RELATING TO BOARD MEMBERS.

HB1313

HOUSE OF REPRESENTATIVES

H.B. NO.

1313

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO BOARD MEMBERS
.

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

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SECTION 1.
�
The legislature finds that in Hawaii,
condominium association board of directors are not currently required to
participate in mandatory training and education classes.
�
This lack of training has been shown to have
a very serious and negative impact on condominium associations throughout
Hawaii, where members of boards of directors, including board presidents, are
often not in compliance with the governing documents of their associations or
complying with state and county law, regulations, and ordinances.
�
It is also widely reported that there is
abuse of power at condominium associations by boards, board presidents, and
other board members, and that association members who raise concerns are being
retaliated against.

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The legislature further finds that
as a result, many condominium associations are being mismanaged, with adverse
financial impacts to the associations, deferred maintenance, mismanaged
projects, building and common element concerns, and numerous mediation requests
and lawsuits being filed.

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Therefore, the purpose of this Act
is to require board members of a condominium association to:

����
(1)
�
Certify the
receipt and review of certain documents; and

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(2)
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Complete a board training
and education course approved by an accredited third party organization, to be
selected by the real estate commission.

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

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"
�514B-106
�
Board; powers and duties.
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(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.

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(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.
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Notice of a
special association meeting to fill vacancies shall include notice of the
election.
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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.

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(c)
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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.

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(d)
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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:

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(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;

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

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

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(4)
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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.

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(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.

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(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).

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(g)
�
A board member shall certify in writing, within
ninety days of election, to the board that the member:

����
(1)
�
Has received
and reviewed a copy of the association's articles of incorporation, bylaws,
rules and regulations, and this chapter; and

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(2)
�
Understands
their fiduciary duty to the association and that retaliation is prohibited
under section 514B‑191.

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(h)
�
A board member of a registered condominium
project or association shall o
btain
a board training and education course completion certificate from a course
approved by an accredited third party organization, to be selected by the
commission, within one year of
election to the board.

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(i)
�
A board member's failure to comply with the
requirements of subsections (g) and (h) shall disqualify the member from serving
on the board.
"

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SECTION 3.
�
(a)
�

All board members of a condominium association who are actively serving a
term of office on a board before July 1, 2025, shall certify in writing, by
September 29, 2026, to the board that the member:

����
(1)
�
Has received and reviewed a copy of the
association's articles of incorporation, bylaws, rules and regulations, and
chapter 514B, Hawaii Revised Statutes; and

����
(2)
�
Understands their
fiduciary duty to the association and that retaliation is prohibited under
section 514B‑191, Hawaii Revised Statutes.

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(b)
�

All board members of a registered condominium project or association who
are serving on a board before July 1, 2025, shall o
btain a board training and education course completion
certificate from a course approved by an accredited third party organization,
as selected by the real estate commission, by July 1, 2026.

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

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SECTION 5.
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This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Condominium
Associations; Boards of Directors; Members; Training and Education Courses

Description:

Requires
board
members of a condominium association to certify the receipt and review of
certain documents and complete a board training and education course approved
by an accredited third party organization, to be selected by the Real Estate
Commission.

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