SB1201

SECTION 1. Section 514B-52, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) An application for registration of a project shall:

(1) Be accompanied by nonrefundable fees as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91; and

(2) Contain the documents and information concerning the project and the condominium property regime as required by sections 514B‑54, 514B‑83, [~~and~~] 514B‑84, 514B-103, 514B-153, and 514B-154, as applicable, and as otherwise may be specified by the commission."

SECTION 2. Section 514B-72, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each project or association with more than five units shall pay to the department of commerce and consumer affairs:

(1) A condominium education trust fund fee within one year after the recordation of the purchase of the first unit or within thirty days of the association's first meeting, and thereafter, on or before June 30 of every [~~odd-numbered~~] year, as prescribed by rules adopted pursuant to chapter 91; [~~and~~]

(2) Beginning with the July 1, 2015, biennium registration, an additional annual condominium education trust fund fee in an amount equal to the product of $1.50 times the number of condominium units included in the registered project or association to be dedicated to supporting mediation or voluntary binding arbitration of condominium related disputes. The additional condominium education trust fund fee shall total $3 per unit until the commission adopts rules pursuant to chapter 91[.]; and

(3) Beginning with the July 1, 2023, annual registration, an additional annual condominium education trust fund fee in an amount equal to the product of $1.50 times the number of condominium units included in the registered project or association to be dedicated to supporting the annual registration with attached documents of the association.

On June 30 of every [~~odd-numbered~~] year, any unexpended additional amounts paid into the condominium education trust fund and initially dedicated to supporting mediation or voluntary binding arbitration of condominium related disputes, as required by [~~this~~] paragraph[,] (2), or the annual registration with attached documents of the association, as required by paragraph (3), shall be used for educational purposes as provided in section 514B-71(a)(1), (2), and (3)."

SECTION 3. Section 514B-103, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each project or association having more than five units shall:

(1) Secure and maintain a fidelity bond in an amount for the coverage and terms as required by section 514B‑143(a)(3). An association shall act promptly and diligently to recover from the fidelity bond required by this section. An association that is unable to obtain a fidelity bond may seek approval for an exemption, a deductible, or a bond alternative from the commission. Current evidence of a fidelity bond includes a certification statement from an insurance company registered with the department of commerce and consumer affairs certifying that the bond is in effect and meets the requirement of this section and the rules adopted by the commission;

(2) Register with the commission through approval of a completed registration application, payment of fees, and submission of any other additional information set forth by the commission. The annual registration shall be [~~for a biennial period with termination~~] due on June 30 of each [~~odd-numbered~~] year. The commission shall prescribe a deadline date prior to the termination date for the submission of a completed reregistration application, payment of fees, and any other additional information set forth by the commission. Any project or association that has not met the submission requirements by the deadline date shall be considered a new applicant for registration and be subject to initial registration requirements. Any new project or association shall register within thirty days of the association's first meeting. If the association has not held its first meeting and it is at least one year after the recordation of the purchase of the first unit in the project, the developer or developer's affiliate or the managing agent shall register on behalf of the association and shall comply with this section, except for the fidelity bond requirement for associations required by section [[]514B-143(a)(3)[]]. The public information required to be submitted on any completed application form shall include but not be limited to [~~evidence~~]:

(A) Evidence of and information on fidelity bond coverage[~~, names~~];

(B) Names and positions of the officers of the association[~~, the~~] with contact information;

(D) The name and contact information for an emergency contact for the association that is different from the managing agent;

(E) The street and the postal address of the condominium[~~, and the name and current mailing address of a designated officer of the association where the officer can be contacted directly~~];

(F) An accurate copy of:

(i) The articles of incorporation, if any, declaration, bylaws, and amendments thereto;

(ii) The regulations, resolutions, and house rules, if any;

(iii) Master lease, if any;

(iv) A sample original conveyance document;

(v) All public reports and any amendments thereto;

(vi) All contracts, leases, or other agreements entered into by the board to which the association is a party or under which the association or unit owners have obligations or liabilities;

(vii) Minutes of all meetings of the association, pursuant to section 514B-122, and its board, pursuant to section 514B-126 for the immediately preceding twelve months, ;

(viii) All policies of insurance of the association, including current policies and policies of the association for the immediately preceding ten years;

(ix) Any reserve study;

(x) A list of the association's planned capital expenditures, if any, from the date of registration through June 30 of the following year;

(xi) The association's most recent audited financial statement;

(xii) The association's most recently adopted budget with any monthly or recurring association fees and any applicable current or approved special assessments specifically outlined; and

(xiii) All reports issued within the preceding ten years on the structural status of each property owned, operated, or governed by the association; and

(G) A description of the location where all building permits for work in common elements, which shall be posted during construction;

(3) Pay a nonrefundable application fee and, upon approval, an initial registration fee, a reregistration fee upon reregistration and the condominium education trust fund fee, as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91;

(4) Register or reregister and pay the required fees by the due date. Failure to register or reregister or pay the required fees by the due date shall result in the assessment of a penalty equal to the amount of the registration or reregistration fee; and

(5) Report promptly in writing to the commission any changes to the information contained on the registration or reregistration application or any other documents required by the commission. Failure to do so may result in termination of registration and subject the project or the association to initial registration requirements."

SECTION 4. Section 514B-153, Hawaii Revised Statutes, is amended to read as follows:

"§514B-153 Association records; records to be maintained. (a) An accurate copy of [~~the declaration, bylaws, house rules, if any, master lease, if any, a sample original conveyance document, all public reports and any amendments thereto,~~] all documents listed in section 514B-103(a)(2)(F) shall be kept at the managing agent's office[.], a convenient location at the project, or a location designated by the board; provided that the minutes shall be for all the meetings of the association and its board and not limited to the meetings in the immediately preceding twelve months.

(b) The managing agent or board shall keep detailed, accurate records in chronological order, of the receipts and expenditures affecting the common elements, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred. The managing agent or board shall also keep monthly statements indicating the total current delinquent dollar amount of any unpaid assessments for common expenses.

(c) Subject to section 514B‑152, all records and the vouchers authorizing the payments and statements shall be kept and maintained at the address of the project, or elsewhere within the State as determined by the board.

(d) The developer or affiliate of the developer, board, and managing agent shall ensure that there is a written contract for managing the operation of the property, expressing the agreements of all parties, including but not limited to financial and accounting obligations, services provided, and any compensation arrangements, including any subsequent amendments. Copies of the executed contract and any amendments shall be provided to all parties to the contract.

(e) The commission shall maintain a searchable database containing the registration information and attachments of each association registered with the commission pursuant to section 514B-52. The database shall be made publicly accessible on the department of commerce and consumer affairs' website.

[~~(e)~~] (f) The managing agent, resident manager, or board shall keep an accurate and current list of members of the association and their current addresses, and the names and addresses of the vendees under an agreement of sale, if any. The list shall be maintained at a place designated by the board, and a copy shall be available, at cost, to any member of the association as provided in the declaration or bylaws or rules and regulations or, in any case, to any member who furnishes to the managing agent or resident manager or the board a [~~duly executed and acknowledged affidavit~~] written certification stating that the list:

(1) Will be used by the owner personally and only for the purpose of soliciting votes or proxies or providing information to other owners with respect to association matters; and

(2) Shall not be used by the owner or furnished to anyone else for any other purpose.

A board may prohibit commercial solicitations.

Where the condominium project or any units within the project are subject to a time share plan under chapter 514E, the association shall only be required to maintain in its records the name and address of the time share association as the representative agent for the individual time share owners unless the association receives a request by a time share owner to maintain in its records the name and address of the time share owner.

[~~(f)~~] (g) The managing agent or resident manager shall not use or distribute any membership list, including for commercial or political purposes, without the prior written consent of the board.

[~~(g)~~] (h) All membership lists are the property of the association and any membership lists contained in the managing agent's or resident manager's records are subject to subsections [~~(e)~~] (f) and [~~(f),~~] (g), and this subsection. A managing agent, resident manager, or board may not use the information contained in the lists to create any separate list for the purpose of evading this section.

[~~(h)~~] (i) Subsections [~~(f)~~] (g) and [~~(g)~~] (h) shall not apply to any time share plan regulated under chapter 514E."

SECTION 5. Section 514B-154, Hawaii Revised Statutes, is amended to read as follows:

"§514B-154 Association records; availability; disposal; prohibitions. (a) [~~The association's most current financial statement shall be provided to any interested unit owner at no cost or on~~ ~~twenty-four-hour loan, at a convenient location designated by the board. The meeting minutes of the board of directors, once approved, for the current and prior year shall either:~~] Any unit owner of an association shall have the right to inspect, examine, and make copies of the records required to be maintained in section 514B-153, in person or by authorized agent, at any reasonable time, at the association's principal office or with the board or managing agent. To exercise this right, a unit owner shall submit a written request to the board or managing agent, stating the records sought to be inspected, examined, or copied. Failure of a board or managing agent to make available all records requested within ten business days of receipt of the unit owner's written request shall be deemed a denial. Any unit owner who prevails in an enforcement action to compel inspection, examination, or copying the records required to be maintained in section 514B-153 shall be entitled to recover reasonable attorneys' fees and costs from the association. These documents shall either:

(1) Be available for examination by apartment owners at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board of directors; [or]

(2) Be transmitted to any apartment owner making a request [~~for the minutes~~], by the board of directors, the managing agent, or the association's representative[~~, within fifteen days of receipt of the request~~]; provided that the [~~minutes~~] documents shall be transmitted by mail, electronic mail transmission, or facsimile, by the means indicated by the owner, if the owner indicated a preference at the time of the request; and provided further that the owner shall pay a reasonable fee for administrative costs associated with handling the request[.]; or

(3) Be available on the website for the association's registration with the department of commerce and consumer affairs.

Costs incurred by apartment owners pursuant to this subsection shall be subject to section 514B‑105(d).

(b) Financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association and delinquencies of ninety days or more shall be available for examination by unit owners at convenient hours at a place designated by the board; provided that:

(1) The board may require owners to furnish to the association a [~~duly executed and acknowledged affidavit~~] written certification stating that the information is requested in good faith [~~for the protection of the interests of the association, its members, or both;~~] and will not be used by the unit owner for any commercial purpose or any purpose that does not relate to the association; and

(2) Owners shall pay for reasonable administrative costs in excess of eight hours per year.

Copies of these items shall be provided to any owner upon the owner's request; provided that the owner pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request.

(c) After any association meeting, and not earlier, unit owners shall be permitted to examine proxies, tally sheets, ballots, owners' check-in lists, and the certificate of election; provided that:

(1) Owners shall make a request to examine the documents within thirty days after the association meeting;

(2) The board may require owners to furnish to the association a [~~duly executed and acknowledged affidavit~~] written certification stating that the information is requested in good faith for the protection of the interest of the association or its members or both; and

(3) Owners shall pay for administrative costs in excess of eight hours per year.

The documents may be destroyed ninety days after the association meeting; provided that in the event of a contested election, the documents shall be retained until the contested election is resolved. Copies of tally sheets, owners' check-in lists, and the certificates of election from the most recent association meeting shall be provided to any owner upon the owner's request; provided that the owner pays a reasonable fee for duplicating, postage, stationery, and other administrative costs associated with handling the request.

(d) The managing agent shall provide copies of association records maintained pursuant to this section and sections 514B-103, 514B‑152, and 514B‑153 to owners, prospective purchasers and their prospective agents during normal business hours, upon payment to the managing agent of a reasonable charge to defray any administrative or duplicating costs. If the project is not managed by a managing agent, the foregoing requirements shall be undertaken by a person or entity, if any, employed by the association, to whom this function is delegated.

(e) [~~Prior to the organization of the association, any~~] Any unit owner shall be entitled to inspect as well as receive a copy of the management contract from the entity that manages the operation of the property.

(f) Owners may file a written request with the board to examine other documents. The board shall give written authorization or written refusal with an explanation of the refusal within [~~thirty~~] ten calendar days of receipt of the request.

(g) An association may comply with this part by making information available to unit owners, at the option of each unit owner and at no cost to the unit owner for downloading the information, through an internet site.

(h) A managing agent retained by one or more associations may dispose of the records of any association which are more than [~~five~~] ten years old, except for tax records, which [~~shall~~] may be [~~kept for~~] disposed of after seven years, without liability if the managing agent first provides the board of the association affected with written notice of the managing agent's intent to dispose of the records if not retrieved by the board within sixty days, which notice shall include an itemized list of the records proposed to be disposed.

(i) No person shall knowingly make any false certificate, entry, or memorandum upon any of the books or records of any managing agent or association. No person shall knowingly alter, destroy, mutilate, or conceal any books or records of a managing agent or association. Any violation of this subsection shall constitute forgery in the third degree under section 708-853.

(j) Any fee charged to a member to obtain copies of association records under this section shall be reasonable; provided that a reasonable fee shall include administrative and duplicating costs and shall not exceed $1 per page, or portion thereof, except the fee for pages exceeding eight and one-half inches by fourteen inches may exceed $1 per page."

SECTION 6. Section 514B-154.5, Hawaii Revised Statutes, is amended to read as follows:

"§514B-154.5 Association documents to be provided. (a) Notwithstanding any other provision in the declaration, bylaws, or house rules, if any, the following documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-103, 514B-152, 514B-153, or 514B-154, shall be made available to any unit owner and the owner's authorized agents by the managing agent, resident manager, board through a board member, or the association's representative:

(1) All financial and other records sufficiently detailed in order to comply with requests for information and disclosures related to the resale of units;

(2) [~~An accurate copy of the declaration, bylaws, house rules, if any, master lease, if any, a sample original conveyance document, and all public reports and any amendments thereto;~~] All records required to be maintained pursuant to section 514B-153(a);

(3) Detailed, accurate records in chronological order of the receipts and expenditures affecting the common elements, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred and monthly statements indicating the total current delinquent dollar amount of any unpaid assessments for common expenses;

(4) All records and the vouchers authorizing the payments and statements kept and maintained at the address of the project, or elsewhere within the State as determined by the board, subject to section 514B-152;

(5) All signed and executed agreements for managing the operation of the property, expressing the agreement of all parties, including but not limited to financial and accounting obligations, services provided, and any compensation arrangements, including any subsequent amendments;

(6) An accurate and current list of members of the condominium association and the members' current addresses and the names and addresses of the vendees under an agreement of sale, if any. A copy of the list shall be available, at cost, to any unit owner or owner's authorized agent who furnishes to the managing agent, resident manager, or the board a [~~duly executed and acknowledged affidavit~~] written certification stating that the list:

(A) Shall be used by the unit owner or owner's authorized agent personally and only for the purpose of soliciting votes or proxies or for providing information to other unit owners with respect to association matters; and

(B) Shall not be used by the unit owner or owner's authorized agent or furnished to anyone else for any other purpose;

(7) The association's most current financial statement, at no cost or on twenty-four-hour loan, at a convenient location designated by the board;

[~~(8)~~ ~~Meeting minutes of the association, pursuant to section 514B-122;~~

~~(9)~~ ~~Meeting minutes of the board, pursuant to section 514B-126, which shall be:~~

~~(A)~~ ~~Available for examination by unit owners or owners' authorized agents at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board; or~~

~~(B)~~ ~~Transmitted to any unit owner or owner's authorized agent making a request for the minutes within fifteen days of receipt of the request by the owner or owner's authorized agent; provided that:~~

~~(i)~~ The minutes shall be transmitted by mail, electronic mail transmission, or facsimile, by the means indicated by the owner or owner's authorized agent, if the owner or owner's authorized agent indicated a preference at the time of the request; and

~~(ii)~~ ~~The owner or owner's authorized agent shall pay a reasonable fee for administrative costs associated with handling the request, subject to section 514B-105(d);~~

~~(10)~~] (8) Financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association, and any documents regarding delinquencies of ninety days or more shall be available for examination by unit owners or owners' authorized agents at convenient hours at a place designated by the board; provided that:

(A) The board may require unit owners or owners' authorized agents to furnish to the association a [~~duly executed and acknowledged affidavit~~] written certification stating that the information is requested in good faith for the protection of the interests of the association, its members, or both; and

(B) Unit owners or owners' authorized agents shall pay for administrative costs in excess of eight hours per year;

[~~(11)~~] (9) Proxies, tally sheets, ballots, unit owners' check-in lists, and the certificate of election subject to section 514B-154(c);

[~~(12)~~] (10) Copies of an association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B‑152, 514B-153, or 514B-154;

[~~(13)~~] (11) A copy of the management contract from the entity that manages the operation of the property before the organization of an association;

[~~(14)~~] (12) Other documents requested by a unit owner or owner's authorized agent in writing; provided that the board shall give written authorization or written refusal with an explanation of the refusal within [~~thirty~~] ten calendar days of receipt of a request for documents pursuant to this paragraph; and

[~~(15)~~] (13) A copy of any contract, written job description, and compensation between the association and any person or entity retained by the association to manage the operation of the property on-site, including but not limited to the general manager, operations manager, resident manager, or site manager; provided that personal information may be redacted from the contract copy, including but not limited to the manager's date of birth, age, signature, social security number, residence address, telephone number, non-business electronic mail address, driver's license number, Hawaii identification card number, bank account number, credit or debit card number, access code or password that would permit access to the manager's financial accounts, or any other information that may be withheld under state or federal law.

(b) Subject to section 514B-105(d), copies of the items in subsection (a) shall be provided to any unit owner or owner's authorized agent upon the owner's or owner's authorized agent's request; provided that the owner or owner's authorized agent pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request.

(c) Notwithstanding any provision in the declaration, bylaws, or house rules providing for another period of time, all documents, records, and information listed under subsection (a), whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be provided no later than [~~thirty~~] ten calendar days after receipt of a unit owner's or owner's authorized agent's written request, unless a lesser time is provided pursuant to this section or section 514B-152, 514B-153, or 514B‑154, and except as provided in subsection (a)(14).

(d) Any documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, may be made available electronically to the unit owner or owner's authorized agent if the owner or owner's authorized agent requests such in writing.

(e) An association may comply with this section or section 514B-152, 514B-153, or 514B-154 by making the required documents, records, and information available to unit owners or owners' authorized agents for download through an internet site, including the department of commerce and consumer affairs' website for registered condominiums, at the option of each unit owner or owner's authorized agent and at no cost to the unit owner or owner's authorized agent.

(f) Any fee charged to a unit owner or owner's authorized agent to obtain copies of the association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be reasonable; provided that a reasonable fee shall include administrative and duplicating costs and shall not exceed $1 per page, or portion thereof, except that the fee for pages exceeding eight and one-half inches by fourteen inches may exceed $1 per page.

(g) This section shall apply to all condominiums organized under this chapter or any predecessor thereto.

(h) If the board fails to provide records properly requested under this section, the owner may seek appropriate relief and shall be entitled to an award of reasonable attorneys' fees and costs if the unit owner prevails.

[~~(h)~~] (i) Nothing in this section shall be construed to create any new requirements for the release of documents, records, or information."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1201
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII