SB 2301: Condominiums; Association Records; Resale Transactions

A BILL FOR AN ACT

relating to condominiums.

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

     SECTION 1.  The legislature finds that the Hawaii supreme court recently issued a summary disposition order interpreting existing law relating to condominiums to require managing agents to make available to unit owners sufficiently detailed financial information and other records relating to the private resale of units, such as a project information form (Form RR105C) and a statement of account (SOA).  Caven v. Certified Mgmt, Inc. dba Associa Hawaii, 156 Hawaii 401, 575 P.3d 491 (2025).  The order further provides that the statutorily mandated disclosures are not limited to pre-existing documents, and if they are made available to the unit owner electronically or for download through an internet site, they are to be provided at no cost to the unit owner or the owner's authorized agent.  Id.  Because forms used for private sales transactions are for the use and benefit of the parties to the sale and not for the benefit of the association, the legislature believes that these forms are not "association documents" as interpreted by the Hawaii supreme court, and that it is unfair to pass on the cost of providing or preparing non-association documents for a private sales transaction to all unit owners in an association, thus increasing association costs for condominium unit owners.

     Accordingly, the purpose of this Act is to clarify that an association's or managing agent's obligation to keep records sufficiently detailed to enable compliance with requests for information and disclosures related to resale of units at no cost is limited to providing pre-existing documentation and does not include the completion or provision of documentation or forms used to facilitate private sales transactions that are not already in existence at the time of request.

     SECTION 2.  Section 514B-152, Hawaii Revised Statutes, is amended to read as follows:

     "§514B-152  Association records; generally.  The association shall keep financial and other records sufficiently detailed to enable the association to comply with requests for information and disclosures related to resale of units[.]; provided that no association or managing agent shall be required to provide a document that is not already in existence, or to complete any form, for the purpose of facilitating any specific resale transaction.

     Except as otherwise provided by law, all required financial and other records shall be made available pursuant to section 514B‑154.5 for examination by any unit owner and the owner's authorized agents.  Association records shall be stored on the island on which the association's project is located; provided that if original records, including but not limited to invoices, are required to be sent off-island, copies of the records shall be maintained on the island on which the association's project is located."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

Condominiums; Association Records; Resale Transactions

Description:

Exempts condominium associations and managing agents from providing documentation not already in existence or preparing forms to facilitate a private sales transaction.

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