RELATING TO CONDOMINIUMS.

SB3181

THE SENATE

S.B. NO.

3181

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:

PART I

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SECTION
1.
�
The legislature finds that
condominium associations manage millions of dollars in common property and reserves
and make decisions that directly affect the safety, financial stability, and
quality of life of Hawai
ʻ
i
residents.

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The
legislature further finds condominium association directors, officers, and
managers exercise significant fiduciary authority over association finances,
contracts, and common property.
�
However,
existing condominium law does not require standardized education or training in
fiduciary duties, financial oversight, conflicts of interest, or compliance
with state law, nor does it require specialized knowledge and experience with
condominium law.
�
This lack of education
has contributed to preventable governance errors, deferred maintenance, owner
disputes, and costly litigation, undermining trust and increasing financial
risk.

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The
legislature also finds that other states have successfully implemented
programs to bolster the education and preparedness of directors, officers, and
managers in managing the operations of a condominium association.
�
Several states have successfully implemented
statutory or trust-funded director education programs � including Colorado, Florida,
Maryland, Nevada, and Virginia � resulting in more informed boards, better
financial oversight, and reduced disputes.
�
Additionally, several other states � including
Alaska, Connecticut, Florida, Georgia, Illinois, Nevada, and Virginia �
established regulatory frameworks for the licensure of association managers
that requires a third-party certification or minimum level of management and
condominium education.

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The
purpose of this Act is to bolster condominium governance in the State by:

����
(1)
�
Requiring mandatory education for condominium
directors and officers to promote informed, accountable, and responsible
governance; and

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(2)
�
Establishing a regulatory framework for the
licensure of association managers.

PART II

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SECTION
2
.
�
Section 514B-71, Hawaii Revised Statutes, is
amended by amending subsection (a) to read as follows:

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"(a)
�
The commission shall establish a condominium
education trust fund that the commission shall use for educational
purposes.
�
Educational purposes shall
include financing or promoting:

����
(1)
�
Education and
research in the field of condominium management, condominium project
registration, and real estate, for the benefit of the public and those required
to be registered under this chapter;

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(2)
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The improvement
and more efficient administration of associations;

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(3)
�
Expeditious and
inexpensive procedures for resolving association disputes;

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(4)
�
Support for
mediation of condominium related disputes; [
and
]

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(5)
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Support for
voluntary binding arbitration between parties in condominium related disputes,
pursuant to section 514B-162.5[
.
]
; and

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(6)
�
The commission-developed or
commission-approved training curriculum for association directors and officers
to fulfill the educational requirements under section 514B-107.
"

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SECTION
3
.
�
Section 514B-107, Hawaii Revised Statutes, is
amended to read as follows:

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"
�514B-107
�
Board; limitations.
�

(a)
�
Members of the board
shall be unit owners or co-owners, vendees under an agreement of sale, a
trustee of a trust which owns a unit, or an officer, partner, member, or other
person authorized to act on behalf of any other legal entity which owns a
unit.
�
There shall not be more than one
representative on the board from any one unit.

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(b)
�
No tenant, resident manager, or employee of a
condominium shall serve on its board.

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For the
purposes of this subsection, "tenant" means any person who occupies a
dwelling unit for dwelling purposes who is not also an owner of a dwelling unit
in the same condominium.

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(c)
�
An owner shall not act as an officer of an
association and an employee of the managing agent retained by the
association.
�
Any owner who is a board
member of an association and an employee of the managing agent retained by the
association shall not participate in any discussion regarding a management
contract at a board meeting and shall be excluded from any executive session of
the board where the management contract or the property manager will be
discussed.

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(d)
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Directors shall not expend association funds
for their travel, directors' fees, and per diem, unless owners are informed and
a majority approve of these expenses; provided that, with the approval of the
board, directors may be reimbursed for actual expenditures incurred on behalf
of the association.
�
The board meeting
minutes shall reflect in detail the items and amounts of the reimbursements.

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(e)
�

Associations at their own expense shall provide all board members with a
current copy of the association's declaration, bylaws, house rules, and,
annually, a copy of this chapter with amendments.

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(f)
�

The directors may expend association funds, which shall not be deemed to
be compensation to the directors, to educate and train themselves in subject
areas directly related to their duties and responsibilities as directors;
provided that the approved annual operating budget shall include these expenses
as separate line items.
�
These expenses
may include registration fees, books, videos, tapes, other educational
materials, and economy travel expenses.
�

Except for economy travel expenses within the State, all other travel
expenses incurred under this subsection shall be subject to the requirements of
subsection (d).

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(g)
�
Each director and officer of an association
shall submit a certification that the director or officer has:

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

����
(2)
�
Completed a commission-developed or
commission-approved training curriculum that, at minimum, shall include
education on the requirements under this chapter concerning association
governance, including conducting meetings and fiscal matters; and

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(3)
�
Any other educational requirement as
determined by the commission by rules adopted pursuant to chapter 91.

The
certification shall be submitted to the board no later than ninety days after
election or appointment.

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A director's or officer's failure to
comply with the requirements under this subsection shall disqualify the
director or officer from serving in that role.
"

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SECTION
4
.
�
Section 514B-154.5, Hawaii Revised Statutes,
is amended by amending subsection (a) to read as follows:

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"(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;

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(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;

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(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;

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(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;

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(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;

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(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 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;

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(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;

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

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(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

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(ii)
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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);

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(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:

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(A)
�
The board may
require unit owners or owners' authorized agents to furnish to the association
a duly executed and acknowledged affidavit 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;

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(11)
�
Proxies, tally
sheets, ballots, unit owners' check-in lists, and the certificate of election
subject to section 514B-154(c);

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(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;

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

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(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
]

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(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[
.
]
; and

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(16)
�
A director's or officer's certification
submitted to the board pursuant to section 514B-107(g).
"

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SECTION
5.
�
Each person serving as a director or
officer of a condominium association who is actively serving on June 30, 2026,
shall certify in writing to the board that the person has duly completed the
requirements of section 514B-107(g), Hawaii Revised Statutes, as amended by
section 2 of this Act, no later than October 1, 2026.

PART III

����
SECTION
6.
�
Chapter 514B, Hawaii Revised
Statutes, is amended by adding a new part to be appropriately designated and to
read as follows:

"
Part .
�
community association managers

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�
514B-
�
Definitions.
�
As used in this part, unless the context
otherwise requires:

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"Association
management" means the performance for compensation of services relating to
the operation, administration, or governance of a community association,
including but not limited to:

����
(1)
�
Financial and budgetary administration;

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(2)
�
Reserve study coordination and long-term
maintenance planning;

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(3)
�
Procurement and contract administration;

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(4)
�
Maintenance and repair coordination;

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(5)
�
Recordkeeping and statutory compliance
assistance; and

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(6)
�
Advising boards on governance procedures and
legal obligations.

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"Association
management firm" means a sole proprietorship, partnership, corporation, or
other business entity that provides association management services through one
or more licensed association managers.

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"Association
manager" means an individual licensed pursuant to this part to provide
association management services.

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�
514B-
�
License required.
�
(a)
�
No
person shall engage in association management for compensation or act as a
managing agent or resident manager unless the person is licensed as an
association manager under this part.

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(b)
�
No association management firm shall operate
in this State unless the association management firm designates at least one
association manager responsible for compliance with this chapter.

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(c)
�
A license issued under this part shall be
specific to association management and shall not constitute, require, or
replace a real estate broker license under chapter 467.

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�
514B-
�
Exemption.
�
This part shall not apply to:

����
(1)
�
Board members who are volunteers acting
without compensation;

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(2)
�
Employees of an association acting under the
direct supervision of an association manager; or

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(3)
�
Attorneys, certified public accountants, or
engineers licensed under the laws of the State and acting within the scope of
their professional licensure.

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�
514B-
�
Rules.
�

The commission shall adopt rules pursuant to chapter 91 necessary to
implement this part, including rules governing:

����
(1)
�
License applications and renewals;

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(2)
�
Fees;

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(3)
�
Examinations;

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(4)
�
Education requirements; and

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(5)
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Disciplinary proceedings.

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�
514B-
�
Qualifications for licensure.
�
An applicant for licensure as an association
manager shall:

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(1)
�
Be at least eighteen years of age;

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(2)
�
Possess a high school diploma or equivalent;

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(3)
�
Complete a commission-approved pre-licensing
education program in:

���������
(A)
�
This chapter;

���������
(B)
�
Fiduciary duties and ethics;

���������
(C)
�
Association budgeting, reserves, and financial
controls;

���������
(D)
�
Procurement and contract administration;

���������
(E)
�
Maintenance planning and life-cycle analysis;
and

���������
(F)
�
Recordkeeping and owner disclosure
requirements;

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(4)
�
Pass a written examination demonstrating
competency in association management; and

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(5)
�
Submit to a criminal history record check as
determined by rule.

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�
514B-
�
Continuing education.
�
(a)
�

Each association manager shall complete continuing education
requirements as a condition of license renewal.

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(b)
�
Continuing education shall include
instruction in:

����
(1)
�
Legislative acts that change any of the
provisions of this chapter;

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(2)
�
Ethics and fiduciary responsibilities;

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(3)
�
Reserve funding and long-term planning; and

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(4)
�
Risk management.

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�
514B-
�
Standards of conduct.
�
An association manager shall:

����
(1)
�
Act in the best interests of the association;

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(2)
�
Exercise reasonable care, diligence, and
professional judgment;

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(3)
�
Disclose and avoid conflicts of interest;

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(4)
�
Comply with this chapter, rules adopted
thereunder, and applicable governing documents; and

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(5)
�
Maintain complete and accurate association
records.

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�
514B-
�
Discipline; enforcement.
�
(a)
�

The commission may deny, suspend, revoke, or place conditions upon a
license and may impose administrative fines for violations of this part or
rules adopted thereunder.

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(b)
�
Grounds for discipline shall include:

����
(1)
�
Fraud or misrepresentation;

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(2)
�
Gross negligence or incompetence

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(3)
�
Misappropriation of association funds;

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(4)
�
Failure to disclose conflicts of interest; or

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(5)
�
Repeated violations of any provision of this
chapter."

PART IV

����
SECTION 7.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION 8.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Condominium
Associations; Directors; Officers; Educational Requirements; Association
Managers; Licensure

Description:

Requires
condominium association directors and officers to complete certain educational
requirements within ninety days of election or appointment.
�
Establishes a regulatory framework for the
licensure of condominium association managers.

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