Bill Text: HI SB2482 | 2014 | Regular Session | Introduced

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Bill Title: Homeowners Association; Nonjudicial Foreclosure; Publication; Alternate Remedies for Failure to Serve

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2014-03-21 - The committee(s) on JUD recommend(s) that the measure be deferred. [SB2482 Detail]

Download: Hawaii-2014-SB2482-Introduced.html

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THE SENATE	S.B. NO.	2482
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to association alternative power of sale foreclosure process.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that under section 667‑92, Hawaii Revised Statutes, an association is permitted to go to court and continue the association's nonjudicial foreclosure against a missing owner by serving the owner through publication, after a hearing before a judge.  A judge then oversees the process of foreclosure with respect to service of the owner, while allowing the association to continue with its nonjudicial foreclosure, rather than being forced into a more expensive and time-consuming judicial foreclosure.

     However, despite the benefits of this process, the legislature further finds that the wording of section 667‑92(f)(1), Hawaii Revised Statutes, has created a problem.  Some judges have interpreted the language in this paragraph to mean that only the missing owner and not a missing or defunct lender that has also disappeared, can be served by publication in a nonjudicial foreclosure.  The result is that the association can serve the owner by publication in a nonjudicial foreclosure but not a defunct lender, which then forces the association to switch to a judicial foreclosure to complete the association's foreclosure.

     Accordingly, the purpose of this Act is to clarify the parties that a homeowners association can serve through publication, after a hearing before a judge, in a nonjudicial foreclosure proceeding.

     SECTION 2.  Section 667-92, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

     "(f)  If the association is unable to serve the notice of default and intention to foreclose on the unit owner or any other party listed in subsection (e)(2) to (5) within sixty days, the association may:

     (1)  File a special proceeding in the circuit court of the circuit in which the unit is located, for permission to proceed with a nonjudicial foreclosure by serving the unit owner [only] or any other party listed in subsection (e)(2) and (5) by publication and posting;

     (2)  Proceed with a nonjudicial foreclosure of the unit; provided that if the association proceeds without the permission of the court, the association shall not be entitled to obtain a deficiency judgment against the unit owner, and the unit owner shall have one year from the date the association records the deed in the nonjudicial foreclosure to redeem the unit by paying the unit owner's delinquency to the association; or

     (3)  Take control of the unit if the unit is unoccupied, after giving notice to the unit owner at the unit owner's last known address as shown on the records of the association or as determined by the association as part of its due diligence to serve notice to the owner.  The association's authority to take control of the unit pursuant to this paragraph shall be exercised solely for the purpose of renting the unit to generate rental income to pay the unit owner's delinquency, and the association shall acquire no legal title to the unit.  In addition, the association shall credit the net rental proceeds generated from the rental of the unit to the owner's delinquency.  For purposes of this paragraph, "net rental proceeds" means the rental proceeds remaining each month after deducting:

         (A)  The unit's regular monthly assessments that come due while the association controls the unit pursuant to this subsection;

         (B)  Any rental agent commissions; and

         (C)  Expenses incurred by the association in maintaining the unit in rentable condition.

          If the unit owner pays the full amount of the unit owner's delinquency to the association, the association shall return control of the unit to the unit owner; provided that the full amount of the unit owner's delinquency shall be calculated by deducting the total net rental proceeds collected by the association, if any, from the unit owner's delinquency."

     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.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Homeowners Association; Nonjudicial Foreclosure; Publication; Alternate Remedies for Failure to Serve

 

Description:

Clarifies the parties that a homeowners association can serve through publication, after a hearing before a judge, in a nonjudicial foreclosure proceeding.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.