RELATING TO CONDOMINIUMS.

SB2037

THE SENATE

S.B. NO.

2037

THIRTY-THIRD LEGISLATURE, 2026

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-157, Hawaii Revised Statutes, is
amended to read as follows:

����
"
�514B-157
�
Attorneys' fees, delinquent assessments, and
expenses of enforcement.
�
(a)
�
[
All
]

Except as provided in subsection (c), all
costs and expenses, including
reasonable attorneys' fees, incurred by or on behalf of the association for:

����
(1)
�
Collecting any delinquent assessments
,
including commercial property assessed financing assessments imposed pursuant
to section 196-64.5,
against any owner's
unit;

����
(2)
�
Foreclosing any lien thereon; or

����
(3)
�
Enforcing any provision of the declaration,
bylaws, house rules, and this chapter, or the rules of the real estate
commission;

against [
an
]
a unit
owner,
occupant, tenant, employee of [
an
]
a unit
owner, or any other
person who may in any manner use the property, shall be promptly paid on demand
to the association by the person or persons; provided that if the claims upon
which the association takes any action are not substantiated, all costs and
expenses, including reasonable attorneys' fees, incurred by any applicable
person or persons as a result of the action of the association, shall be
promptly paid on demand to the person or persons by the association.

����
(b)
�
If any claim by [
an
]
a unit
owner
is substantiated in any action against an association, any of its officers or
directors, or its board to enforce any provision of the declaration, bylaws,
house rules, or this chapter, then all reasonable and necessary expenses,
costs, and attorneys' fees incurred by [
an
]
a unit
owner shall be
awarded to [
such
]
the unit
owner; provided that no [
such award
]

expenses, costs, or fees
shall be [
made
]
awarded
in any
derivative action unless:

����
(1)
�
The
unit
owner first shall have demanded
and allowed reasonable time for the board to pursue such enforcement; or

����
(2)
�
The
unit
owner demonstrates to the
satisfaction of the court that a demand for enforcement made to the board would
have been fruitless.

����
If
any claim by [
an
]
a unit
owner is not substantiated in any court
action against an association, any of its officers or directors, or its board
to enforce any provision of the declaration, bylaws, house rules, or this
chapter, then all reasonable and necessary expenses, costs, and attorneys' fees
incurred by an association shall be awarded to the association, unless before
filing the action in court the
unit
owner has first submitted the claim
to mediation, or to arbitration under subpart D, and made a good faith effort
to resolve the dispute under any of those procedures.

����
(c)
�
No attorneys' fees shall be charged
by an association against any unit owner or tenant with respect to a fine unless
the fine is deemed collectable.
�
A fine
shall be deemed collectable if:

����
(1)
�
The
time to initiate an appeal has expired and an appeal has not been initiated; or

����
(2)
�
The
fine has been upheld following a timely appeal.

����
(d)
�
Attorneys' fees charged or awarded under this
section shall not exceed twenty-five per cent of the amount of the underlying
claim.
"

����
SECTION

2
.
�
Section
514B-163, Hawaii Revised Statutes, is amended by amending subsection (d) to
read as follows:

����
"(d)
�
In any trial de novo demanded under this
section, if the party demanding a trial de novo does not [
prevail at trial,
]

improve its position on the arbitration award by thirty per cent or more,

the party demanding the trial de novo shall be charged with all reasonable
costs, expenses, and attorneys' fees of the trial.
�
When there is more than one party on one or
both sides of an action, or more than one issue in dispute, the court shall
allocate its award of costs, expenses, and attorneys' fees among the prevailing
parties and tax such fees against those nonprevailing parties who demanded a
trial de novo in accordance with the principles of equity.
"

����
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.

INTRODUCED
BY:

_____________________________

Report Title:

Condominiums;
Arbitration; Fines; Attorneys' Fees; Trial de Novo

Description:

Prohibits
condominium association from charging unit owner attorneys' fees on fines
unless deemed collectable.
�
Limits
attorneys' fees awarded and charged under section 514B-157, Hawaii Revised
Statutes, to 25% of underlying claim.
�
Allows
court to assess charges against party requesting trial de novo if requesting
party fails to better its position by 30% or more.

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