TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII
A BILL FOR AN ACT
relating to planned community associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 421J, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . ADMINISTRATION
§421J-A General powers and duties of commission. (a) The commission may:
(1) Adopt, amend, and repeal rules pursuant to chapter 91;
(2) Assess fees;
(3) Conduct investigations, issue cease and desist orders, and bring an action in any court of competent jurisdiction to enjoin persons, consistent with and in furtherance of the objectives of this chapter;
(4) Prescribe forms and procedures for submitting information to the commission; and
(5) Prescribe the form and content of any documents required to be submitted to the commission by this chapter.
(b) If it appears that any person has engaged, is engaging, or is about to engage in any act or practice in violation of this chapter or any of the commission's related rules or orders, the commission, without prior administrative proceedings, may maintain an action in the appropriate court to enjoin that act or practice or for other appropriate relief. The commission shall not be required to post a bond or to prove that no adequate remedy at law exists in order to maintain the action.
(c) The commission may exercise its powers in any action involving the powers or responsibilities of a developer under this chapter.
(d) The commission may accept grants-in-aid from any governmental source and may contract with agencies charged with similar functions in this or other jurisdictions, in furtherance of the objectives of this chapter.
(e) The commission may cooperate with agencies performing similar functions in this and other jurisdictions to develop uniform filing procedures and forms, uniform disclosure standards, and uniform administrative practices, and may develop information that may be useful in the discharge of the commission's duties.
(f) The commission, by rule, may require bonding at appropriate levels over time, escrow of portions of sales proceeds, or other safeguards to assure completion of all improvements that a developer is obligated to complete, or has represented that it will complete.
§421J-B Investigatory powers. If the commission has reason to believe that any person is violating or has violated this chapter, or the rules of the commission adopted pursuant thereto, the commission may conduct an investigation of the matter and examine the books, accounts, contracts, records, and files of the association, the board of directors, the managing agent, the real estate broker, the real estate salesperson, the purchaser, or the developer. For the purposes of this examination, the developer and the real estate broker shall keep and maintain records of all sales transactions and of the funds received by the developer and the real estate broker pursuant thereto, and shall make the records accessible to the commission upon reasonable notice and demand.
§421J-C Cease and desist orders. In addition to its authority under section 421J-D, whenever the commission has reason to believe that any person is violating or has violated this chapter, or the rules of the commission adopted pursuant thereto, it shall issue and serve upon the person a complaint stating its charges in that respect and containing a notice of a hearing at a stated place and upon a day at least thirty days after the service of the complaint. The person served has the right to appear at the place and time specified and show cause why an order should not be entered by the commission requiring the person to cease and desist from the violation of the law or the rules of the commission charged in the complaint. If, upon the hearing, the commission is of the opinion that this chapter or the rules of the commission have been or are being violated, it shall make a report in writing stating its findings as to the facts and shall issue and cause to be served on the person an order requiring the person to cease and desist from the violations. The person, within thirty days after service upon the person of the report or order, may obtain a review thereof in the appropriate circuit court.
§421J-D Power to enjoin. Whenever the commission believes from satisfactory evidence that any person has violated this chapter or the rules of the commission adopted pursuant to this chapter, it may conduct an investigation on the matter and bring an action in the name of the people of the State in any court of competent jurisdiction against the person to enjoin the person from continuing the violation or engaging therein or doing any act or acts in furtherance thereof.
§421J-E Penalties. (a) Any person who violates or fails to comply with this chapter is guilty of a misdemeanor and shall be punished by a fine not exceeding $10,000 or by imprisonment for a term not exceeding one year, or both. Any person who violates or fails, omits, or neglects to obey, observe, or comply with any rule, order, decision, demand, or requirement of the commission under this chapter shall be punished by a fine not exceeding $10,000.
(b) Any person who violates any provision of this chapter or the rules of the commission adopted pursuant thereto shall also be subject to a civil penalty not exceeding $10,000 for any violation. Each violation shall constitute a separate offense."
SECTION 2. Chapter 421J, Hawaii Revised Statutes, is amended by designating sections 421J-1 to 421J-16 as part I, entitled "General Provisions".
SECTION 3. Section 421J-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Commission" means the real estate commission established pursuant to section 467-3."
SECTION 4. 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; [
(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
(9) Enforce chapter 421J and rules adopted pursuant to that chapter."
SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 6. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
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.
Planned Community Associations; Real Estate Commission
Gives the Real Estate Commission enforcement powers over planned community associations.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.