STAND. COM. REP. NO. 1463
RE: H.B. No. 1499
Honorable Ronald D. Kouchi
President of the Senate
Twenty-Ninth State Legislature
Regular Session of 2017
State of Hawaii
Your Committees on Judiciary and Labor and Ways and Means, to which was referred H.B. No. 1499, H.D. 1, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO CONDOMINIUM ASSOCIATIONS,"
beg leave to report as follows:
The purpose and intent of this measure is to:
(1) Clarify that a condominium association does not have to rescind the notice of default and intention to foreclose or restart the foreclosure by filing a new notice of default and intent to foreclose if a unit owner defaults on a payment plan to cure a nonjudicial foreclosure agreed to by the parties;
(2) Specify that if a unit owner and an association have agreed on a payment plan to prevent a nonjudicial foreclosure from proceeding, any association fines imposed while the payment plan is in effect shall not be deemed a default under the payment plan;
(3) Clarify the obligations of a unit owner and an association while a unit owner is not otherwise in default under a payment plan;
(4) Clarify that the pay first, dispute later provisions in Hawaii's condominium law apply only to common expense assessments claimed by an association of apartment owners;
(5) Specify that a unit or apartment owner who disputes the amount of an assessment may request a written statement about the assessment from the association, including that a unit or apartment owner may demand mediation prior to paying contested charges, other than common expense assessments;
(6) Specify requirements for mediation on contested charges, except for common expense assessments;
(7) Expand the scope of the condominium education trust fund to cover voluntary binding arbitration; and
(8) Amend the conditions that mandate mediation and exceptions to mandatory mediation.
Your Committees received testimony in support of this measure from Associa Hawaii and one individual. Your Committees received testimony in opposition to this measure from the Association of Unit Owners Kipuka at Hoakalei, The Maui Lani Community Association, and twenty-six individuals. Your Committees received comments on this measure from the Real Estate Commission.
Your Committees find that it is important to have clear and effective laws related to association foreclosures against condominium owners, including which actions successfully cure a default. Your Committees further find that a condominium owner and an association agreeing to a payment plan is not sufficient to cure a default; the delinquency must be paid in full to cure a nonjudicial foreclosure on a condominium. Your Committees also find that it is important to preserve the pay first, dispute later provision in existing law, as it applies to common expense assessments, but your Committees support encouraging the use of mediation for all other penalties or fines, late fees, lien filing fees, or other charges in an assessment.
Your Committees have amended this measure by inserting an effective date of January 7, 2059, to encourage further discussion.
As affirmed by the records of votes of the members of your Committees on Judiciary and Labor and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1499, H.D. 1, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 1499, H.D. 1, S.D. 2.
Respectfully submitted on behalf of the members of the Committees on Judiciary and Labor and Ways and Means,
JILL N. TOKUDA, Chair
GILBERT S.C. KEITH-AGARAN, Chair