HB 1806

HOUSE OF REPRESENTATIVES
H.B. NO.
1806
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to condominium governance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION
1.� The legislature finds that more than
two hundred thousand Hawaii residents are condominium unit owners who directly
bear the financial consequences of governance decisions, including special
assessments, maintenance fee increases, deferred maintenance, and reserve
underfunding.� Despite this, condominium
owners are not consistently included in advisory groups, task forces, or policy
discussions convened by the real estate commission or the department of
commerce and consumer affairs.
���� Accordingly,
the purpose of this Act is to empower condominium unit owners as valued stakeholders
in condominium governance by providing them with a meaningful voice in
state-level policy development, education design, and advisory processes.
���� SECTION 2.� Section 514B-71, Hawaii Revised Statutes, is
amended to read as follows:
���� "�514B-71�
Condominium education trust fund. �(a)� The
commission shall establish a condominium education trust fund that the
commission shall use for educational purposes.�
Educational purposes shall include financing or promoting:
���� (1)� Education and
research in the field of condominium management, condominium project
registration, and real estate, for the benefit of the public and those required
to be registered under this chapter;
���� (2)� The improvement
and more efficient administration of associations;
���� (3)� Expeditious and
inexpensive procedures for resolving association disputes;
���� (4)� Support for
mediation of condominium related disputes; [[and]]
���� (5)� Support for
voluntary binding arbitration between parties in condominium related disputes,
pursuant to section 514B-162.5[[.]]; and
���� (6)� Education and resources for unit owners as
primary stakeholders in condominium governance, including programs designed to
improve owner understanding of association operations, reserve requirements,
financial obligations, and governance rights.
���� (b)� The commission
shall use all moneys in the condominium education trust fund for purposes
consistent with subsection (a).� Any law
to the contrary notwithstanding, the
commission may make a finding that a fee adjustment is appropriate and adjust
the fees paid by associations to regulate the fund balance to an appropriate
level to maintain a reasonable relation between the fees generated and
the cost of services rendered by the condominium education trust fund.� For the
purposes of finding that a fee adjustment is appropriate in order to maintain a
reasonable relation between the fees generated and the cost of services
rendered by the fund, the commission's review shall include the following:
���� (1)� Frequency and
timing of anticipated revenue to the fund;
���� (2)� Identification of
a reserve amount based on unanticipated revenue reductions and historical
expenditures;
���� (3)� Anticipated
expenses paid, including recovery payouts during a biennial budget cycle;
���� (4)� Unanticipated
natural disasters or catastrophic weather events that may increase fund
payments; and
���� (5)� Any statutory
adjustments to fund payout amounts.
The balance of the fund shall not exceed a sum
determined by the commission.� The sum
shall be determined by the commission biennially.
���� (c)� The commission shall adopt rules to ensure
that unit owners are recognized and included as stakeholders in all educational
programs, consultations, advisory committees, task forces, and policy
development activities funded in whole or in part by the condominium education
trust fund."
���� SECTION 3.� Section 514B-72, Hawaii Revised Statutes, is
amended to read as follows:
���� "�514B-72�
Condominium education trust fund; payments by associations and
developers.� (a) �Each project or
association with more than five units shall pay to the department of commerce
and consumer affairs:
���� (1)� A condominium education trust fund fee within
one year after the recordation of the purchase of the first unit or within
thirty days of the association's first meeting, and thereafter, on or before
June 30 of every odd-numbered year, as prescribed by rules adopted pursuant to
chapter 91; and
���� (2)� Beginning with the July 1, 2015, biennium
registration, an additional annual condominium education trust fund fee in an
amount equal to the product of $1.50 times the number of condominium units
included in the registered project or association to be dedicated to supporting
mediation or voluntary binding arbitration of condominium related
disputes.� The additional condominium
education trust fund fee shall total $3 per unit until the commission adopts
rules pursuant to chapter 91.� On June 30
of every odd-numbered year, any unexpended additional amounts paid into the
condominium education trust fund and initially dedicated to supporting
mediation or voluntary binding arbitration of condominium related disputes, as
required by this paragraph, shall be used for educational purposes as provided
in section 514B-71(a)(1), (2), and (3).
���� (b)� Each developer shall pay to the department of
commerce and consumer affairs the condominium education trust fund fee for each
unit in the project, as prescribed by rules adopted by the director of commerce
and consumer affairs pursuant to chapter 91.�
The project shall not be registered and no effective date for a
developer's public report shall be issued until the payment has been made.
���� (c)� Payments of any fees required under this
section shall be due on or before the registration due date and shall be
nonrefundable.� Failure to pay the
required fee by the due date shall result in a penalty assessment of ten per
cent of the amount due and the association shall not have standing to bring any
action to collect or to foreclose any lien for common expenses or other
assessments in any court of this State until the amount due, including any
penalty, is paid.� Failure of an
association to pay a fee required under this section shall not impair the
validity of any claim of the association for common expenses or other
assessments, or prevent the association from defending any action in any court
of this State.
���� (d)� The department of commerce and consumer
affairs shall allocate the fees collected under this section to the condominium
education trust fund established pursuant to section 514B-71.� The fees collected pursuant to this section
shall be administratively and fiscally managed together as one condominium
education trust fund established by section 514B-71.
���� (e)� The commission shall adopt written criteria
defining the term "stakeholder" for the purposes of condominium
governance. �The criteria shall include
unit owners as stakeholders whose interests shall be considered in commission
programs and activities funded in whole or in part by the condominium education
trust fund.
���� (f)� The commission shall ensure that condominium
unit owners are represented in any advisory committee, stakeholder group, or
task force convened for the purposes of condominium law review, policy
development, education program design, rulemaking, dispute resolution evaluation,
or any project funded in whole or in part by the condominium education trust
fund."
���� 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.
INTRODUCED BY:
_____________________________
Report Title:
Condominiums;
Unit Owners; Condominium Education Trust Fund; Stakeholders
Description:
Allows
funds from the Condominium Education Trust Fund to be used for education and
resources for condominium unit owners as primary stakeholders in condominium
governance.� Requires the Real Estate
Commission to ensure that condominium unit owners are recognized and included
as stakeholders in educational programs, consultations, advisory committees,
task forces, and police development activities.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.