THE SENATE

S.B. NO.

1203

THIRTY-SECOND LEGISLATURE, 2023

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PROFESSIONAL AND VOCATIONAL LICENSING.

 

 

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

 


SECTION 1. The legislature finds that due to the effects of climate change and the establishment of more stringent structural facility maintenance requirements, it is more important than ever that homeowners' associations, planned community associations, cooperative housing corporations, and condominium unit owners' associations are properly managed to protect the life and safety of residents.

The legislature further finds that an estimated three hundred sixty thousand people in the State, or about one in four persons, live in a property managed by these types of associations. These individuals live in projects governed by volunteer boards of directors who often have limited expertise in financing, property management, or engineering. Therefore, it is crucial that the professional managers hired to manage the day-to-day operations of the associations possess the specialized knowledge and expertise required to properly service these entities.

One way to ensure that these professional managers are qualified is by establishing licensing requirements for the profession. The establishment of licensing requirements will increase accountability, improve the safety of residents, guests, and property, and will help to standardize the long-term repair and maintenance obligations among homeowners' associations and planned community associations, cooperative housing corporations, and condominium unit owners' associations. Empowering a licensing board to monitor this profession will also help to ensure these entities and individual unit owners better understand the long-term financial obligations required for these types of ownership structures.

Accordingly, the purpose of this Act is to establish licensing and regulation requirements for managers of homeowners' associations, planned community associations, cooperative housing corporations, and condominium unit owners' associations.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 25 to be appropriately designated and to read as follows:

"Chapter

MANAGERS of homeowners associations, planned community associations, cooperative housing corporations, and unit owners' associations

-1 Definitions. As used in this chapter:

"Association" includes homeowners' associations and planned community associations under chapter 421J, cooperative housing corporations under chapter 421I, and condominium unit owners' associations under chapter 514B.

"Association manager" means any person, regardless of that person's title, who is hired or contracted by an association to oversee the daily operations of the association, including managing the association's budget, collecting dues, managing delinquencies, bookkeeping, maintaining common areas, performing site inspections, complying with applicable laws, hiring association employees, updating and maintaining insurance policies, enforcing governing documents, performing dispute resolution, and managing vendors.

"Board" means the association manager licensing board.

"Department" means the department of commerce and consumer affairs.

-2 License required. (a) Beginning July 1, 2025, it shall be unlawful for any person to be employed or contracted by an association as an association manager without having first obtained a license as provided in this chapter.

(b) Any person who violates this section shall be subject to a fine of not more than $ for each separate offense. Each day of each violation shall constitute a separate offense.

-3 Exemptions. This chapter shall not apply to any employee or contractor of an association manager who works under the supervision or direction of a person who is licensed under this chapter.

-4 Association manager licensing board; established; organization; powers. (a) There is established within the department for administrative purposes the association manager licensing board.

(b) The board shall consist of members, including association managers having at least five years of experience providing services to associations preceding their appointment and private citizens who are not affiliated with the association industry.

(c) In addition to any other powers and duties authorized by law, the board may:

(1) Establish licensure requirements for association managers;

(2) Grant, deny, or renew licenses to association managers;

(3) Adopt, amend, or repeal rules, pursuant to chapter 91, not inconsistent with the law, as may be necessary to administer, coordinate, and enforce the licensure of association managers pursuant to this chapter;

(4) Take disciplinary action against an entity for violation of this chapter or any rules adopted pursuant to this chapter;

(5) Develop and adopt rules relating to the provision of services by association managers;

(6) Adopt a code of ethics to address permissible and prohibited activities of licensees; and

(7) Promote the standardization of the long-term repair and maintenance obligations among homeowners' associations and planned community associations under chapter 421J, cooperative housing corporations under chapter 421I, and condominium unit owners' associations under chapter 514B, to help ensure that these entities and individual unit owners better understand the long-term financial obligations required with respect to these types of ownership structures.

-5 License fees. The department may collect a license fee in an amount determined by the department to be reasonably necessary to reimburse the department for the costs incurred in establishing and administering the association manager licensure program pursuant to this chapter and conducting any periodic inspections.

-6 Association managers recovery fund; established. (a) The board may establish and maintain an association managers recovery fund from which any person injured by an act, representation, transaction, or conduct of a duly licensed association manager, which is in violation of this chapter or the rules adopted pursuant to this chapter, may recover, by order of the circuit court or district court of the judicial circuit where the violation occurred, an amount of not more than $ per contract, regardless of the number of persons injured under the contract, for damages sustained by the act, representation, transaction, or conduct. Recovery from the fund shall be limited to the actual damages suffered by the claimant, including court costs and fees as set by law, and reasonable attorney fees as determined by the court; provided that recovery from the fund shall not be awarded to persons injured by an act, representation, transaction, or conduct of an association manager whose license was suspended, revoked, forfeited, terminated, or in an inactive status at the time the claimant entered into the contract with the association manager.

(b) When any person applies for an association manager license, the person shall pay, in addition to any original license fee collected pursuant to section -6, a fee of $            for deposit into the association managers recovery fund as provided in rules adopted by the department pursuant to chapter 91. If the board does not issue the license, these fees shall be returned to the applicant."

SECTION 3. This Act shall take effect on July 1, 2023.

 

INTRODUCED BY:

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Report Title:

DCCA; Homeowners' Associations; Planned Community Associations; Cooperative Housing Corporations; Unit Owners' Associations; Managers; Licensing; Recovery Fund

 

Description:

Creates licensure and regulation requirements for managers of homeowners' associations, planned community associations, cooperative housing corporations, and unit owners' associations in the State. Establishes an Association Manager Licensing Board within the Department of Commerce and Consumer Affairs.

 

 

 

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