (13)  A copy of the management contract from the entity that manages the operation of the property before the organization of an association;

    (14)  Other documents requested by a unit owner or owner's authorized agent in writing; provided that the board shall give written authorization or written refusal with an explanation of the refusal within thirty calendar days of receipt of a request for documents pursuant to this paragraph; and

    (15)  A copy of any contract, written job description, and compensation between the association and any person or entity retained by the association to manage the operation of the property on-site, including but not limited to the general manager, operations manager, resident manager, or site manager; provided that personal information may be redacted from the contract copy, including but not limited to the manager's date of birth, age, signature, social security number, residence address, telephone number, non-business electronic mail address, driver's license number, Hawaii identification card number, bank account number, credit or debit card number, access code or password that would permit access to the manager's financial accounts, or any other information that may be withheld under state or federal law.

     (b)  [Subject to section 514B-105(d), copies] Copies of the items in subsection (a) shall be provided to any unit owner or owner's authorized agent upon the owner's or owner's authorized agent's request[; provided that the owner or owner's authorized agent pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request].

     (c)  Notwithstanding any provision in the declaration, bylaws, or house rules providing for another period of time, all documents, records, and information listed under subsection (a), whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be provided no later than thirty days after receipt of a unit owner's or owner's authorized agent's written request, unless a lesser time is provided pursuant to this section or section 514B-152, 514B-153, or 514B‑154, and except as provided in subsection (a)(14).

     (d)  Any documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, may be made available electronically to the unit owner or owner's authorized agent if the owner or owner's authorized agent requests such in writing.

     (e)  An association may comply with this section or section 514B-152, 514B-153, or 514B-154 by making the required documents, records, and information available to unit owners or owners' authorized agents for download through an internet site, at the option of each unit owner or owner's authorized agent and at no cost to the unit owner or owner's authorized agent.

     [(f)  Any fee charged to a unit owner or owner's authorized agent to obtain copies of the association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be reasonable; provided that a reasonable fee shall include administrative and duplicating costs and shall not exceed $1 per page, or portion thereof, except that the fee for pages exceeding eight and one-half inches by fourteen inches may exceed $1 per page.]

     [(g)] (f)  This section shall apply to all condominiums organized under this chapter or any predecessor thereto.

     [(h)] (g)  Nothing in this section shall be construed to create any new requirements for the release of documents, records, or information."

     SECTION 5.  Section 514B-157, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All costs and expenses, including reasonable attorneys' fees, incurred by or on behalf of the association for:

     (1)  Collecting any delinquent assessments against any owner's unit;

     (2)  Foreclosing any lien thereon; or

     (3)  Enforcing any provision of the declaration, bylaws, house rules, and this chapter, or the rules of the real estate commission;

against an owner, occupant, tenant, employee of an owner, or any other person who may in any manner use the property, shall be promptly paid on demand to the association by [such] the person or persons; provided that if the claims upon which the association takes any action are not substantiated, all costs and expenses, including reasonable attorneys' fees, incurred by [any such] the person or persons as a result of the action of the association, shall be promptly paid on demand to [such] the person or persons by the association[.]; provided further that the association shall not be entitled to collect attorney's fees in excess of twenty-five per cent of the original amounts or debts owed pursuant to paragraphs (1) through (3); provided further that any balances of attorney's fees shall be paid for with association funds or reserves, and no attorney representing the association shall directly bill individual owners for services rendered to the association, unless otherwise permitted by court order."

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Condominiums; Associations; Costs; Attorney's Fees; Limitation

 

Description:

Clarifies that no unit owner or authorized agent who requests legal or other information from the association shall be charged for the cost of the association providing the information.  Limits direct communication between unit owners and the board of directors or attorneys hired by the association to reasonable requests and responses for information pertinent to a dispute.  Prohibits associations from collecting attorney's fees in excess of twenty-five per cent of any original amounts or debts owed to the association.  Prohibits attorneys representing associations from direct billing individual unit owners for services rendered to the association, unless permitted by court order.

 

 

 

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