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SB2764
THE SENATE
S.B. NO.
2764
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:
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SECTION 1.
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The
legislature finds that the changes made by Act 192, Session Laws of Hawaii 2019
(Act 192), were designed to clarify the allocation of payments made by or on
behalf of a condominium unit owner paid in excess of any common expenses
owed.
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Specifically, Act 192 clarified
the allocation of payments to unpaid balances beyond common expense
assessments.
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The legislature also finds that Act 192 did
not clarify how payments should be applied to unpaid judgment interest and
judgment principal in situations where a court has entered a money judgment
against a condominium unit owner and in a condominium association's favor.
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The legislature further finds that
preserving condominium associations' judgment collection remedies is important.
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Accordingly, the purpose of this Act is to
clarify that all payments made by or on behalf of a unit owner to a condominium
association may be applied to unpaid judgment interest and principal owed by
the unit owner to the association.
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SECTION
2
.
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Section 514B-105, Hawaii Revised Statutes, is
amended by amending subsection (c) to read as follows:
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(c)
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Any payments made by or on behalf of a unit
owner shall first be applied to outstanding common expenses that are assessed
to all unit owners in proportion to the common interest appurtenant to their
respective units, including commercial property assessed financing assessment
expenses incurred for improvements financed pursuant to section 196-64.5.
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Only after the outstanding common expenses
have been paid in full may the payments be applied to other charges owed to the
association, including assessed charges to the unit such as ground lease rent,
utility sub-metering, storage lockers, parking stalls, boat slips, insurance
deductibles, and cable.
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After these
charges are paid, other charges, including unpaid late fees, legal fees, fines,
and interest, may be assessed in accordance with an application of payment
policy adopted by the board; provided that if a unit owner has designated that
any payment is for a specific charge that is not a common expense as described
in this subsection, the payment may be applied in accordance with the unit
owner's designation even if common expenses remain outstanding.
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Notwithstanding any other provision of this
section, any payments made by or on behalf of a unit owner may be applied to
any unpaid judgment interest, judgment principal, and all costs and reasonable
attorneys' fees incurred in attempting to obtain satisfaction of the money
judgment.
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SECTION 3.
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This Act does not affect rights and duties that matured, penalties that
were incurred, and proceedings that were begun before its effective date.
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SECTION 4.
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New statutory material is underscored.
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SECTION 5.
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This Act shall take effect upon its approval.
INTRODUCED BY:
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Report Title:
Condominiums;
Associations; Common Expense Payments; Excess Amounts; Money Judgements
Description:
Clarifies
that condominium associations may apply any payment from or on behalf of an
owner to amounts due by the owner under a money judgment in favor of the
condominium association.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.