Bill Text: HI SB551 | 2019 | Regular Session | Introduced
Bill Title: Relating To Condominiums.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2019-07-12 - Became law without the Governor's signature, Act 282, 07/10/2019, (Gov. Msg. No. 1402). [SB551 Detail]
Download: Hawaii-2019-SB551-Introduced.html
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THE SENATE |
S.B. NO. |
551 |
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THIRTIETH LEGISLATURE, 2019 |
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STATE OF HAWAII |
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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 questions have arisen as to whether condominium associations have the authority to exercise the remedy of nonjudicial foreclosure in the absence of power of sale language in their governing documents.
The reference to "power of sale foreclosure procedures" in existing law signifies that matters such as the manner, means and timing of providing notice, and other procedural aspects of the nonjudicial foreclosure process shall conform to the procedures described in chapter 667. However, this reference is not intended to signify that an association must include power of sale language in its governing documents. The purpose of this Act is to clarify that associations may exercise the remedy of nonjudicial foreclosure regardless of the presence or absence of power of sale language within their governing documents.
SECTION 2. Section 514B-146, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) All
sums assessed by the association but unpaid for the share of the common
expenses chargeable to any unit shall constitute a lien on the unit with
priority over all other liens, except:
(1) Liens for real property taxes and assessments lawfully imposed by
governmental authority against the unit; and
(2) Except as provided in subsection (j), all sums unpaid on any mortgage of
record that was recorded prior to the recordation of a notice of a lien by the
association, and costs and expenses including attorneys' fees provided in such
mortgages;
provided that a
lien recorded by an association for unpaid assessments shall expire six
years from the date of recordation unless proceedings to enforce the lien are instituted prior to
the expiration of the lien; provided further that the expiration of a recorded
lien shall in no way affect the association's automatic lien that arises
pursuant to this subsection or the declaration or bylaws. Any proceedings to enforce an association's
lien for any assessment shall be instituted within six years after the
assessment became due; provided that if the owner of a unit subject to a lien
of the association files a petition for relief under the United States
Bankruptcy Code (11 U.S.C. §101 et
seq.), the period of time for instituting proceedings to enforce the
association's lien shall be tolled until thirty days after the automatic stay
of proceedings under section 362 of the United States Bankruptcy Code (11
U.S.C. §362) is lifted.
The lien of the association may be foreclosed by
action or by nonjudicial or power of sale foreclosure [procedures set forth
in chapter 667,] by the managing agent or board, acting on behalf of the
association and in the name of the association[;]. The governing documents of every association
shall be deemed to include a power of sale provision, sufficient to enable the
exercise of a nonjudicial foreclosure remedy, regardless of the presence or
absence of power of sale language in an association's governing documents. The foregoing remedies may be completed using
procedures set forth in chapter 667; provided that no association may exercise the
nonjudicial or power of sale remedies provided in [chapter 667] this
section to foreclose a lien against any unit that arises solely from fines,
penalties, legal fees, or late fees, and the foreclosure of any such lien shall
be filed in court pursuant to part IA of chapter 667.
In any such foreclosure, the unit owner shall be
required to pay a reasonable rental for the unit, if so provided in the bylaws
or the law, and the plaintiff in the foreclosure shall be entitled to the
appointment of a receiver to collect the rental owed by the unit owner or any
tenant of the unit. If the association
is the plaintiff, it may request that its managing agent be appointed as
receiver to collect the rent from the tenant.
The managing agent or board, acting on behalf of the association and in
the name of the association, unless prohibited by the declaration, may bid on
the unit at foreclosure sale, and acquire and hold, lease, mortgage, and convey
the unit. Action to recover a money
judgment for unpaid common expenses shall be maintainable without foreclosing
or waiving the lien securing the unpaid common expenses owed."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Condominiums; Associations; Nonjudicial Foreclosure Remedy
Description:
Clarifies that a condominium association may exercise nonjudicial or power of sale foreclosure remedies regardless of the presence or absence of power of sale language in an associations governing documents.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
