SB 2298: Common Interest Communities; Cooperative Housing Corporations; Proxy Forms

A BILL FOR AN ACT

RELATING TO COMMON INTEREST COMMUNITIES.

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

     SECTION 1.  Section 421I-4, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§421I-4[]]  Proxies.  (a)  A proxy shall be valid only for a specific meeting and any of that meeting's adjournments.

     (b)  A shareholder may designate any person or the board of directors as a proxy, and the proxy may be limited as indicated by the shareholder.  No proxy shall be irrevocable unless:

     (1)  The proxy is coupled with a financial interest in the dwelling unit; or

     (2)  The proxy is held pursuant to a first mortgage of record encumbering a dwelling unit or an agreement of sale affecting a dwelling unit.

     (c)  A proxy statement shall contain at least the following information:

     (1)  The name of the corporation;

     (2)  The date of the meeting to which the proxy is applicable;

     (3)  The printed name and the signature of the shareholder giving the proxy; and

     (4)  The dwelling unit or units for which the proxy is given.

     (d)  If a proxy is a standard proxy form authorized by the corporation, the proxy shall contain boxes wherein the shareholder may indicate that the proxy is given:

     (1)  For quorum purposes only;

     (2)  To the individual whose name is printed on a line next to this box;

     (3)  To the board of directors as a whole and that the vote be made on the basis of the preference of the majority of the directors present at the meeting; or

     (4)  To those directors present at the meeting and the vote to be shared with each board member receiving an equal percentage;

provided that if the proxy is returned with no box or more than one of the boxes in paragraphs (1) through (4) checked, the proxy shall be counted for quorum purposes only."

     SECTION 2.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     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  Statutory material to be repealed is bracketed and stricken.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, 2050.

Report Title:

Common Interest Communities; Cooperative Housing Corporations; Proxy Forms

Description:

Requires cooperative housing corporation proxy forms to include certain language related to the selection options for proxies.  Effective 7/1/2050.  (SD2)

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

A BILL FOR AN ACT

RELATING TO COMMON INTEREST COMMUNITIES.

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

     SECTION 1.  Section 421I-4, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§421I-4[]]  Proxies.  (a)  A proxy shall be valid only for a specific meeting and any of that meeting's adjournments.

     (b)  A shareholder may designate any person or the board of directors as a proxy, and the proxy may be limited as indicated by the shareholder.  No proxy shall be irrevocable unless:

     (1)  The proxy is coupled with a financial interest in the dwelling unit; or

     (2)  The proxy is held pursuant to a first mortgage of record encumbering a dwelling unit or an agreement of sale affecting a dwelling unit.

     (c)  A proxy statement shall contain at least the following information:

     (1)  The name of the corporation;

     (2)  The date of the meeting to which the proxy is applicable;

     (3)  The printed name and the signature of the shareholder giving the proxy; and

     (4)  The dwelling unit or units for which the proxy is given.

     (d)  If a proxy is a standard proxy form authorized by the corporation, the proxy shall contain boxes wherein the owner may indicate that the proxy is given:

     (1)  For quorum purposes only;

     (2)  To the individual whose name is printed on a line next to this box;

     (3)  To the board of directors as a whole and that the vote be made on the basis of the preference of the majority of the directors present at the meeting; or

     (4)  To those directors present at the meeting and the vote to be shared with each board member receiving an equal percentage;

provided that if the proxy is returned with no box or more than one of the boxes in paragraphs (1) through (4) checked, the proxy shall be counted for quorum purposes only."

     SECTION 2.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     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, 2050.

Report Title:

Common Interest Communities; Cooperative Housing Corporations; Proxy Forms

Description:

Requires cooperative housing corporation proxy forms to include certain language related to the selection options for proxies.  Effective 7/1/2050.  (SD1)

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

A BILL FOR AN ACT

Relating to common INTEREST communities.

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

     SECTION 1.  Section 421J-4, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  If a proxy is a standard proxy form authorized by the association, the proxy shall contain the following statement, including boxes wherein the owner may indicate that the proxy is given:

    [(1)  For quorum purposes only;

     (2)  To the individual whose name is printed on a line next to this box;

     (3)  To the board of directors as a whole and that the vote be made on the basis of the preference of the majority of the directors present at the meeting; or

     (4)  To those directors present at the meeting and the vote to be shared with each board member receiving an equal percentage;

Provided that if]

  "[  ]   For quorum purposes only.  In order for the Association to legally conduct the Annual Meeting, it requires a Quorum percentage of Ownership.  If this box is selected, this proxy counts towards the quorum number requirement.  Quorum Purposes Only has no voting actions.

   [  ]   To the individual whose name is printed on a line next to this box:_________________________________________.

          If you are unable to attend the Annual Meeting or think you may not be able to attend the Annual Meeting, you can select this box and name an individual to represent you as a proxy.  If, on the day of the Annual Meeting, you do attend and check in at the Annual Meeting, this proxy shall become void and you will be directly participating in the voting ballot process.

   [  ]   To the Board as a whole.  This selection means the proxy is presented to the entire Board, not just to individual Directors.  The Board is voting together as one.  If you are happy with the composition of the total Board (Board as a whole), selecting this box will put your vote toward re-electing the current members of the Board.

   [  ]   To those Directors present at the Meeting with the vote to be shared with each Director receiving an equal percentage.  This selection means the vote is to be made on the basis of the preference of the Directors present at the Meeting.  Only Directors who are physically present at the Meeting count toward the vote.  For example, if you have a 7 member Board, but only 5 attend, the majority is 3 votes (out of 5 present), not 4 (out of 7 total).  Your ownership is then divided amongst the Board Members present at the Meeting.  These Board Members will then submit their voting ballot based upon their vote and not anyone else's vote."

If the proxy is returned with no box checked, or if more than one of the foregoing boxes [in paragraphs (1) through (4)] is checked, the proxy shall be counted for quorum purposes only."

     SECTION 2.  Section 421I-4, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  A proxy [statement] form shall contain [at least the following information:], at minimum:

     (1)  The name of the corporation;

     (2)  The date of the meeting to which the proxy is applicable;

     (3)  The printed name and the signature of the shareholder giving the proxy; [and]

     (4)  The dwelling unit or units for which the proxy is given[.]; and

     (5)  The following statement, including boxes wherein the shareholder may indicate that the proxy is given:

  "[  ]   For quorum purposes only.  In order for the Corporation to legally conduct the Meeting, it requires a Quorum percentage of Ownership.  If this box is selected, this proxy counts towards the quorum number requirement.  Quorum Purposes Only has no voting actions.

   [  ]   To the individual whose name is printed on a line next to this box:_________________________________________.

          If you are unable to attend the Meeting or think you may not be able to attend the Meeting, you can select this box and name an individual to represent you as a proxy.  If, on the day of the Meeting, you do attend and check in at the Meeting, this proxy shall become void and you will be directly participating in the voting ballot process.

   [  ]   To the Board as a whole.  This selection means the proxy is presented to the entire Board, not just to individual Directors.  The Board is voting together as one.  If you are happy with the composition of the total Board (Board as a whole), selecting this box will put your vote toward re-electing the current members of the Board.

   [  ]   To those Directors present at the Meeting with the vote to be shared with each Director receiving an equal percentage.  This selection means the vote is to be made on the basis of the preference of the Directors present at the Meeting.  Only Directors who are physically present at the Meeting count toward the vote.  For example, if you have a 7 member Board, but only 5 attend, the majority is 3 votes (out of 5 present), not 4 (out of 7 total).  Your ownership is then divided amongst the Board Members present at the Meeting.  These Board Members will then submit their voting ballot based upon their vote and not anyone else's vote."

If the proxy is returned with no box checked, or if more than one of the foregoing boxes is checked, the proxy shall be counted for quorum purposes only."

     SECTION 3.  Section 514B-123, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

     "(e)  If a proxy is a standard proxy form authorized by the association, the proxy shall comply with the following additional requirements:

     (1)  The proxy shall contain the following statement, including boxes wherein the owner may indicate that the proxy is given:

         [(A)  For quorum purposes only;

          (B)  To the individual whose name is printed on a line next to this box;

          (C)  To the board as a whole and that the vote is to be made on the basis of the preference of the majority of the directors present at the meeting; or

          (D)  To those directors present at the meeting with the vote to be shared with each director receiving an equal percentage;]

  "[  ]   For quorum purposes only.  In order for the Association to legally conduct the Annual Meeting, it requires a Quorum percentage of Ownership.  If this box is selected, this proxy counts towards the quorum number requirement.  Quorum Purposes Only has no voting actions.

   [  ]   To the individual whose name is printed on a line next to this box:_________________________________________.

          If you are unable to attend the Annual Meeting or think you may not be able to attend the Annual Meeting, you can select this box and name an individual to represent you as a proxy.  If, on the day of the Annual Meeting, you do attend and check in at the Annual Meeting, this proxy shall become void and you will be directly participating in the voting ballot process.

   [  ]   To the Board as a whole.  This selection means the proxy is presented to the entire Board, not just to individual Directors.  The Board is voting together as one.  If you are happy with the composition of the total Board (Board as a whole), selecting this box will put your vote toward re-electing the current members of the Board.

   [  ]   To those Directors present at the Meeting with the vote to be shared with each Director receiving an equal percentage.  This selection means the vote is to be made on the basis of the preference of the Directors present at the Meeting.  Only Directors who are physically present at the meeting count toward the vote.  For example, if you have a 7 member Board, but only 5 attend, the majority is 3 votes (out of 5 present), not 4 (out of 7 total).  Your ownership is then divided amongst the Board Members present at the meeting.  These Board Members will then submit their voting ballot based upon their vote and not anyone else's vote.";

          provided that if the proxy is returned with no box checked, or if more than one of the foregoing boxes [in subparagraphs (A) through (D)] is checked, the proxy shall be counted for quorum purposes only; and

     (2)  The proxy form shall also contain a box wherein the owner may indicate that the owner wishes to obtain a copy of the annual audit report required by section 514B‑150."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Common Interest Communities; Planned Community Associations; Cooperative Housing Corporations; Condominium Associations; Proxy Forms; Explanations

Description:

Requires common interest community proxy forms to include certain language related to the selection options for proxies.

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

STAND. COM. REP. NO. 3014

Honolulu, Hawaii

RE:     S.B. No. 2298

        S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Judiciary, to which was referred S.B. No. 2298, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO COMMON INTEREST COMMUNITIES,"

begs leave to report as follows:

     The purpose and intent of this measure is to require cooperative housing corporation proxy forms to include certain language related to the selection options for proxies.

     Your Committee received testimony in support of this measure from the Hawaiʻi Council of Community Associations.

     Your Committee received comments on this measure from the Community Associations Institute Legislative Action Committee.

     Your Committee finds that confusing or misleading proxy forms in common interest communities may result in owners unintentionally or incorrectly surrendering their voting power.  Lack of clarity in proxy designation contributes to unnecessary disputes, challenges to election outcomes, and delayed meetings due to quorum issues.  Requiring proxy forms to include clear, standardized options ensures owners are able to make informed choices and that proxies accurately reflect owner intent.  This measure therefore improves transparency and legitimacy in the operation of common interest communities.

     Your Committee has amended this measure by specifying that the shareholder, rather than the owner, may make indications in a standard proxy form.

     As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2298, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2298, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

STAND. COM. REP. NO. 2430

Honolulu, Hawaii

RE:     S.B. No. 2298

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2298 entitled:

"A BILL FOR AN ACT RELATING TO COMMON INTEREST COMMUNITIES,"

begs leave to report as follows:

     The purpose and intent of this measure is to require common interest community proxy forms to include certain language related to the selection options for proxies.

     Your Committee received testimony in support of this measure from eight individuals.

     Your Committee received testimony in opposition to this measure from the Makaha Valley Towers Condominium Association; Associa; Law Offices of Mark K. McKellar, LLLC; Hawaii State Association of Parliamentarians; and fifteen individuals.

     Your Committee received comments on this measure from the Hawaii Legislative Action Committee of the Community Associations Institute and two individuals.

     Your Committee finds that proxy forms for common interest community elections can be confusing for owners, leading to disputes, challenges to election results, and issues achieving quorum.  This measure would establish requirements for a proxy form to help owners understand the process and participate more effectively.

     Your Committee notes concerns raised in testimony that this measure, in its current form, contains inaccuracies with regard to some of its statements concerning proxies.  Further, the standard form proxy currently mandated in statute appears to have worked well for a number of years.  Amendments to this measure are therefore necessary to address these concerns.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting language that would have required a specific standard proxy form for a condominium association or planned community association election;

     (2)  Replacing language that would have required a specific standard proxy form for a cooperative housing corporation election with language consistent with the existing provisions related to planned community associations;

     (3)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2298, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2298, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,