HB117 • 2026

RELATING TO CONDOMINIUMS.

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: MATAYOSHI, CHUN
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The exact percentage of the tax-assessed value that must be kept in the replacement reserve fund is not specified in the bill text.

Rules for Condominium Replacement Reserve Funds

This bill sets rules about how condominium associations must manage their replacement reserve funds to ensure they have enough money set aside for repairs.

What This Bill Does

Requires condominium boards and officers to maintain a minimum balance in the replacement reserves fund or face legal consequences.
Establishes that if the board does not keep at least fifty percent of the estimated needed amount in the fund, it can be seen as breaking their duty to protect the association's interests.
Allows board members to avoid penalties by writing down their disagreement with a decision or fixing the problem within 45 days.
Sets rules for when new associations must start collecting money for replacement reserves.

Who It Names or Affects

Condominium associations and boards
Unit owners in condominium projects

Terms To Know

fiduciary duty: A legal obligation to act in the best interest of another party, such as a board member acting for their association.
replacement reserves fund: Money set aside by condominium associations to cover future major repairs and replacements.

Limits and Unknowns

The bill does not specify the exact percentage of the tax-assessed value that must be kept in the replacement reserve fund.
It is unclear how this law will affect existing associations with different rules for their funds.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-19 H
The committee(s) on CPC recommend(s) that the measure be deferred.
2025-02-14 H
Bill scheduled to be heard by CPC on Wednesday, 02-19-25 2:00PM in House conference room 329 VIA VIDEOCONFERENCE.
2025-01-21 H
Referred to CPC, referral sheet 1
2025-01-16 H
Introduced and Pass First Reading.
2025-01-14 H
Prefiled.

Official Summary Text

RELATING TO CONDOMINIUMS.
Condominium Associations; Condominium Boards; Fiduciary Duty; Replacement Reserves Funds; Minimum Balance
Provides that a condominium board's or its officer's or member's failure to maintain the minimum required balance for a condominium's replacement reserves fund may constitute a violation of the fiduciary duty owed. Establishes a minimum balance for a condominium association's replacement reserves fund, with an exception for sufficient assessments. Effective 9/1/2025.

Current Bill Text

Read the full stored bill text

HB117

HOUSE OF REPRESENTATIVES

H.B. NO.

117

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to condominiums
.

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

����
SECTION
1
.
�
Section 514B-106, Hawaii Revised Statutes, is
amended by amending subsection (a) to read as follows:

����
"
(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
minimum replacement reserves fund balance required in section
514B-148(b) or 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 action or
rescinding or withdrawing the violating conduct within forty-five days of the
occurrence of the initial violation.
"

����
SECTION
2
.
�
Section 514B-148, Hawaii Revised Statutes, is
amended by amending subsection (b) to read as follows:

����
"
(b)
�
The
association shall assess the unit owners to either fund a minimum of fifty per
cent of the estimated replacement reserves assessments

or fund one hundred per cent of the estimated
replacement reserves assessments

when
using a cash flow plan; provided that [
a
]
:

����
(1)
�
The balance
of the total replacement reserves fund shall be no less than
per cent of the tax-assessed value of the project,
unless the amount assessed by the association is sufficient to add at least
per cent of the tax-assessed value of the project to
the total replacement reserves fund in a calendar year; and

����
(2)
�
A
new
association need not collect estimated replacement reserves assessments

until the fiscal year that begins after the
association's first annual meeting.

For each fiscal
year, the association shall collect the amount assessed to fund the estimated
replacement reserves assessments

for
that fiscal year, as determined by the association's plan.
"

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

����
SECTION 4.
�
This Act shall take effect on September 1,
2025.

INTRODUCED BY:

_____________________________

Report Title:

Condominium
Associations; Condominium Boards; Fiduciary Duty; Replacement Reserves Funds;
Minimum Balance

Description:

Provides
that a condominium board's or its officer's or member's failure to maintain the
minimum required balance for a condominium's replacement reserves fund may
constitute a violation of the fiduciary duty owed.
�
Establishes a minimum balance for a
condominium association's replacement reserves fund, with an exception for
sufficient assessments.
�
Effective
9/1/2025.

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