REPORT TITLE:
Condo; Tenants Fee Collection 

DESCRIPTION:
Allows association to collect from the tenant overdue maintenance
fees the apartment owner owes to the association.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           644
TWENTIETH LEGISLATURE, 1999                                
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:

 1      SECTION 1.  Section 514A-94, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§514A-94  Attorneys' fees, delinquent assessments, [and]
 
 4 expenses of enforcement[.], and fee collection from tenants.
 
 5 (a)  All costs and expenses, including reasonable attorneys'
 
 6 fees, incurred by or on behalf of the association for:
 
 7      (1)  Collecting any delinquent assessments against any
 
 8           owner's apartment;
 
 9      (2)  Foreclosing any lien thereon; or
 
10      (3)  Enforcing any provision of the declaration, bylaws,
 
11           house rules, and the Condominium Property Act; or the
 
12           rules of the real estate commission;
 
13 against an owner, occupant, tenant, employee of an owner, or any
 
14 other person who may in any manner use the property shall be
 
15 promptly paid on demand to the association by such person or
 
16 persons; provided that if the claims upon which the association
 
17 takes any action are not substantiated, all costs and expenses,
 
18 including reasonable attorneys' fees, incurred by any such person
 
19 or persons as a result of the action of the association, shall be
 

 
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 1 promptly paid on demand to such person or persons by the
 
 2 association.
 
 3      (b)  If any claim by an owner is substantiated in any action
 
 4 against an association, any of its officers or directors, or its
 
 5 board of directors to enforce any provision of the declaration,
 
 6 bylaws, house rules, or this chapter, then all reasonable and
 
 7 necessary expenses, costs, and attorneys' fees incurred by an
 
 8 owner shall be awarded to such owner; provided that no such award
 
 9 shall be made in any derivative action unless:
 
10      (1)  The owner first shall have demanded and allowed
 
11           reasonable time for the board of directors to pursue
 
12           such enforcement; or
 
13      (2)  The owner demonstrates to the satisfaction of the court
 
14           that a demand for enforcement made to the board of
 
15           directors would have been fruitless.
 
16      If any claim by an owner is not substantiated in any court
 
17 action against an association, any of its officers or directors,
 
18 or its board of directors to enforce any provision of the
 
19 declaration, bylaws, house rules, or this chapter, then all
 
20 reasonable and necessary expenses, costs, and attorneys' fees
 
21 incurred by an association shall be awarded to the association,
 
22 unless the action was filed in small claims court or prior to
 
23 filing the action in a higher court the owner has first submitted
 

 
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                                     S.B. NO.           644
                                                        
                                                        

 
 1 the claim to mediation, or to arbitration under part VII of this
 
 2 chapter, and made a good faith effort to resolve the dispute
 
 3 under any of those procedures.
 
 4      (c)  Anyone contracted by the association of apartment
 
 5 owners to collect delinquent assessments against any owner's
 
 6 apartment shall not share in any portion of any penalties or
 
 7 late charges collected. 
 
 8      (d)  If the owner of an apartment rents or leases the
 
 9 apartment and defaults for thirty days or more in the payment of
 
10 the apartment's share of the common expenses, the board, for as
 
11 long as the default continues, may demand and receive from any
 
12 tenant occupying the apartment, the rent due or becoming due
 
13 from the tenant to the apartment owner.  The board may demand
 
14 from the tenant an amount sufficient to pay all sums due from
 
15 the apartment owner to the association, including interest, if
 
16 any.  The tenant's payment of rent to the board shall discharge
 
17 the tenant from paying rent to the apartment owner, to the
 
18 extent of the amount paid to the board.  If the board makes a
 
19 demand upon the tenant pursuant to this section, the tenant may
 
20 not question the right of the board to make the demand.
 
21 Instead, the tenant shall make the payments demanded by the
 
22 board; provided that the board may not exercise this right if a
 
23 commissioner or receiver has been appointed to take charge of
 

 
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                                     S.B. NO.           644
                                                        
                                                        

 
 1 the premises pending a mortgage foreclosure or if a mortgagee is
 
 2 in possession pending a mortgage foreclosure.  Notwithstanding
 
 3 any other provision of this chapter, the vote or written consent
 
 4 of a majority of apartment owners shall be necessary to permit
 
 5 the board to take the actions authorized by this subsection."
 
 6      SECTION 2.  Statutory material to be repealed is bracketed.
 
 7 New statutory material is underscored.
 
 8      SECTION 3.  This Act shall take effect upon its approval.
 
 9 
 
10 INTRODUCED BY:  ______________________   ________________________