REPORT TITLE:
Condos; Maint. Fees; From Whom


DESCRIPTION:
Allows condominium associations to collect delinquent maintenance
fees from the tenant of the delinquent apartment owner after
notice to owner.  Allows tenant to deduct amount from rent owed
to landlord apartment owner.  Makes this requirement prevail in
event of conflict with Landlord-Tenant Code, except tenant can
offset amounts allowed thereunder.  Before using this method of
collection, board must adopt written policy that is approved by a
majority of apartment owners.  (HB648 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        648
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO CONDOMINIUM MAINTENANCE FEES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The payment of maintenance fees for common
 
 2 expenses is an integral part of condominium ownership.
 
 3 Unfortunately, some owners rent out their apartments and then
 
 4 fail to pay the maintenance fees, which breaches their contract
 
 5 with the association and is a hardship on the other owners.  The
 
 6 purpose of this Act is to permit the association to require
 
 7 payment of those fees from the delinquent owner's tenant, and
 
 8 allow the tenant to withhold that sum from the rent, as a method
 
 9 of obtaining the lawfully required maintenance fees.
 
10      SECTION 2.  Chapter 514A, Hawaii Revised Statutes, is
 
11 amended by adding a new section to be appropriately designated
 
12 and to read as follows:
 
13      "§514A-     Collection from tenants.  (a)  If the owner of
 
14 an apartment rents or leases the apartment and is in default for
 
15 thirty days or more in the payment of the apartment's share of
 
16 the common expenses, the board of directors, for as long as the
 
17 default continues, may demand in writing and receive each month
 
18 from any tenant occupying the apartment, an amount sufficient to
 
19 pay all sums due from the apartment owner to the association,
 
20 including interest, if any, but the amount shall not exceed the
 

 
Page 2                                                     648
                                     H.B. NO.           H.D. 1        
                                                        
                                                        

 
 1 tenant's rent due each month.  The tenant's payment under this
 
 2 section shall discharge that amount of payment from the tenant's
 
 3 rent obligation, and any contractual provision to the contrary
 
 4 shall be void as a matter of law.
 
 5      (b)  Prior to taking any action under this section, the
 
 6 board of directors shall give to the delinquent apartment owner
 
 7 written notice of its intent to collect the rent owed.  The
 
 8 notice shall:
 
 9      (1)  Be sent both by first-class and certified mail;
 
10      (2)  Set forth the exact amount the association claims is
 
11           due and owing by the apartment owner; and
 
12      (3)  Indicate the intent of the board of directors to
 
13           collect such amount from the rent, along with any other
 
14           amounts that become due and remain unpaid.
 
15      (c)  The apartment owner shall not take any retaliatory
 
16 action against the tenant for payments made under this section.
 
17      (d)  If the board makes a demand upon the tenant pursuant to
 
18 this section, the tenant shall make the payments demanded by the
 
19 board and the fact that the board made such a written demand is a
 
20 complete defense to an action for nonpayment of rent to the
 
21 extent of the amount demanded; provided that the board may not
 
22 exercise this right if:
 
23      (1)  A commissioner or receiver has been appointed to take
 
24           charge of the premises pending a mortgage foreclosure;
 

 
Page 3                                                     648
                                     H.B. NO.           H.D. 1        
                                                        
                                                        

 
 1      (2)  A mortgagee is in possession pending a mortgage
 
 2           foreclosure; or
 
 3      (3)  The tenant is served with a court order directing
 
 4           payment to a third party.
 
 5      (e)  In the event of any conflict between this section and
 
 6 any provision of chapter 521, this section shall control;
 
 7 provided that if the tenant is entitled to an offset of rent
 
 8 under chapter 521, the tenant may deduct the offset from the
 
 9 amount due to the association, up to the limits stated in chapter
 
10 521.  Nothing herein precludes the apartment owner or tenant from
 
11 seeking equitable relief from a court of competent jurisdiction
 
12 or seeking a judicial determination of the amount owed.
 
13      (f)  Before the board of directors may take the actions
 
14 permitted under subsection (a), the board must adopt a written
 
15 policy providing for the actions and have the policy approved by
 
16 a majority vote of the apartment owners at an annual or special
 
17 meeting of the association or by the written consent of a
 
18 majority of the apartment owners."
 
19      SECTION 3.  New statutory material is underscored.
 
20      SECTION 4.  This Act shall take effect upon its approval.