HB 2239: Condominium Associations; Board of Directors; Training and Education; Condominium Education Trust Fund

A BILL FOR AN ACT

relating to condominium associations.

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

     SECTION 1.  Section 514B-71, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(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, board members, 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."

     SECTION 2.  Section 514B-106, Hawaii Revised Statutes, is amended to read as follows:

     "§514B-106  Board; powers and duties.  (a)  Except as provided in the declaration, the bylaws, subsection (b), or other provisions of this chapter, the board may act in all instances on behalf of the association.  In the performance of their duties, officers and members of the board shall owe the association a fiduciary duty and exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 414D.  Any violation by a board or its officers or members of the mandatory provisions of section 514B-161 or 514B-162 may constitute a violation of the fiduciary duty owed pursuant to this subsection; provided that a board member may avoid liability under this subsection by indicating in writing the board member's disagreement with [such board] the board's action or rescinding or withdrawing the violating conduct within forty-five days of the occurrence of the initial violation.

     (b)  The board [may] shall not act on behalf of the association to amend the declaration or bylaws (sections 514B-32(a)(11) and 514B-108(b)(7))[, to]; remove the condominium from the provisions of this chapter (section 514B-47)[,]; or [to] elect members of the board or determine the qualifications, powers and duties, or terms of office of board members (subsection (e)); provided that nothing in this subsection shall be construed to prohibit board members from voting proxies (section 514B-123) to elect members of the board; provided further that notwithstanding anything to the contrary in the declaration or bylaws, the board may only fill vacancies in its membership to serve until the next annual or duly noticed special association meeting.  Notice of a special association meeting to fill vacancies shall include notice of the election.  Any special association meeting to fill vacancies shall be held on a date that allows sufficient time for owners to declare their intention to run for election and to solicit proxies for that purpose.

     (c)  Within thirty days after the adoption of any proposed budget for the condominium, the board shall make available a copy of the budget to all the unit owners and shall notify each unit owner that the unit owner may request a copy of the budget.

     (d)  The declaration may provide for a period of developer control of the association, during which a developer, or persons designated by the developer, may appoint and remove the officers and members of the board.  Regardless of the period provided in the declaration, a period of developer control terminates no later than the earlier of:

     (1)  Sixty days after conveyance of seventy-five per cent of the common interest appurtenant to units that may be created to unit owners other than a developer or affiliate of the developer;

     (2)  Two years after the developer has ceased to offer units for sale in the ordinary course of business;

     (3)  Two years after any right to add new units was last exercised; or

     (4)  The day the developer, after giving written notice to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association.

A developer may voluntarily surrender the right to appoint and remove officers and members of the board before termination of that period, but in that event the developer may require, for the duration of the period of developer control, that specified actions of the association or board, as described in a recorded instrument executed by the developer, be approved by the developer before they become effective.

     (e)  [Not] No later than the termination of any period of developer control, the unit owners shall elect a board of at least three members; provided that projects created after May 18, 1984, with one hundred or more individual units, shall have an elected board of at least nine members unless the membership has amended the bylaws to reduce the number of directors; [and] provided further that projects with more than one hundred individual units where at least seventy per cent of the unit owners do not reside at the project may amend the bylaws to reduce the board to as few as five members by the written consent of a majority of the unit owners or the vote of a majority of a quorum at any annual meeting or special meeting called for that purpose.  The association may rely on its membership records in determining whether a unit is owner-occupied.  A decrease in the number of directors shall not deprive an incumbent director of any remaining term of office.

     (f)  At any regular or special meeting of the association, any member of the board may be removed and successors shall be elected for the remainder of the term to fill the vacancies thus created.  The removal and replacement shall be by a vote of a majority of the unit owners and, otherwise, in accordance with all applicable requirements and procedures in the bylaws for the removal and replacement of directors and, if removal and replacement is to occur at a special meeting, section 514B-121(c).

     (g)  A board member of an association shall obtain, within one year of election to the board, a board training and education course completion certificate from a course approved by an accredited third-party organization that is selected by the commission and paid for by funds in the condominium education trust fund."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2026.

Report Title:

Condominium Associations; Board of Directors; Training and Education; Condominium Education Trust Fund

Description:

Requires board members of a condominium association to complete a board training and education course approved by an accredited third party organization, to be selected by the Real Estate Commission and paid for through funds in the Condominium Education Trust Fund.

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