HOUSE OF REPRESENTATIVES	H.R. NO.	23
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

HOUSE RESOLUTION

 

 

requesting the auditor to conduct a follow-up sunrise review to sunrise analysis:  Condominium association managers, report No. 05-10, which analyzed the regulation of condominium association managers.

 

 

 

     WHEREAS, the Condominium Property Act, Chapter 514B, Hawaii Revised Statutes, authorizes a form of real estate ownership in which individual owners hold title to a specific unit and have an undivided interest as a tenant-in-common with other owners in common elements, such as the exterior of the buildings, grounds, amenities, internal roads, and infrastructure; and

 

     WHEREAS, the Condominium Property Act fully authorizes condominiums to be self-governed by their respective association of unit owners, which is headed by an elected board of directors; and

 

     WHEREAS, in the State as of 2021, there were an estimated 1,826 condominium associations representing 173,036 units, which serve as dwellings, either as a primary residence or otherwise, to approximately 360,000 people; and

 

     WHEREAS, to assist in the management of the properties, condominium associations typically contract with third-party condominium managing agents to perform certain tasks for the association, including overseeing repairs and projects, finances and accounting, insurance and registration renewals, and other tasks pertaining to the management of the property; and

 

     WHEREAS, condominium managing agents are required to be licensed real estate brokers or authorized trust companies under the Condominium Property Act, and they must maintain a fidelity bond based on the number of units managed of no less than $20,000 and no more than $500,000; and

 

     WHEREAS, while many condominiums contract with condominium association managers for the management of the property, there is no requirement that the condominium association managers possess knowledge of the laws and rules governing condominium associations; and

 

     WHEREAS, S.B. No. 1454, Regular Session of 2003, proposed, under the Condominium Property Act's predecessor statute, the establishment of a regulatory framework requiring the certification of condominium association managers by the Real Estate Commission of the Department of Commerce and Consumer Affairs; and

 

     WHEREAS, the Auditor analyzed S.B. No. 1454 in Sunrise Analysis:  Condominium Association Managers, Report No. 05-10, and ultimately concluded that S.B. 1454 not be enacted, relying on two bases:

 

     (1)  The Auditor, after examining the records of the Regulated Industries Complaints Office of the Department of Commerce and Consumer Affairs, found little evidence of complaints from condominium residents against condominium management agents.  Rather, the Auditor found that a vast majority of complaints relating to condominiums were from residents against the board members; and

 

     (2)  It was premature to consider any new proposed regulation with the imminent recodification of the condominium laws into the Condominium Property Act taking effect on July 1, 2006; and

 

     WHEREAS, however, while issues may not be referred to the Regulated Industries Complaints Office, issues continue to persist with the quality of services rendered by some condominium association managers; and

 

     WHEREAS, there have been reports of condominium association managers stifling board members' ability to assist in the management of the property and to address concerns of the residents to whom the board members serve and reports of condominium association managers disregarding requests by board members; and

 

     WHEREAS, section 26H-6, Hawaii Revised Statutes, of the Hawaii Regulatory Licensing Reform Act requires new measures, subjecting unregulated professions and vocations to licensing or other regulatory controls, to be referred to the Auditor for analysis; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2025, that the Auditor is requested to conduct a follow-up sunrise review to Sunrise Analysis:  Condominium Association Managers, Report No. 05-10, which analyzed the regulation of condominium association managers as proposed by S.B. No. 1454, Regular Session of 2005; and

 

     BE IT FURTHER RESOLVED that the Auditor is requested to also examine alternative regulatory frameworks for the regulation of condominium association managers, specifically H.B. No. 298, Regular Session of 2023; S.B. No. 1197, Regular Session of 2017; and S.B. No. 2334, Regular Session of 2010; and

 

     BE IT FURTHER RESOLVED that the Auditor is further requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2026; and

 

     BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Auditor.

 

 

 

	OFFERED BY:	_____________________________

Report Title: 

Auditor; Sunrise Analysis; Condominium Association Managers