RELATING TO CONDOMINIUMS.

SB2837

THE SENATE

S.B. NO.

2837

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.
�
The legislature finds that
association-governed residential condominium communities comprise a significant
portion of the State's housing stock.
�

The number of individuals living in residences governed by condominium
associations has risen steadily for over sixty years and is expected to
increase because it is one of the more affordable means of home ownership.

����
The
legislature also finds that the state should support policies that foster trust
and confidence in association governance, maintain the representative character
of associations, and ensure ongoing viability of this type of property
ownership.

����
The
legislature also finds that, although the use of proxies in condominium association
board elections provides the appearance of greater member participation, there
have been numerous reports of cases where proxies are used by incumbent board directors
to pre-determine the outcome of an association board election, at times with
the assistance of managing agents, by using blocks of proxies to reelect
themselves and remain in their positions for decades.
�

����
The
legislature additionally finds that elections by direct owner ballot votes, by
mail or in-person, remove the need for proxy assignments, ensuring fairer
elections for condominium association boards.

����
Accordingly,
the purpose of this Act is to:

����
(1)
�
Modify quorum requirements and repeal statutory
proxy voting provisions for condominium association board elections;

����
(2)
�
Authorize the real estate commission to
take any of the following actions for alleged or actual violations of rules or
laws relating to condominium association board elections:

���������
(A)
�
Undertake i
nvestigations;

���������
(B)
�
Undertake c
ivil proceedings in a court
with the intention of enjoining certain acts or practices;

���������
(C)
�
Issue and s
erve cease and desist orders;
and

���������
(D)
�
Impose penalties;

����
(3)
�
Impose certain duties and obligations
on condominium association board members with regard to election processes;

����
(4)
�
Clarify the conditions for a valid condominium
association board election; and

����
(5)
�
Substitute certain requirements for
written affidavits with requirements for written certification in relation to
access to certain association documents.

����
SECTION

2
.
�
Section
514B-61, Hawaii Revised Statutes, is amended by amending subsection (b) to read
as follows:

����
"(b)
�
If it appears that any person has engaged, is
engaging, or is about to engage in any act or practice in violation of this
part, part V, section 514B‑103,
514B-121, 514B-123, 514B-124.5,

514B‑132, 514B‑134, 514B‑149, sections 514B‑152 to 514B‑154,
section 514B‑154.5, or any of the commission's related rules or orders,
the commission, without prior administrative proceedings, may maintain an
action in the appropriate court to enjoin that act or practice or for other
appropriate relief.
�
The commission shall
not be required to post a bond or to prove that no adequate remedy at law
exists in order to maintain the action."

����
SECTION

3
.
�
Section
514B-65, Hawaii Revised Statutes, is amended to read as follows:

����
"
�514B-65
�

Investigative powers.
�
If the
commission has reason to believe that any person is violating or has violated
this part, part V, section 514B‑103,
514B-121, 514B-123, 514B‑124.5,

514B‑132, 514B‑134, 514B‑149, sections 514B‑152 to 514B‑154,
section 514B‑154.5, or the rules of the commission adopted pursuant
thereto, the commission may conduct an investigation of the matter and examine
the books, accounts, contracts, records, and files of all relevant
parties.
�
For purposes of this
examination, the developer and the real estate broker shall keep and maintain
records of all sales transactions and of the funds received by the developer
and the real estate broker in accordance with chapter 467 and the rules of the
commission, and shall make the records accessible to the commission upon
reasonable notice and demand."

����
SECTION

4
.
�
Section
514B-66, Hawaii Revised Statutes, is amended to read as follows:

����
"
�514B-66
�

Cease and desist orders.
�
In
addition to its authority under sections 514B‑67 and 514B‑68,
whenever the commission has reason to believe that any person is violating or
has violated this part, part V, section 514B‑103,
514B-121, 514B-123,
514B-124.5,
514B‑132, 514B‑134, 514B‑149, sections 514B‑152
to 514B‑154, section 514B‑154.5, or the rules of the commission
adopted pursuant thereto, it may issue and serve upon the person a complaint
stating its charges in that respect and containing a notice of a hearing at a
stated place and upon a day at least thirty days after the service of the
complaint.
�
The person served [
has
]

shall have
the right to appear at the place and time specified and show
cause why an order should not be entered by the commission requiring the person
to cease and desist from the violation of the law or rules charged in the
complaint.
�
If the commission finds that
this chapter or the rules of the commission have been or are being violated, it
shall make a report in writing stating its findings as to the facts and shall
issue and cause to be served on the person an order requiring the person to
cease and desist from the violations.
�

The person, within thirty days after service upon the person of the
report or order, may obtain a review thereof in the appropriate circuit
court."

����
SECTION

5
.
�
Section
514B-68, Hawaii Revised Statutes, is amended to read as follows:

����
"
�514B-68
�

Power to enjoin.
�
Whenever the
commission believes from satisfactory evidence that any person has violated
this part, part V, section 514B‑103,
514B-121, 514B-123, 514B‑124.5,

514B‑132, 514B‑134, 514B‑149, sections 514B‑152 to 514B‑154,
section 514B‑154.5, or the rules of the commission adopted pursuant
thereto, it may conduct an investigation of the matter and bring an action
against the person in any court of competent jurisdiction on behalf of the
State to enjoin the person from continuing the violation or doing any acts in
furtherance thereof."

����
SECTION

6
.
�
Section
514B-69, Hawaii Revised Statutes, is amended to read as follows:

����
"
�514B-69
�

Penalties.
�
(a) Any person who
violates or fails to comply with this part, part V, section 514B‑103,
514B-121,
514B-123, 514B-124.5,
514B‑132, 514B‑134, 514B‑149,
sections 514B‑152 to 514B‑154, or section 514B‑154.5, shall
be guilty of a misdemeanor and shall be punished by a fine not exceeding
$10,000, or by imprisonment for a term not exceeding one year, or both.
�
Any person who violates or fails to comply
with any rule, order, decision, demand, or requirement of the commission under
this part, part V, section 514B‑103,
514B-121, 514B-123,
514B-124.5,
514B‑132, 514B‑134, 514B‑149, sections 514B‑152
to 514B‑154, or section 514B‑154.5, shall be punished by a fine not
exceeding $10,000.

����
(b)
�
In addition to any other actions authorized
by law, any person who violates or fails to comply with this part, part V,
section 514B‑103,
514B-121, 514B-123, 514B-124.5,
514B‑132,
514B‑134, 514B‑149, sections 514B‑152 to 514B‑154,
section 514B‑154.5, or the rules of the commission adopted pursuant
thereto, shall also be subject to a civil penalty not exceeding $10,000 for any
violation.
�
Each violation shall
constitute a separate offense."

����
SECTION

7
.
�
Section
514B-106, Hawaii Revised Statutes, is amended to read as follows:

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

the
board action or rescinding or withdrawing the violating conduct
within forty-five days of the occurrence of the initial violation.

����
(b)
�
The board may 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.
�
Notice of a special association meeting to
fill vacancies shall include notice of the election.
�
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
]
votes

for that purpose.

����
(c)
�
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.

����
(d)
�
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:

����
(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;

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

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

����
(4)
�
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.

����
(e)
�
Not 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.

����
(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).

����
(g)
�
Within ninety days after being elected or
appointed to the board, each newly elected or appointed director shall certify
in writing to the secretary of the association that the director:

����
(1)
�
Has read the association's
declaration, articles of incorporation, bylaws, house rules, and other
association documents necessary for the operation of the property;

����
(2)
�
Shall work to uphold the
association's declaration, articles of incorporation, bylaws, house rules, and
other association documents to the best of the director's ability; and

����
(3)
�
Shall faithfully discharge the
director's fiduciary duty to the association;

provided
that the written certification shall be valid for the entirety of the
director's uninterrupted term of office.
�

A director who fails to timely file the written certification shall be
automatically suspended from service on the board until the director complies
with this subsection.
�
The board may
appoint a member to temporarily fill the vacancy during the director's period
of suspension.
�
The secretary shall
retain the director's written certification for inspection by association
members for five years after a director's election or appointment, or the
duration of the director's uninterrupted term of office, whichever is
longer.
�
Failure to retain a record of a
director's written certification shall not affect the validity of any board
action.
"

����
SECTION

8
.
�
Section
514B-121, Hawaii Revised Statutes, is amended as follows:

����
1.

�
By amending subsection (c) to read:

����
"
(c)
�

Special meetings of the association may be called by the president, a
majority of the board,
or by a petition to the secretary or managing
agent signed and dated by [
no
]
not
less than twenty-five per cent
of the unit owners as shown in the association's record of ownership; provided
that if the secretary or managing agent fails to send out the notices for the
special meeting within fourteen days of receipt of the petition, the
petitioners shall have the authority to set the time, date, and place for the
special meeting and to send out the notices [
and proxies
] for the
special meeting at the association's expense in accordance with the
requirements of the bylaws and of this part; provided further that a special
meeting based upon a petition to the secretary or managing agent shall be set
no later than sixty days from receipt of the petition.
�
The petition shall be valid only if submitted
within one hundred twenty days of the earliest signature."

����
2.

�
By amending subsection (e) to read:

����
"(e)
�
Notwithstanding any provision to the
contrary in the association's declaration or bylaws, electronic meetings,
electronic voting, and mail voting may be authorized by the board in its sole
discretion:

����
(1)
�
During any period in which a state of
emergency or local state of emergency, declared pursuant to chapter 127A, is in
effect in the county in which the condominium is located;

����
(2)
�
For any association meeting for which
notice was given while a state of emergency or local state of emergency,
declared pursuant to chapter 127A, was in effect for the county in which the
condominium is located but is no longer in effect as of the date of the
meeting; provided that the meeting is held within sixty days of the date the
notice was first given;

����
(3)
�
When approved by adoption of a special
meeting rule at an association meeting that permits the board to authorize
electronic meetings, electronic voting, and mail voting;

����
(4)
�
When approved [
no
]
not

less than three months and [
no
]
not
more than eighteen months
before the electronic meeting, electronic voting, and mail voting by:

���������
(A)
�
Written consent of a majority of unit
owners; or

���������
(B)
�
Majority vote at an association
meeting; or

����
(5)
�
Whenever otherwise authorized in an
association's declaration or bylaws.

����
For
any electronic meetings, electronic voting, and mail voting, the voting
deadline shall be within sixty days of the date the notice was first sent.
�
The association shall implement reasonable
measures to verify that each person permitted to vote is a member of the
association [
or proxy of a member
].

����
As
used
in this
subsection, "mail voting" includes sending or receiving written
ballots via mail, courier, or electronic transmission; provided that the
transmission is a complete reproduction of the original.
"

����
SECTION

9
.
�
Section
514B-123, Hawaii Revised Statutes, is amended to read as follows:

����
"
�514B-123
�
Association meetings; voting; [
proxies.
]

ballots; notice of election.
�
(a)
�
If only one of several owners of a unit is
present at a meeting of the association, that owner [
is
]
shall be

entitled to cast all the votes allocated to that unit.
�
If more than one of the owners is present,
the votes allocated to that unit may be cast only in accordance with the
agreement of a majority in interest of the owners, unless the declaration or
bylaws expressly provide otherwise.
�

There is majority agreement if any one of the owners casts the votes
allocated to that unit without protest being made by any of the other owners of
the unit to the person presiding over the meeting before the polls are closed.

����
(b)
�
[
Votes allocated to a unit may be cast
pursuant to a proxy duly executed by a unit owner.
]
�
A unit owner may vote by mail or electronic
transmission [
through a duly executed proxy
].
�
If a unit is owned by more than one person,
each owner of the unit may vote or register protest to the casting of votes by
the other owners of the unit [
through a duly executed proxy
].
�
In the absence of protest, any owner may cast
the votes allocated to the unit [
by proxy.
�

A unit owner may revoke a proxy given pursuant to this section only by
actual notice of revocation to the secretary of the association or the managing
agent.
�
A proxy is void if it purports to
be revocable without notice
].

����
(c)
�
No votes allocated to a unit owned by the
association may be cast for the election or reelection of directors; provided
that, notwithstanding section 514B-106(b) or any provision in an association's
declaration or bylaws to the contrary, in a mixed-use project containing units
for residential and nonresidential use, where the board is comprised of
directors elected by owners of residential units and directors elected by
owners of nonresidential units, the association, acting by and through its
board, may cast the vote or votes allocated to any nonresidential unit owned by
the association in any election of one or more directors where those eligible
to vote in the election are limited to owners of one or more nonresidential
units, which includes the nonresidential unit owned by the association.

����
(d)
�
A [
proxy,
]
ballot,
to be valid,
shall:

����
(1)
�
Be delivered to the secretary of the association
or the managing agent, if any, [
no
]
not
later than 4:30 p.m. Hawaii-Aleutian
Standard Time on the second business day [
prior to
]
before
the
date of the meeting to which it pertains; and

����
(2)
�
Contain at least the name of the association[
,
]

and
the date of the meeting of the association[
, the printed names
and signatures of the persons giving the proxy, the unit numbers for which the
proxy is given, the names of persons to whom the proxy is given, and the date
that the proxy is given
].

����
[
(e)
�
If a proxy is a
standard
proxy form authorized by the association, the proxy shall comply with the
following additional requirements:

����
(1)
�
The proxy shall c
ontain boxes wherein the owner may indicate that
the proxy is given:

���������
(A)
�
For
quorum purposes only;

���������
(B)
�
To
the individual whose name is printed on a line next to this box;

���������
(C)
�
To
the board as a whole and that the vote is to be made on the basis of the
preference of the majority of the directors present at the meeting; or

���������
(D)
�
To
those directors present at the meeting with the vote to be shared with each
director receiving an equal percentage;

���������
provided that if the proxy is returned with no box or more than one of
the boxes in subparagraphs (A) through (D) checked, the proxy shall be counted
for quorum purposes only; and

����
(2)
�
The proxy form shall also contain a
box wherein the owner may indicate that the owner wishes to obtain a copy of
the annual audit report required by section 514B‑150.

����
(f)
�
A proxy shall only be valid
for the meeting to which the proxy pertains and its adjournments, may designate
any person as proxy, and may be limited as the unit owner desires and
indicates; provided that no proxy shall be irrevocable unless coupled with a
financial interest in the unit.
]

����
(e)
�
In the case of any election of
one or more directors, to be valid, a ballot shall:

����
(1)
�
List
all eligible candidates in alphabetical order by last name, without indicating
whether any candidate is an incumbent;

����
(2)
�
Not
allow for write-in candidates; and

����
(3)
�
Not
contain a space for the owner's signature.

����
(f)
�
With respect to any election
of one or more directors:

����
(1)
�
The
first notice of election shall:

���������
(A)
�
Be
mailed or electronically submitted to each unit owner at least sixty days
before the election;

���������
(B)
�
Contain
the correct name and mailing address of the association; and

���������
(C)
�
Contain
language reminding unit owners of the notice of intent requirements under
subsection (g); and

����
(2)
�
The
second notice of election shall:

���������
(A)
�
Be m
ailed to unit owners between twenty-one and thirty-four days before the
election;

���������
(B)
�
Be a
ccompanied by:

��������������
(i)
�
The
written annual meeting notice and agenda;

�������������
(ii)
�
A
printed ballot for each unit owned by that owner; and

������������
(iii)
�
An
envelope that meets the requirements of subsection (j); and

���������
(C)
�
Be posted conspicuously and continuously on
the condominium property at least twenty-one days before the annual meeting and
election.

����
(g)
�
A unit owner who wishes to
serve on the board shall submit written notice of intent to the board or
managing agent not later than forty days before the election, accompanied by a
written statement to the board of the unit owner's qualifications to serve on
the board or reasons for wanting to receive votes.
�
The statement shall be limited to black text
on one side of white paper, which shall not exceed the size of eight and
one-half inches by eleven inches.

����
(h)
�
The written notice of intent
under subsection (g) shall be deemed effective upon receipt by the association
when submitted by one or more of the following methods:

����
(1)
�
Certified
mail, return receipt requested;

����
(2)
�
Personal
delivery;

����
(3)
�
Regular
mail; or

����
(4)
�
Facsimile.

����
Upon receipt of a timely written notice by personal delivery, regular
mail, or facsimile, the association shall issue a written acknowledgement of
receipt to the unit owner.

����
(i)
�
If a member of the board, in
the member's individual capacity, seeks to solicit votes using association
funds, the board member shall submit written notice of intent to the board not
later than forty days before the election, accompanied by a written statement
to the board indicating the member's reason for wanting to receive votes.

����
(j)
�
A ballot envelope that
accompanies the second notice of election under subsection (f)(2) shall contain:

����
(1)
�
A
n unmarked, smaller inner envelope to ensure secrecy in voting for each
completed ballot;

����
(2)
�
A
larger, outer envelope to return each completed ballot, preaddressed to
the person or entity authorized to receive ballots on behalf of the
association, with space on the outside of the envelope for:

���������
(A)
�
The name of the eligible unit owner, unit
number, and unit owner's signature; and

���������
(B)
�
A box to indicate whether the unit owner
wishes to receive a copy of the annual audit report required by section
514B-150;

����
(3)
�
A copy of
any written statements received by the board
under subsection (g); and

����
(4)
�
Instructions
directing a unit owner, upon completion of the ballot, to place the ballot in
the inner envelope, place the sealed inner envelope in the outer envelope, and
seal the outer envelope.

����
[
(g)
]
(k)
�
A copy, facsimile telecommunication, or other
reliable reproduction of a [
proxy
]
ballot
may be used in lieu of
the original [
proxy
]
ballot
for any and all purposes for which
the original [
proxy
]
ballot
could be used; provided that any
copy, facsimile telecommunication, or other reproduction shall be a complete
reproduction of the entire original [
proxy.
]
ballot.

����
[
(h)
�
Nothing in this section shall
affect the holder of any proxy under a first mortgage of record encumbering a
unit or under an agreement of sale affecting a unit.

����
(i)
�
With respect to the use of
association funds to distribute proxies:

����
(1)
�
Any
board that intends to use association funds to distribute proxies, including
the standard proxy form referred to in subsection (e), shall first post notice
of its intent to distribute proxies in prominent locations within the project
at least twenty-one days before its distribution of proxies.
�
If the board receives within seven days of
the posted notice a request by any owner for use of association funds to
solicit proxies accompanied by a statement, the board shall mail to all owners
either:

���������
(A)
�
A
proxy form containing the names of all owners who have requested the use of
association funds for soliciting proxies accompanied by their statements; or

���������
(B)
�
A
proxy form containing no names, but accompanied by a list of names of all
owners who have requested the use of association funds for soliciting proxies
and their statements.

���������
The statement, which shall be limited to black text on white paper, shall
not exceed one single-sided 8‑1/2" x 11" page, indicating
the owner's qualifications to serve on the board or reasons for wanting to
receive proxies; and

����
(2)
�
A board or member of the board may
use association funds to solicit proxies as part of the distribution of
proxies.
�
If a member of the board, as an
individual, seeks to solicit proxies using association funds, the board member
shall proceed as a unit owner under paragraph (1).

����
(j)
�
No managing agent or resident manager, or
their employees, shall solicit, for use by the managing agent or resident
manager, any proxies from any unit owner of the association that retains the
managing agent or employs the resident manager, nor shall the managing agent or
resident manager cast any proxy vote at any association meeting except for the
purpose of establishing a quorum.

����
(k)
]
(l)
�
No board shall adopt any rule prohibiting the
solicitation of [
proxies
]
votes
or distribution of materials
relating to association matters on the common elements by unit owners; provided
that a board may adopt rules regulating reasonable time, place, and manner of
the solicitations or distributions, or both.
"

����
SECTION

10
.
�
Section
514B-124.5, Hawaii Revised Statutes, is amended to read as follows:

����
"[
[
]�514B-124.5[
]
]
�
Voting for elections; cumulative voting[
.
]
;
runoff elections; penalties.
�

(a)
�
If the bylaws provide for
cumulative voting for an election at a meeting, each unit owner [
present in
person or represented by proxy
] shall have a number of votes equal to the
unit owner's voting percentage multiplied by the number of positions to be
filled at the election.

����
(b)
�
Each unit owner shall be entitled to cumulate
the votes of the unit owner and give all of the votes to one nominee or
distribute the votes among any or all of the nominees.

����
(c)
�
The nominee or nominees receiving the highest
number of votes under this section, up to the total number of positions to be
filled, shall be deemed elected and shall be given the longest term.

����
(d)
�
This section shall not prevent the filling of
vacancies on the board of directors in accordance with this chapter and the
association's governing documents.

����
(e)
�
A quorum shall not be required to hold an
election; provided that the election shall not be valid unless at least twenty
per cent of the eligible unit owners cast ballots.
�
The association shall have blank ballots
available at the election for distribution to eligible unit owners who have not
yet voted.
�
The ballots shall be handled
in the same manner as ballots submitted with the second notice of election
under subsection 514B-123(f).
"

����
(f)
�
No unit owner shall authorize any other
person to vote on the owner's behalf; provided that a unit owner who requires
assistance casting a ballot may obtain assistance.

����
(g)
�
The regular election of directors shall occur
at the annual meeting.
�
The first order
of business at the annual meeting shall be the collection of ballots not yet
cast.

����
(h)
�
An election shall not be required unless the
number of candidates who file notices of intent pursuant to subsection
514B-123(g), or the number of candidates who are nominated, exceed the number
of board vacancies, or the board vacancies are for unequal terms of office.

����
(i)
�
The association shall conduct a runoff
election for candidates who tie unless the bylaws provide for a different
method for deciding tied votes.
�
If a
runoff election is required, the runoff election shall be held between
twenty-one days and thirty days after the date of the election at which the
tied vote occurred.
�
Within seven days of
the election at which the tied vote occurred, the board shall mail or
personally deliver to the unit owners a notice of runoff election and meet the
requirements for ballot envelopes specified under section 514B-123(j).

����
(j)
�
Any challenge to the election process shall
be commenced within sixty days after the election results are announced.

����
(k)
�
A ballot that is not cast in accordance with
this chapter shall be deemed invalid.

����
(l)
�
Any person who knowingly votes when the
person is not entitled to vote under this chapter shall be guilty of a class C
felony.

����
(m)
�
Forgery of a ballot envelope used in an
election under this chapter or certificate of election shall be punishable as
forgery in the third degree pursuant to section 708-853.
"

����
SECTION

11
.
�
Section
514B-150, Hawaii Revised Statutes, is amended by amending subsection (b) to
read as follows:

����
"(b)
�
The board shall make available a copy of the
annual audit to each unit owner at least thirty days [
prior to
]
before

the annual meeting [
which
]
that
follows the end of the fiscal
year.
�
The board shall not be required to
submit a copy of the annual audit report to an owner if the [
proxy form
]

ballot envelope
issued pursuant to section [
514B‑123(e)
]
514B-123(j)

is not marked to indicate that the owner wishes to obtain a copy of the
report.
�
If the annual audit has not been
completed by that date, the board shall make available:

����
(1)
�
An unaudited [
year end
]
year-end

financial statement for the fiscal year to each unit owner at least thirty days
[
prior to
]
before
the annual meeting; and

����
(2)
�
The annual audit to all owners at the annual
meeting, or as soon as the audit is completed, but not later than six months
after the annual meeting."

����
SECTION

12
.
�
Section
514B-153, Hawaii Revised Statutes, is amended by amending subsection (e) to
read as follows:

����
"(e)
�
The
managing

agent, resident manager, or board shall keep an accurate and current list of
members of the association and their current addresses, and the names and
addresses of the vendees under an agreement of sale, if any.
�
The list shall be maintained at a place
designated by the board, and a copy shall be available, at cost, to any member
of the association as provided in the declaration or bylaws or rules and
regulations or, in any case, to any member who furnishes to the managing agent
or resident manager or the board a [
duly executed and acknowledged affidavit
]

written certification
stating that the list:

����
(1)
�
Will be used by the owner personally and only
for the purpose of soliciting votes [
or proxies
] or providing
information to other owners with respect to association matters; and

����
(2)
�
Shall not be used by the owner or furnished to
anyone else for any other purpose.

����
A board may
prohibit commercial solicitations.

����
Where
the condominium project or any units within the project are subject to a time
share plan under chapter 514E, the association shall only be required to
maintain in its records the name and address of the time share association as
the representative agent for the individual time share owners unless the
association receives a request by a time share owner to maintain in its records
the name and address of the time share owner.
"

����
SECTION

13
.
�
Section
514B-154, Hawaii Revised Statutes, is amended by amending subsection (c) to
read as follows:

����
"
(c)
�
After any association meeting, and not
earlier, unit owners shall be permitted to examine [
proxies,
] tally
sheets, ballots, owners' check-in lists, and the certificate of election;
provided that:

����
(1)
�
Owners shall make a request to examine the
documents within thirty days after the association meeting;

����
(2)
�
The board may require owners to furnish to the
association a [
duly executed and acknowledged affidavit
]
written
certification
stating that the information is requested in good faith for
the protection of the interest of the association or its members or both; and

����
(3)
�
Owners shall pay for administrative costs in
excess of eight hours per year.

����
The documents
may be destroyed ninety days after the association meeting; provided that in
the event of a contested election, the documents shall be retained until the
contested election is resolved.
�
Copies
of tally sheets, owners' check-in lists, and the certificates of election from
the most recent association meeting shall be provided to any owner upon the
owner's request; provided that the owner pays a reasonable fee for duplicating,
postage, stationery, and other administrative costs associated with handling
the request."

����
SECTION

14
.
�
Section
514B-154.5, Hawaii Revised Statutes, is amended by amending subsection (a) to
read as follows:

����
"(a)
�
Notwithstanding any other provision in the
declaration, bylaws, or house rules, if any, the following documents, records,
and information, whether maintained, kept, or required to be provided pursuant
to this section or section 514B-152, 514B-153, or 514B-154, shall be made
available to any unit owner and the owner's authorized agents by the managing
agent, resident manager, board through a board member, or the association's
representative:

����
(1)
�
All financial and other records
sufficiently detailed in order to comply with requests for information and
disclosures related to the resale of units;

����
(2)
�
An accurate copy of the declaration,
bylaws, house rules, if any, master lease, if any, a sample original conveyance
document, and all public reports and any amendments thereto;

����
(3)
�
Detailed, accurate records in
chronological order of the receipts and expenditures affecting the common
elements, specifying and itemizing the maintenance and repair expenses of the
common elements and any other expenses incurred and monthly statements indicating
the total current delinquent dollar amount of any unpaid assessments for common
expenses;

����
(4)
�
All records and the vouchers
authorizing the payments and statements kept and maintained at the address of
the project, or elsewhere within the State as determined by the board, subject
to section 514B-152;

����
(5)
�
All signed and executed agreements for
managing the operation of the property, expressing the agreement of all
parties, including but not limited to financial and accounting obligations,
services provided, and any compensation arrangements, including any subsequent
amendments;

����
(6)
�
An accurate and current list of members
of the condominium association and the members' current addresses and the names
and addresses of the vendees under an agreement of sale, if any.
�
A copy of the list shall be available, at
cost, to any unit owner or owner's authorized agent who furnishes to the
managing agent, resident manager, or the board a [
duly executed and
acknowledged affidavit
]
written certification
stating that the list:

���������
(A)
�
Shall be used by the unit owner or
owner's authorized agent personally and only for the purpose of soliciting
votes [
or proxies
] or for providing information to other unit owners
with respect to association matters; and

���������
(B)
�
Shall not be used by the unit owner or
owner's authorized agent or furnished to anyone else for any other purpose;

����
(7)
�
The association's most current
financial statement, at no cost or on twenty-four-hour loan, at a convenient
location designated by the board;

����
(8)
�
Meeting minutes of the association,
pursuant to section 514B-122;

����
(9)
�
Meeting minutes of the board, pursuant
to section 514B-126, which shall be:

���������
(A)
�
Available for examination by unit
owners or owners' authorized agents at no cost or on twenty-four-hour loan at a
convenient location at the project, to be determined by the board; or

���������
(B)
�
Transmitted to any unit owner or
owner's authorized agent making a request for the minutes within fifteen days
of receipt of the request by the owner or owner's authorized agent; provided
that:

��������������
(i)
�
The minutes shall be transmitted by
mail, electronic mail transmission, or facsimile, by the means indicated by the
owner or owner's authorized agent, if the owner or owner's authorized agent
indicated a preference at the time of the request; and

�������������
(ii)
�
The owner or owner's authorized agent
shall pay a reasonable fee for administrative costs associated with handling
the request, subject to section 514B-105(d);

���
(10)
�
Financial statements, general ledgers,
the accounts receivable ledger, accounts payable ledgers, check ledgers,
insurance policies, contracts, and invoices of the association for the duration
those records are kept by the association, and any documents regarding
delinquencies of ninety days or more shall be available for examination by unit
owners or owners' authorized agents at convenient hours at a place designated
by the board; provided that:

���������
(A)
�
The board may require unit owners or
owners' authorized agents to furnish to the association a [
duly executed and
acknowledged affidavit
]
written certification
stating that the
information is requested in good faith for the protection of the interests of
the association, its members, or both; and

���������
(B)
�
Unit owners or owners' authorized
agents shall pay for administrative costs in excess of eight hours per year;

���
(11)
�
[
Proxies, tally
]
Tally

sheets, ballots, unit owners' check-in lists, and the certificate of election
subject to section 514B-154(c);

���
(12)
�
Copies of an association's documents,
records, and information, whether maintained, kept, or required to be provided
pursuant to this section or section 514B‑152, 514B-153, or 514B-154;

���
(13)
�
A copy of the management contract from
the entity that manages the operation of the property before the organization
of an association;

���
(14)
�
Other documents requested by a unit
owner or owner's authorized agent in writing; provided that the board shall
give written authorization or written refusal with an explanation of the
refusal within thirty calendar days of receipt of a request for documents
pursuant to this paragraph; and

���
(15)
�
A copy of any contract, written job
description, and compensation between the association and any person or entity
retained by the association to manage the operation of the property on-site,
including but not limited to the general manager, operations manager, resident
manager, or site manager; provided that personal information may be redacted
from the contract copy, including but not limited to the manager's date of
birth, age, signature, social security number, residence address, telephone
number, non-business electronic mail address, driver's license number, Hawaii
identification card number, bank account number, credit or debit card number,
access code or password that would permit access to the manager's financial
accounts, or any other information that may be withheld under state or federal
law."

����
SECTION
15.
�
This Act does not affect rights and
duties that matured, penalties that were incurred, and proceedings that were
begun before its effective date.

����
SECTION
16.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION
17.
�
This Act shall take effect upon its
approval.

INTRODUCED BY:

_____________________________

Report Title:

Real
Estate Commission; Condominiums; Associations; Boards; Elections; Proxies;
Repeal

Description:

Modifies quorum requirements and repeals condominium
association board election proxy voting.
�

Authorizes the Real Estate Commission to take certain actions in
response to alleged or actual violations of rules or laws relating to
condominium association board elections.
�

Imposes certain duties and obligations on condominium association directors
concerning election processes.
�
Clarifies
the conditions for a valid condominium association board election.
�
Substitutes certain requirements for written
affidavits with requirements for written certification in relation to access to
association documents.

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