RELATING TO COMMON INTEREST COMMUNITIES.

SB2295

THE SENATE

S.B. NO.

2295

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to Common interest communities
.

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

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SECTION 1.
�
Chapter 421I,
Hawaii Revised Statutes, is amended by adding a new section to be appropriately
designated and to read as follows:

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"
�421I-
�
Managing
agents; educational opportunities.
�
If
a managing agent is sent any information on educational opportunities or
seminars relating to corporations from a verified Hawaii-based or national
condominium or common interest provider source, the managing agent shall, upon
receipt, distribute the information electronically to the board of directors and
post on any electronic communication platform of the corporation at no cost to
the corporation the date of the educational opportunity or seminar.
�
The managing agent shall again distribute to
the board and management staff, and post on an any electronic communication
platform, information on the educational opportunity or seminar at least three
weeks before the date of the educational opportunity or seminar.
�
The requirements of this section shall apply
to all managing agents, including unregistered managing agents.
"

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SECTION 2.
�

Chapter 421J, Hawaii Revised Statutes, is amended by adding a new
section to be appropriately designated and to read as follows:

����
"
�421J-
�
Managing
agents; educational opportunities.
�
If
a managing agent is sent any information on educational opportunities or
seminars relating to associations from a verified Hawaii-based or national
condominium or common interest provider source, the managing agent shall, upon
receipt, distribute the information electronically to the board of directors and
post on any electronic communication platform of the association at no cost to
the association the date of the educational opportunity or seminar.
�
The managing agent shall again distribute to
the board and management staff and post on an electronic communication platform
information on the educational opportunity or seminar at least three weeks
before the date of the educational opportunity or seminar.
�
The requirements of this section shall apply
to all managing agents, including unregistered managing agents.
"

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SECTION
3
.
�
Section 514B-132, Hawaii Revised Statutes, is
amended to read as follows:

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"
�514B-132
�
Managing agents.
�

(a)
�
Every managing agent shall:

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(1)
�
Be a:

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(A)
�
Licensed real estate broker in compliance with
chapter 467 and the rules of the commission.
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With respect to any requirement for a corporate managing agent in any
declaration or bylaws recorded before July 1, 2006, any managing agent
organized as a limited liability company shall be deemed to be organized as a
corporation for the purposes of this paragraph, unless the declaration or
bylaws are expressly amended after July 1, 2006 to require that the managing
agent be organized as a corporation and not as a limited liability company; or

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(B)
�
Corporation authorized to do business under
article 8 of chapter 412;

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(
2)
�
Register with the commission prior to
conducting managing agent activity through approval of a completed registration
application, payment of fees, and submission of any other additional
information set forth by the commission.
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The registration shall be for a biennial period with termination on
December 31 of an even-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 managing agent who has not met the
submission requirements by the deadline date shall be considered a new
applicant for registration and subject to initial registration
requirements.
�
The information required
to be submitted with any application shall include the name, business address,
phone number, and names of associations managed;

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(
3)
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Obtain and keep current a fidelity bond in an
amount equal to $500 multiplied by the aggregate number of units of the
association managed by the managing agent; provided that the amount of the
fidelity bond shall not be less than $20,000 nor greater than $500,000.
�
Upon request by the commission, the managing
agent shall provide evidence of a current fidelity bond or a certification
statement from an insurance company authorized by the insurance division of the
department of commerce and consumer affairs certifying that the fidelity bond
is in effect and meets the requirements of this section and the rules adopted
by the commission.
�
The managing agent
shall permit only employees covered by the fidelity bond to handle or have
custody or control of any association funds, except any principals of the
managing agent that cannot be covered by the fidelity bond.
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The fidelity bond shall protect the managing
agent against the loss of any association's moneys, securities, or other
properties caused by the fraudulent or dishonest acts of employees of the
managing agent.
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Failure to obtain or
maintain a fidelity bond in compliance with this chapter and the rules adopted
pursuant thereto, including failure to provide evidence of the fidelity bond
coverage in a timely manner to the commission, shall result in nonregistration
or the automatic termination of the registration, unless an approved exemption
or a bond alternative is presently maintained.
�

A managing agent who is unable to obtain a fidelity bond may seek an exemption
from the fidelity bond requirement from the commission;

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(
4)
�
Act promptly and diligently to recover from
the fidelity bond, if the fraud or dishonesty of the managing agent's employees
causes a loss to an association, and apply the fidelity bond proceeds, if any,
to reduce the association's loss.
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If
more than one association suffers a loss, the managing agent shall divide the
proceeds among the associations in proportion to each association's loss.
�
An association may request a court order
requiring the managing agent to act promptly and diligently to recover from the
fidelity bond.
�
If an association cannot
recover its loss from the fidelity bond proceeds of the managing agent, the
association may recover by court order from the real estate recovery fund
established under section 467-16[
,
]
;
provided that:

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(A)
�
The loss is caused by the fraud,
misrepresentation, or deceit of the managing agent or its employees;

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(B)
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The managing agent is a licensed real estate
broker; and

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(C)
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The association fulfills the requirements of
sections 467-16 and 467-18 and any applicable rules of the commission;

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(5)
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Pay a nonrefundable application fee and, upon
approval, an initial registration fee, and subsequently pay a reregistration
fee, as prescribed by rules adopted by the director of commerce and consumer
affairs pursuant to chapter 91.
�
A
compliance resolution fee shall also be paid pursuant to section 26‑9(o)
and the rules adopted pursuant thereto; and

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(
6)
�
Report immediately in writing to the
commission any changes to the information contained on the registration
application or any other documents provided for registration.
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Failure to do so may result in termination of
registration and subject the managing agent to initial registration
requirements.

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(b)
�
The commission may deny any registration or
reregistration application or terminate a registration without hearing if the
fidelity bond and supporting documents fail to meet the requirements of this
chapter and the rules adopted pursuant thereto.

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(c)
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Every managing agent shall be considered a
fiduciary with respect to any property managed by that managing agent.

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(d)
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The registration requirements of this section shall not apply to active
real estate brokers in compliance with and licensed under chapter 467.

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(e)
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If a managing agent receives a request from the commission to distribute
any commission-generated information, printed material, or documents to the
association, its board, or unit owners, the managing agent shall make the
distribution at the cost of the association within a reasonable period of time
after receiving the request.
�
The
requirements of this subsection
shall
apply to all managing agents,
including unregistered managing agents.

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(f)
�

If a managing agent is sent any educational opportunities or seminars relating
to condominiums from a verified Hawaii-based or national condominium or common
interest provider source, the managing agent shall, upon receipt, distribute
the information electronically to the board and post on any electronic
communication platform of the association at no cost to the association the
date of the educational opportunity or seminar.
�

The managing agent shall again distribute to the board and management
staff, and post on any electronic communication platform, information on the
educational opportunity or seminar at least three weeks before the date of the
educational opportunity or seminar.
�
The
requirements of this subsection shall apply to all managing agents, including
unregistered managing agents.
"

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SECTION 4.
�

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

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SECTION 5.
�

This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Cooperative
Housing Corporations; Planned Community Associations; Condominiums; Managing
Agents; Educational Opportunities; Seminars; Notice

Description:

Requires
all managing agents of cooperative housing corporations, planned community
associations, and condominiums to distribute information received regarding
educational opportunities or seminars electronically to the board of directors
of the cooperative housing corporation, planned community association, or
condominium.

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