HRLNG Hawaii Branch DRAFT AMENDMENT TARGETS 2024-25 

1. Section 514B-106 (Board; Powers and Duties):  

   • Current Language: Empowers the board to manage the operation of the property and to enforce  compliance with the governing documents.  

   • Proposed Amendment: Introduce requirements for the board to act in good faith, incorporating checks  against potential abuses of power. This could include specific duties for transparency in decision-making  and responsiveness to member complaints, with penalties for non-compliance.  

2. Section 514B-123 (Association Meetings; Voting; Proxies):  

   • Current Language: Discusses how voting at association meetings can be conducted, including by proxy. 

   • Proposed Amendment: Modify to ensure equal voting rights, stating that no member can acquire  disproportionate voting power through multiple property ownerships, and to potentially restrict or regulate  the use of proxies to prevent manipulation of votes.  

3. Section 514B-152 (Association Records; Generally):  

   • Current Language: Outlines the requirement for the association to maintain records of its financial affairs  and actions.  

   • Proposed Amendment: Could be expanded to require more detailed financial disclosures regularly to all  members and to mandate the provision of a free, accessible member contact list to facilitate better  communication and transparency.  

4. Section 514B-148 (Association Fiscal Matters; Budgets and Reserves):  

   • Current Language: Requires the association to adopt an annual budget and maintain reserves for future  expenses.  

   • Proposed Amendment: Add provisions to cap and clearly outline all fines, late fees, and collection costs,  and limit attorney fees associated with collection efforts to a reasonable percentage of the original debt,  thus protecting members from potentially exploitative financial practices.  

5. Section 514B-107 (Board; Limitations):  

   • Current Language: Specifies what the board may do on behalf of the association, except as limited by the  declaration or bylaws.  

   • Proposed Amendment: Add provisions that prevent the board from enacting any rules or bylaws that  infringe upon the constitutional rights of members, such as free speech. Any rule or bylaw found to be  infringing upon these rights would be deemed null and void.  

6. Section 514B-124 (Association Meetings; Purchaser’s Right to Vote):  

   • Current Language: Defines the conditions under which unit purchasers may vote.  

   • Proposed Amendment: Clarify and reinforce that each unit owner should have an equal vote, with no  additional voting rights being granted based on property ownership beyond the initial vote to ensure  fairness and equity in association decisions.  

7. Section 514B-161 (Mediation) and Section 514B-162 (Arbitration): 

   • Current Language: Allows for mediation and arbitration as methods to resolve disputes.  

   • Proposed Amendment: Make mediation mandatory before pursuing litigation or foreclosure, and specify  that all disputes related to fines, fees, or foreclosure must be resolved through state mediation or small  claims court before any legal action can be taken.  HRLNG Hawaii Branch DRAFT AMENDMENT TARGETS 2024-25  

8. Section 514B-72 (Condominium Education Trust Fund; Payments by Associations and Developers):  

   • Current Language: Associations and developers contribute to a fund intended for the education of  owners, associations, and developers.  

   • Proposed Amendment: Expand the use of this fund to also support enforcement of HOA laws, including  the funding of the State HOA Office proposed by HRLNG to ensure the office has adequate resources to  perform its duties effectively.  

9. Section 514B-146 (Association Fiscal Matters; Lien for Assessments):  

•  Current Language: Discusses how liens are created when an owner fails to pay their share of common  expenses.  

•  Proposed Amendment: Introduce a threshold for foreclosure actions, specifying that no foreclosure  can occur unless the debt exceeds a significant amount (e.g., $10,000 or 1% of the association's  annual budget) and require a 90-day notice along with an offer for mediation before initiating  foreclosure.  

10. Section 514B-9 (Obligation of Good Faith):  

   • Current Language: Imposes an obligation of good faith in the performance or enforcement of any duty or  contract governed by the chapter.  

   • Proposed Amendment: Strengthen this section by specifying that violations of good faith, especially those  that are intentional and detrimental to members, are subject to individual penalties, including fines and  potential removal from positions of power within the HOA.  

11. Section 467 (Real Estate Brokers and Salespersons):  

   • Current Language: Governs the licensing and conduct of real estate brokers and salespersons, including  those who may serve as managing agents for HOAs.  

   • Proposed Amendment: Expand the requirements for transparency and accountability for managing  agents, including mandatory disclosures of any conflicts of interest and stricter penalties for  mismanagement or misuse of HOA funds.  

12. Creation of a New Section:  

   • Proposed New Section: Establish an independent review board or ombudsman dedicated to HOA  governance, which would have the authority to investigate complaints, mediate disputes, and enforce  regulations. This body would be funded by a small annual fee from each HOA member, ensuring its  operational independence from the associations it regulates.  

13. Comprehensive Reform of Section 514B (General Provisions):  

   • Current Language: Various provisions address the governance and operational aspects of condominium  associations.  

   • Proposed Comprehensive Amendment: Include requirements for periodic audits of financial and  operational practices, mandatory training for new board members on their legal responsibilities, and the  establishment of a clear, accessible process for homeowners to report grievances related to board  mismanagement or misconduct.