Condominium by-law amendments

Changes the percentage of common interest necessary to amend
association by-laws from 65% to 51%.

HOUSE OF REPRESENTATIVES                H.B. NO.74         
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 514A-82, Hawaii Revised Statutes, is
 2 amended by amending subsection (b) to read as follows:
 3      "(b)  In addition to the requirements of subsection (a), the
 4 bylaws shall provide for:
 5      (1)  The method of removal from office of directors; that at
 6           any regular or special meeting of the apartment owners,
 7           any one or more members of the board of directors may
 8           be removed by the apartment owners and successors shall
 9           then and there be elected for the remainder of the term
10           to fill the vacancies thus created.  The removal and
11           replacement shall be in accordance with all applicable
12           requirements and procedures in the bylaws for the
13           removal and replacement of directors, including, but
14           not limited to, any provisions relating to cumulative
15           voting.  If removal and replacement is to occur at a
16           special association meeting, the call for the meeting
17           shall be by the president or by a petition to the
18           secretary or managing agent signed by not less than
19           twenty-five per cent of the apartment owners as shown

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 1           in the association's record of ownership; and provided
 2           further that if the secretary or managing agent shall
 3           fail to send out the notices for the special meeting
 4           within fourteen days of receipt of the petition, then
 5           the petitioners shall have the authority to set the
 6           time, date, and place for the special meeting and to
 7           send out the notices for the special meeting in
 8           accordance with the requirements of the bylaws.  Except
 9           as otherwise provided herein, the meeting for the
10           removal and replacement from office of directors shall
11           be scheduled, noticed, and conducted in accordance with
12           the bylaws of the association.
13      (2)  [The] Except as provided in subsection (a), the bylaws
14           may be amended at any time by the vote or written
15           consent of [sixty-five] fifty-one per cent of all
16           apartment owners; provided that each one of the
17           particulars set forth in this section shall be embodied
18           in the bylaws always; and provided further that any
19           proposed bylaws with the rationale for the proposal may
20           be submitted by the board of directors or by a
21           volunteer apartment owners' committee.  If submitted by
22           that committee, it shall be accompanied by a petition
23           signed by not less than twenty-five per cent of the

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                                     H.B. NO.           

 1           apartment owners as shown in the association's record
 2           of ownership.  The proposed bylaws, rationale, and
 3           ballots for voting on any proposed bylaw shall be
 4           mailed by the board of directors to the owners at the
 5           expense of the association for vote or written consent
 6           without change within thirty days of the receipt of the
 7           petition by the board of directors.  The vote or
 8           written consent required to adopt the proposed bylaw
 9           shall not be less than [sixty-five] fifty-one per cent
10           of all apartment owners; provided that the vote or
11           written consent must be obtained within one hundred
12           twenty days after mailing.  In the event that the bylaw
13           is duly adopted, then the board shall cause the bylaw
14           amendment to be recorded in the bureau of conveyances
15           or filed in the land court, as the case may be.  The
16           volunteer apartment owners' committee shall be
17           precluded from submitting a petition for a proposed
18           bylaw that is substantially similar to that which has
19           been previously mailed to the owners within one year
20           after the original petition was submitted to the board.
21           This subsection shall not preclude any apartment owner
22           or voluntary apartment owners' committee from proposing
23           any bylaw amendment at any annual association meeting.

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                                     H.B. NO.           

 1      (3)  Notices of association meetings, whether annual or
 2           special, shall be sent to each member of the
 3           association of apartment owners at least fourteen days
 4           prior to the meeting, and shall contain at least:  the
 5           date, time, and place of the meeting, the items on the
 6           agenda for the meeting, and a standard proxy form
 7           authorized by the association, if any.
 8      (4)  No resident manager or managing agent shall solicit,
 9           for use by the manager or managing agent, any proxies
10           from any apartment owner of the association of owners
11           that employs the resident manager or managing agent,
12           nor shall the resident manager or managing agent cast
13           any proxy vote at any association meeting except for
14           the purpose of establishing a quorum.  No member of a
15           board of directors who uses association funds to
16           solicit proxies shall cast any of these proxy votes for
17           the election or reelection of board members at any
18           association meeting unless the proxy form specifically
19           authorizes the board member to vote for the election or
20           reelection of board directors and the board first posts
21           notice of its intent to solicit proxies in prominent
22           locations within the project at least thirty days prior
23           to its solicitation of proxies; provided that if the

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                                     H.B. NO.           

 1           board receives within seven days of the posted notice a
 2           request by any owner for use of association funds to
 3           solicit proxies accompanied by a statement, the board
 4           shall mail to all owners either:
 5           (A)  A proxy form containing the names of all owners
 6                who have requested the use of association funds
 7                for soliciting proxies accompanied by their
 8                statements; or
 9           (B)  A proxy form containing no names, but accompanied
10                by a list of names of all owners who have
11                requested the use of association funds for
12                soliciting proxies and their statements.
13           The statement shall not exceed one hundred words,
14           indicating the owner's qualifications to serve on the
15           board and reasons for wanting to receive proxies.
16      (5)  A director who has a conflict of interest on any issue
17           before the board shall disclose the nature of the
18           conflict of interest prior to a vote on that issue at
19           the board meeting, and the minutes of the meeting shall
20           record the fact that a disclosure was made.
21      (6)  The apartment owners shall have the irrevocable right,
22           to be exercised by the board of directors, to have
23           access to each apartment from time to time during

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                                     H.B. NO.           

 1           reasonable hours as may be necessary for the operation
 2           of the property or for making emergency repairs therein
 3           necessary to prevent damage to the common elements or
 4           to another apartment or apartments.
 5      (7)  An owner shall not act as an officer of an association
 6           and an employee of the managing agent employed by the
 7           association.
 8      (8)  An association's employees shall not engage in selling
 9           or renting apartments in the condominium in which they
10           are employed except association-owned units, unless
11           such activity is approved by an affirmative vote of
12           sixty-five per cent of the membership.
13      (9)  The board of directors shall meet at least once a year.
14           Whenever practicable, notice of all board meetings
15           shall be posted by the resident manager or a member of
16           the board in prominent locations within the project
17           seventy-two hours prior to the meeting or
18           simultaneously with notice to the board of directors.
19     (10)  Directors shall not expend association funds for their
20           travel, directors' fees, and per diem, unless owners
21           are informed and a majority approve of these expenses.
22     (11)  Associations at their own expense shall provide all
23           board members with a current copy of the association's

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                                     H.B. NO.           

 1           declaration, bylaws, house rules, and, annually, a copy
 2           of this chapter with amendments.
 3     (12)  The directors may expend association funds, which shall
 4           not be deemed to be compensation to the directors, to
 5           educate and train themselves in subject areas directly
 6           related to their duties and responsibilities as
 7           directors; provided that the approved annual operating
 8           budget include these expenses as separate line items.
 9           These expenses may include registration fees, books,
10           videos, tapes, other educational materials, and economy
11           travel expenses.  Except for economy travel expenses
12           within the State, all other travel expenses incurred
13           under this subsection shall be subject to the
14           requirements of subsection 514A-82(b)(10).
15 The provisions of this subsection shall be deemed incorporated
16 into the bylaws of all condominium projects existing as of
17 January 1, 1988, and all condominium projects created after that
18 date."
19      SECTION 2.  Section 514A-82.15, Hawaii Revised Statutes, is
20 amended by amending subsection (c) to read as follows:
21      "(c)  Within thirty days of a decision by the board or
22 receipt of a petition to initiate a bylaws amendment, the board
23 of directors shall mail a ballot with the proposed bylaws

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                                     H.B. NO.           

 1 amendment to all of the apartment owners of record.  [For
 2 purposes of this section only and notwithstanding section 514A-
 3 82(b)(2), the] The bylaws may be [initially] amended by a vote or
 4 written consent of the majority (at least fifty-one per cent) of
 5 the apartment owners; [and thereafter by sixty-five per cent of
 6 all apartment owners;] provided that each of the requirements set
 7 forth in this section shall be embodied in the bylaws."
 8      SECTION 3.  Statutory material to be repealed is bracketed.
 9 New statutory material is underscored.
10      SECTION 4.  This Act shall take effect on January 1, 2000.
12                         INTRODUCED BY:___________________________