Bill Text: HI SB306 | 2019 | Regular Session | Introduced

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Bill Title: Relating To Condominiums.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-01-22 - Referred to CPH, JDC. [SB306 Detail]

Download: Hawaii-2019-SB306-Introduced.html

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THE SENATE	S.B. NO.	306
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to condominiums.

 

 

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

 

     SECTION 1.  Chapter 514B, Part VI, Subpart D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§514B‑     Referral of disputes to the commission.  Pursuant to this section and to 467-4, the real estate commission shall:

     (1)  Adopt, amend, or repeal rules pursuant to chapter 91 as it may deem proper to effectuate this section and carry out its purpose, which shall have the force and effect of law;

     (2)  Enforce this section and rules adopted pursuant thereto;

     (3)  Shall receive and investigate any complaints regarding disputes between an association and a unit owner or any complaints referred to mandatory mediation, mandatory arbitration, or voluntary binding arbitration, pursuant to this subpart;

     (4)  Shall establish procedures for receiving and processing complaints, conducting investigations, and reporting the commission's findings; provided that the commission may not levy fees for the submission or investigation of complaints;

     (5)  May make inquiries and obtain information as the commission thinks fit in conducting an investigation; and

     (6)  Shall maintain secrecy in respect to all matters and the identities of the complainants or witnesses except so far as disclosures may be necessary to enable the commission to carry out the ombudsman's duties and to support the ombudsman's recommendations."

     SECTION 2.  Section 467-4, Hawaii Revised Statutes, is amended to read as follows:

     "§467-4  Powers and duties of commission.  In addition to any other powers and duties authorized by law, the real estate commission shall:

     (1)  Grant licenses, registrations, and certificates pursuant to this chapter;

     (2)  Adopt, amend, or repeal rules as it may deem proper to effectuate this chapter and carry out its purpose, which is the protection of the general public in its real estate transactions.  All rules shall be approved by the governor and the director of commerce and consumer affairs, and when adopted pursuant to chapter 91 shall have the force and effect of law.  The rules may forbid acts or practices deemed by the commission to be detrimental to the accomplishment of the purpose of this chapter, and the rules may require real estate brokers and salespersons to complete educational courses or to make reports to the commission containing items of information as will better enable the commission to enforce this chapter and the rules, or as will better enable the commission from time to time to amend the rules to more fully effect the purpose of this chapter, and, further, the rules may require real estate brokers and salespersons to furnish reports to their clients containing matters of information as the commission deems necessary to promote the purpose of this chapter.  This enumeration of specific matters that may properly be made the subject of rules shall not be construed to limit the commission's broad general power to make all rules necessary to fully effectuate the purpose of this chapter;

     (3)  Enforce this chapter and rules adopted pursuant thereto;

     (4)  Suspend, fine, terminate, or revoke any license, registration, or certificate for any cause prescribed by this chapter, or for any violation of the rules, and may also require additional education or reexamination, and refuse to grant any license, registration, or certificate for any cause that would be a ground for suspension, fine, termination, or revocation of a license, registration, or certificate;

     (5)  Report to the governor and the legislature relevant information that shall include but not be limited to a summary of the programs and financial information about the trust funds, including balances and budgets, through the director of commerce and consumer affairs annually, before the convening of each regular session, and at other times and in other manners as the governor or the legislature may require concerning its activities;

     (6)  Publish and distribute pamphlets and circulars, produce seminars and workshops, hold meetings in all counties, and require other education regarding any information as is proper to further the accomplishment of the purpose of this chapter;

     (7)  Enter into contract or contracts with qualified persons to assist the commission in effectuating the purpose of this chapter; [and]

     (8)  Establish standing committees to assist in effectuating this chapter and carry out its purpose, which shall meet not less often than ten times annually, and shall from time to time meet in each of the counties[.]; and

     (9)  Perform all duties as required under 514B-   ."

     SECTION 3.  Section 514B-146, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

     "(f)  A unit owner who pays an association the full amount of the common expenses claimed by the association may file in small claims court or require the association to mediate to resolve any disputes concerning the amount or validity of the association's common expense claim.  If the unit owner and the association are unable to resolve the dispute through mediation, either party may file for arbitration under section 514B‑162; provided that a unit owner may only file for arbitration if all amounts claimed by the association as common expenses are paid in full on or before the date of filing.  If the unit owner fails to keep all association common expense assessments current during the arbitration, the association may ask the [arbitrator] commission to temporarily suspend the arbitration proceedings.  If the unit owner pays all association common expense assessments within thirty days of the date of suspension, the unit owner may ask the [arbitrator] commission to recommence the arbitration proceedings.  If the unit owner fails to pay all association common expense assessments by the end of the thirty-day period, the association may ask the [arbitrator] commission to dismiss the arbitration proceedings.  The unit owner shall be entitled to a refund of any amounts paid as common expenses to the association that are not owed."

     SECTION 4.  Section 514B-161, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (d) to read:

     "(d)  A unit owner or an association may apply to the circuit court in the judicial circuit where the condominium is located for an order compelling mediation only when:

     (1)  Mediation of the dispute is mandatory pursuant to subsection (a);

     (2)  A written request for mediation has been delivered to and received by the other party; and

     (3)  The parties have not agreed to [a mediator and a] mediate before the commission or obtained a mediation date within forty-five days after a party receives a written request for mediation."

     2.  By amending subsections (f), (g), and (h) to read:

     "(f)  Each party to a mediation shall bear the attorneys' fees, costs, and other expenses of preparing for and participating in mediation incurred by the party, unless otherwise specified in:

     (1)  A written agreement providing otherwise that is signed by the parties;

     (2)  An order of a court in connection with the final disposition of a claim that was submitted to mediation;

     (3)  An award of [an arbitrator] the commission in connection with the final disposition of a claim that was submitted to mediation; or

     (4)  An order of the circuit court in connection with compelled mediation in accordance with subsection (e).

     (g)  Any individual mediation supported with funds from the condominium education trust fund pursuant to section 514B-71:

    [(1)  Shall include a fee of $375 to be paid by each party to the mediator;

     (2)] (1)  Shall receive no more from the fund than is appropriate under the circumstances, and in no event more than $3,000 total;

    [(3)] (2)  May include issues and parties in addition to those identified in subsection (a); provided that a unit owner or a developer and board are parties to the mediation at all times and the unit owner or developer and the board mutually consent in writing to the addition of the issues and parties; and

    [(4)] (3)  May include an evaluation by the mediator of any claims presented during the mediation.

     (h)  A court [or an arbitrator] with jurisdiction or the commission may consider a timely request to stay any action or proceeding concerning a dispute that would be subject to mediation pursuant to subsection (a) in the absence of the action or proceeding, and refer the matter to mediation; provided that:

     (1)  The court or [arbitrator] commission determines that the request is made in good faith and a stay would not be prejudicial to any party; and

     (2)  No stay shall exceed a period of ninety days."

     SECTION 5.  Section 514B-162, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  At the request of any party, any dispute concerning or involving one or more unit owners and an association, its board, managing agent, or one or more other unit owners relating to the interpretation, application, or enforcement of this chapter or the association's declaration, bylaws, or house rules adopted in accordance with its bylaws shall be submitted to arbitration.  The arbitration shall be conducted, unless otherwise agreed by the parties, in accordance with the rules adopted by the commission and of chapter 658A; provided that the rules of the [arbitration service conducting the arbitration] commission shall be used [until the commission adopts its rules]; provided further that where any arbitration rule conflicts with chapter 658A, chapter 658A shall prevail; and provided further that notwithstanding any rule to the contrary, the [arbitrator] commission shall conduct the proceedings in a manner which affords substantial justice to all parties.  The [arbitrator] commission shall be bound by rules of substantive law and shall not be bound by rules of evidence, whether or not set out by statute, except for provisions relating to privileged communications.  The [arbitrator] commission shall permit discovery as provided for in the Hawaii rules of civil procedure; provided that the [arbitrator] commission may restrict the scope of such discovery for good cause to avoid excessive delay and costs to the parties or the [arbitrator] commission may refer any matter involving discovery to the circuit court for disposition in accordance with the Hawaii rules of civil procedure then in effect."

     2.  By amending subsections (e) and (f) to read:

     "(e)  Notwithstanding any provision in this chapter to the contrary, the declaration, or the bylaws, the award of any costs, expenses, and legal fees by the [arbitrator] commission shall be in the sole discretion of the [arbitrator] commission and the determination of costs, expenses, and legal fees shall be binding upon all parties.

     (f)  The award of the [arbitrator] commission shall be in writing and acknowledged or proved in like manner as a deed for the conveyance of real estate, and shall be served by the [arbitrator] commission on each of the parties to the arbitration, personally or by registered or certified mail.  At any time within one year after the award is made and served, any party to the arbitration may apply to the circuit court of the judicial circuit in which the condominium is located for an order confirming the award.  The court shall grant the order confirming the award pursuant to section 658A-22, unless the award is vacated, modified, or corrected, as provided in sections 658A-20, 658A-23, and 658A‑24, or a trial de novo is demanded under subsection (h), or the award is successfully appealed under subsection (h).  The record shall be filed with the motion to confirm award, and notice of the motion shall be served upon each other party or their respective attorneys in the manner required for service of notice of a motion."

     SECTION 6.  Section 514B-162.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Any voluntary binding arbitration entered into pursuant to this section and supported with funds from the condominium education trust fund:

    [(1)  Shall include a fee of $175 to be paid by each party to the arbitrator;

     (2)] (1)  Shall receive no more from the fund than is appropriate under the circumstances, and in no event more than $6,000 total; and

    [(3)] (2)  May include issues and parties in addition to those identified in subsection (a); provided that a unit owner or a developer and board are parties to the arbitration at all times and the unit owner or developer and the board mutually consent in writing to the addition of the issues and parties."

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Condominium Disputes; Real Estate Commission; Mediation; Arbitration; Associations; Unit Owners

 

Description:

Requires the real estate commission to receive any complaints regarding disputes between a condominium association and a unit owner or any complaints referred to mandatory mediation, mandatory arbitration, or voluntary binding arbitration.

 

 

 

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