New Bankruptcy Bill Introduced in Senate

Jonathan Alper, Esq. reported in his Florida Asset Protection Blog that a new bankrputcy bill was introduced in the U.S. Senate. He states, "Senator Grassley (R-Iowa) introduced a bill which makes it more difficult for debtors to file Chapter 7 bankruptcy. The bill aims to cut down on abusive and frivolous bankruptcy filing. Its principal change is a "means test" for people wanting to file Chapter 7 bankruptcy. People who earn less than the median income in their state are exempt from means testing. Click here to read more.

The bill also contains language that I assisted in drafting while Chair of Community Associations Institute's Government and Public Affairs Council. CAI has been trying to add this language to the bankruptcy code for several years. The language would clarify that community associations, including homeowner associations and commercial condominiums are entitled to post-petition assessments as long as they own the property. Specifically, it would expand the bankruptcy exemption contained in 11 U.S.C. 523(a)(16) to read as follows:

for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership, in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or posessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case. . . .

This change is important because community associations debtors should pay their fair share of the common expenses of the community they belong to at least for assessments incurred after they filed for bankruptcy. If debtors do not pay their fair share, it means that all of the other owners in the community must make up the difference.

Recodification Bill Hearing

There is a hearing on Tuesday, March 1, 2005 at 9:30 a.m. in room 211 on some bills of interest to community associations before the Senate Ways & Means Committee before chair Sen. Brian T. Taniguchi. The hearing notice discusses the following bills of interest to community associations:

SB 1132 SD1 This is the second part of the Recodification. Although there are issues with the Recodification, it is better than the current law.

ONLY WRITTEN COMMENTS SHOULD BE SUBMITTED, NO ORAL TESTIMONY WILL BE ACCEPTED.

Persons wishing to submit written comments should submit 35 copies of their comments to the committee clerk, Room 210, State Capitol during regular business hours, or outside the Senate Sergeant-at-Arms Office, Room 015, State Capitol for all other times, 24 hours prior to the hearing. Comments may also be faxed if less than 5 pages in length, to the Senate Sergeant-At-Arms Office at 586-6659 or 1-800-586-6659 (toll free for neighbor islands), at least 24 hours prior to the hearing. When faxing, please indicate that the comments are to be submitted for this particular decision making and the required number of copies needed for submittal.

Condo Court Bill Set for Hearing

There is a hearing on Tuesday, March 1, 2005 at 9:00 a.m. in room 229 on some bills of interest to community associations before the Senate Judiciary Committee before chair Sen. Colleen Hanabusa. The hearing notice discusses the following bills of interest to community associations:

SB 1345 This bill would expand the scope of the pilot condo court law to any matter that is subject to mediation. While I believe that the condo court pilot project should be expanded, the proposed expansion is over broad. It is hoped that an expanded pilot project would allow a realistic evaluation of an administrative process for condominium associations. One possible outcome might be a reduction in the number of bills each year seeking to further limit the ability of Hawaii condominium associations to self-govern. I believe that the original pilot project was so restrictive that no cases would be heard and it would not be possible to evaluate the program. In fact, that has turned out to be the case. No one has filed any cases under the pilot project.

However, the proposed bill goes too far in the other direction. It covers any matter that may be mediated. Effectively, it covers any disputes at all. The expansion overload the limited ability to the administrative hearings office to handle cases. More importantly, the expansion would include questions of interpretation of the Association's Declaration, By-Laws and House Rules. While it is reasonable for an administrative law judge to be familiar with the Hawaii Condo Law, it is not reasonable for them to be conversant with the multitude of different condominium documents used throughout the State.

In addition, exceptions for the removal of directors (HRS 514A-82(b)(1)), the amendment of the By-Laws (HRS 514A-82(b)(2)), non-judicial foreclosure of association liens (514A-82(b)(13)), and pets to the extent that they involve fair housing (HRS 514A-82.5 & 82.6) are not appropriate for Condo Court. If the removal of directors or an amendment to the By-Laws are being challenged that is something so serious that the courts need to be involved. The foreclosure of association liens should be handled as provided by Hawaii Condo Law. If the owner pays the delinquency subject to challenge, the owner is able to bring an action in small claims court or force mediation. Finally, if there is a claim involving a pet that raises Federal or State Fair Housing concerns, they should be addressed pursuant to Federal and State law. It is doubtful whether the state law could supercede the Federal Fair Housing Act.

Persons wishing to testify should submit 25 copies of their testimony, three-hole punched, to the committee clerk, Room 227, State Capitol, 24 hours prior to the hearing. Testimony may also be faxed if less than 5 pages in length, to the Senate Sergeant-At-Arms Office at 586-6659 or 1-800-586-6659 (toll free for neighbor islands), at least 24 hours prior to the hearing. When faxing, please indicate to whom the testimony is being submitted, the date and time of the hearing, and the required number of copies needed for submittal.

Cumulative Voting for Incorporated Community Associations

A few years ago, the legislature adopted a law that governs the operation of nonprofit corporations that are incorporated. The law modifies the way that incorporated associations handle cumulative voting. Under Hawaii nonprofit corporation law, the following must happen before cumulative voting will be permitted at a community association's election. The law for cumulative voting for nonprofit corporations requires all three of the following things before cumulative voting is allowed:

1.   Cumulative voting must be authorized by the association's Articles of Incorporation or By-Laws;
2.   The notice of the association's meeting (or a statement accompanying the notice) must state that cumulative voting will take place; and
3.   A member must give notice of intent to cumulatively vote at least 48 hours before the meeting or such longer period provided in the By-Laws.

The Hawaii law is based on the Model Nonprofit Corporation Act. The reason for these provisions in the Model Nonprofit Corporation Act is that cumulative voting deprives the rights of a majority of the owners. Cumulative voting allows a minority to elect a director even though the majority would prefer another candidate. Since it is contrary to the rights of the majority, the Hawaii Nonprofit Corporation Act requires notice be given and a member request the cumulative voting. There were probably some other policy concerns about cumulative voting. The average member does not understand how cumulative voting works. Since only a few people understand the process and the way it can be used to maximum effect, it's antidemocratic effect is even more pronounced. In addition, there was also the practical recognition that if someone didn't request cumulative voting, the corporation should have to go through the process of voting cumulatively.

As a result of this law, we recommend that all incorporated community associations other than condominiums to include the following language in their notice of meeting at which directors are to be elected if their By-Laws or Articles of Incorporation permit cumulative voting

Article ____, Section _____ of the Association's By-Laws states that the election of directors shall be by cumulative voting. Hawaii Revised Statutes Section 414D-114 states that if the By-Laws authorizes cumulative voting by the members, cumulative voting will be permitted only if a member gives notice of intent to cumulatively vote not less than 48 hours before the meeting. Accordingly, unless notice is given within the time period mandated by the statute, cumulative voting will not be permitted.

After the notice of the meeting is distributed to the members, any member, including any board member may provide notice of intent to cumulatively vote.

In 2005, the cumulative voting provisions of the Nonprofit Corporation were partially superceeded for condominium associations only. For condominium associations (including incorporated condominium associations) owners holding more than 50% of the common interest in the condominium can remove any director at a meeting regardless of the provisions of the association's By-Laws. The percentage would not change depending on whether cumulative voting was used to elect the director. If the By-Laws provide for cumulative voting by the owners, the owners may so vote if an owner gives notice of the owner's intent to cumulatively vote before voting commences.

Revised August 14, 2005: This article was revised to incorporate the effect of Act 155 which adopted special rules for cumulative voting of condominium associations .

House Finance Committee Hearing

There is a hearing on Friday, February 25, 2005 at 9:00 a.m. in room 229 on some bills of interest to community associations before the House Finance Committee before chair Rep. Dwight Y. Takamine. The hearing notice discusses the following bills of interest to community associations:

HB 59 This bill would eliminate the repeal date for the provisions relating to family child care homes in condominium associations and community associations. In 1999, a law was adopted which permitted family child care homes in associations provided that certain protections for the associations were met. The 1999 law had a provision that the law would automatically lapse on June 30, 2005. The bill would eliminate the automatic repeal provision.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 45 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) ROOM 306, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

Senate Judiciary Committee Hearing

There is a hearing on Friday, February 25, 2005 at 9:00 a.m. in room 229 on some bills of interest to community associations before the Senate Judiciary Committee before chair Sen. Colleen Hanabusa. The hearing notice discusses the following bills of interest to community associations:

SB 1210 This bill would eliminate the repeal date for the provisions relating to family child care homes in condominium associations and community associations. In 1999, a law was adopted which permitted family child care homes in associations provided that certain protections for the associations were met. The 1999 law had a provision that the law would automatically lapse on June 30, 2005. The bill would eliminate the automatic repeal provision.

Persons wishing to testify should submit 25 copies of their testimony, three-hole punched, to the committee clerk, Room 227, State Capitol, 24 hours prior to the hearing. Testimony may also be faxed if less than 5 pages in length, to the Senate Sergeant-At-Arms Office at 586-6659 or 1-800-586-6659 (toll free for neighbor islands), at least 24 hours prior to the hearing. When faxing, please indicate to whom the testimony is being submitted, the date and time of the hearing, and the required number of copies needed for submittal.

House Finance Committee Hearing

There is a hearing on Friday, February 25, 2005 at 3:30 p.m. in room 308 on some bills of interest to community associations before the House Finance Committee before chair Rep. Dwight Y. Takamine. The hearing notice discusses the following bills of interest to community associations:

HB 1017 This bill would require townhouse associations to permit solar energy devices and require the association to adopt rules regarding the placement of solar energy devices. The proposed law is probably unconstitutional as the U.S. Supreme Court has ruled in a similar situation that any physical taking of real property under laws of this type requires just compensation. The common elements in a condominium are jointly owned by all the members of a condominium and the roof of a townhouse is normally a common element. The proponents of this bill fail to understand that the roof that they want to use is not owned by the owner of the unit, but owned by all the members of the condominium. The bill also has practical problems. It does not address the common situation where the Association's roof warranty may be voided by the penetration of pipes through the roof.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 45 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) ROOM 306, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

House Finance Committee Hearing

There is a hearing on Friday, February 25, 2005 at 12:15 p.m. in room 308 on some bills of interest to community associations before the House Finance Committee before chair Rep. Dwight Y. Takamine. The hearing notice discusses the following bills of interest to community associations:

HB 1554 This bill would exempt from taxation seventy-five per cent of income received from the sale to a lessee of the leased fee interest in a residential house lot or multi-family residential leasehold property, or to the association of apartment owners of the multi-family residential leasehold building. Since Honolulu repealed Chapter 38 providing for mandatory conversion of the leased fee interest in condominiums and residential cooperatives, the tax incentive would be a welcome change to the law which may remove one reason a lessor may be unwilling to sell the leased fee interest to the lessees.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 45 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) ROOM 306, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

What is the process for amendment of condominium governing documents?

Under Hawaii Condo Law, an amendment to the governing documents must be submitted to the owners for approval. An amendment to the Declaration will require the approval of owners holding at least 75% of the common interest in the Project unless the project has five or fewer apartments. In these smaller projects, the Declaration may have a higher owner approval requirement for amendments. Under Hawaii Condo Law, an amendment to the By-Laws will require approval of owners holding at least 65% of the common interest in the Project. The owner approval for an amendment may occur at a meeting of the members or by written consent. The written consent is normally a ballot that is mailed to the members with a text of the proposed amendments and cover letter. The Recodification, if applicable to your condominium will change the approval requirements for amendments to Declarations and By-Laws to 67%.

After the amendment has been approved by the owners, the amendment must be recorded in the Bureau of Conveyances or filed with the Office of the Assistant Registrar of the Land Court. The amendment is not effective until it has been recorded or filed. After the amendment has been recorded, the normal practice is to mail out copies of the amendment to all the owners of the condominium association.

There are certain amendments that are either not permitted or would require 100% approval of the owners. For instance, changing a common element into a limited common element or part of an apartment would require approval of 100% of the owners. Judges have also ruled that changing the way maintenance fees are assessed requires approval of 100% of the owners.

House Judiciary Committee Hearing

There is a hearing on Thursday, February 24, 2005 at 2:00 p.m. in room 325 on some bills of interest to community associations before the House Judiciary Committee before chair Rep. Sylvia J. Luke. The hearing notice discusses the following bills of interest to community associations:

HB1715 This bill adds sexual orientation and gender identity to the category of protected classifications in the residential real property transactions. Sexual orientation is currently a protected classification under the State fair employment laws. The bill would mean that Hawaii condo associations would be subject to claims for discrimination on the basis of sexual orientation or gender identity.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 35 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) THE COMMITTEE'S VICE CHAIR IN ROOM 422, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

House Judiciary Committee Hearing

There is a hearing on Tuesday, February 22, 2005 at 2:00 p.m. in room 325 on some bills of interest to community associations before the House Judiciary Committee before chair Rep. Sylvia J. Luke. The hearing notice discusses the following bills of interest to community associations:

HB 783 This bill would repeal the 1874 nonjudicial (power of sale) foreclosure law and amend the 1998 alternate power of sale foreclosure process by allowing all mortgages to be foreclosed through the process, capping the public sale purchaser's downpayment to not more than 10 percent of the highest successful bid, removing the requirement that the borrower sign the conveyance document, and clarifying that the new property owner may take possession no sooner than 45 days after the public sale. Effective July 1, 2099. The bill is an improvement because the 1874 law does not contain consumer protections. The 1998 law was never used because no one would use the law because they couldn't rely on the borrower to sign the conveyance document after the foreclosure. The bill also adds the additional consumer protection that a 10% downpayment thereby insuring that more people would bid on the property.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 35 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) THE COMMITTEE'S VICE CHAIR IN ROOM 422, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

Senate Commerce, Consumer Protection and Housing Committee Hearing

There is a hearing on Wednesday, February 23, 2005 at 9:00 a.m. in room 016 on some bills of interest to community associations before the House Consumer Protection Committee before chair Sen. Ron Menor. The hearing notice discusses the following bills of interest to community associations:

SB 1798 This bill would eliminate condominium associations from the coverage of the cumulative voting sections of the nonprofit corporation act. There really is no reason to treat condominiums differently from other nonprofit corporations. The nonprofit corporation act recognizes that cumulative voting takes away power from the majority. As a result, the law requires that notice be given and a member request cumulative voting before it be applied.

SB 1137 This bill would eliminate the prohibition on purchasing CDs through a securities broker from the Recodification. The prohibition was added at the last minute and would make most associations immediately in violation of the law upon the effective date of the Recodification. there is no good reason for associations to be limited in the ways it acquires its federally insured investments.

SB 767 This bill would eliminate another last minute amendment to the Recodification. It would allow condominium associations to acquire CDs from out of state banks, savings and loans and credit unions. Many condominium associations have funds that exceed the $100,000.00 federal maximum for insurance. The prohibition effectively means that condominium associations would have funds in unsafe investments.

SB 1344 This bill would include a provision that the managing agent contract would be available to members of condominium associations. The Recodification was intended to simplify the Hawaii condominium law. This bill is unnecessary and simply makes the law more complicated and longer. It also raises the issue whether other contracts might not be included in the list of documents members are entitled to review.

SB 1349 This bill would change the law so that associations would need to make 5 years of financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices available to its members rather than 2 years. I have concerns about this bill because it attempts to micromanage condominium associations. What many people misunderstand is that there is a cost to keeping records and there does not appear to be a good reason to require that 5 years of documents be maintained and made available to members.

SB 1348 This bill requires that board of director minutes for the current and prior year be made available at no cost or on 24 hour loan to all members at the resident manager's office. Currently, only the current minutes are available at no cost or 24 hour loan. The other minutes for the current and prior year are available for review at a convenient location designated by the Board (usually the managing agent's office). I have concerns about the bill because it micromanages condominium associations. The Association is free to make the documents available on site, but many associations have few or no onsite members.


Persons wishing to testify should submit 25 copies of their testimony to the committee clerk, Room 219, State Capitol, 24 hours prior to the hearing. Testimony may also be faxed if less than 5 pages in length, to the Senate Sergeant-At-Arms Office at 586-6659 or 1-800-586-6659 (toll free for neighbor islands), at least 24 hours prior to the hearing. When faxing, please indicate to whom the testimony is being submitted, the date and time of the hearing, and the required number of copies needed for submittal.

House Consumer Protection Committee Hearing

There is a hearing on Wednesday, February 23, 2005 at 2:00 p.m. in room 325 on some bills of interest to community associations before the House Consumer Protection Committee before chair Rep. Kenneth T. Hiraki. The hearing notice discusses the following bills of interest to community associations:

HB 973 This bill would require that if the managing agent desires to lease part of the property being managed, the managing agent would be required to hire an appraiser to determine the fair market lease rent. It also prohibits the managing agent from hiring any employee of the Association. The bill also requires the developer or board to consider at least two bids prior to executing a contract with a managing agent. I have concerns about the bill because it involves micromanagement of condominium associations. Most people are aware of the going lease rent, particularly if other property is being rented by the Association. Requiring an appraisal will simply add an additional cost lowering the amount a tenant would be willing to pay. As far as hiring an employee of the Association, there are also instances where an association does not need a full time employee and it makes sense for the Association to share an employee with the managing agent. Requiring multiple bids probably does not make sense particularly in situations where the Association is happy with the services of a current managing agent and decides to renew the contract. In any event, that is a business decision that should be made by the Association.

PERSONS WISHING TO TESTIFY ARE REQUESTED TO SUBMIT 35 COPIES OF THEIR TESTIMONY AT LEAST 24 HOURS PRIOR TO THE HEARING TO: (1) THE COMMITTEE'S VICE CHAIR IN ROOM 425, STATE CAPITOL, OR (2) THE HOUSE SGT.-AT-ARMS TESTIMONY DROP OFF BOX IN THE TURNAROUND AREA OF THE CAPITOL BASEMENT PARKING LOT. TESTIMONY MAY ALSO BE FAXED IF LESS THAN 5 PAGES IN LENGTH TO THE HOUSE SGT.-AT-ARMS OFFICE AT: 586-6501 (OAHU) OR 1-800-535-3859 (NEIGHBOR ISLANDS). WHEN FAXING, PLEASE INDICATE TO WHOM THE TESTIMONY IS BEING SUBMITTED, THE DATE AND TIME OF THE HEARING, AND THE REQUIRED NO. OF COPIES THAT IS NEEDED FOR SUBMITTAL.

Where can I read more about architectural review?

Byron R. Hanke and I wrote a book called, Design Review: How Community Associations Maintain Peace & Harmony. Amazon CAI

The book is a short description of the architectural review process in layman's terms. It covers design review authority, guidelines &procedures, facilitating compliance, and how Federal laws affecting design review. I should mention that the authors do not receive any royalties and the proceeds from the book go to the Community Associations Institute.

What is Design Review?

Design review is the process by which a community association regulates the overall appearance of the Project. The purpose of design review is to maintain, protect and enhance property values and to regulate changes which are otherwise detrimental to the community.

What is the Federal Fair Housing Act?

The Federal Fair Housing Act was adopted in 1968 as Title VIII of the Civil Rights Act of 1968. In 1988, Congress expanded the scope of the Federal Fair Housing Act by adopting the Federal Fair Housing Amendments Act of 1988. The Federal Fair Housing Amendments Act established new enforcement procedures and created two new protected classifications. The Federal Fair Housing Act protects individuals from housing discrimination on the basis of race, color, religion, sex, familial status, disability, or national origin. These categories are known as "Protected Classes". In addition, the Hawaii State Fair Housing Act adds the classification of age and marital status to the Protected Classes.

Familial Status Discrimination

What is Familial Status Discrimination? The Federal Fair Housing Act introduced “familial status discrimination” in 1988. Lawmakers chose to use the term "familial status discrimination” rather than the more easily understood term “discrimination against families with minor children”. Under the Federal Fair Housing Act, it is illegal to discriminate against families with minor children in housing.

What are community associations?

Community Associations refers to the organizations that manage and operate common property for the owners of a condominium, planned community and residential cooperative. In Hawaii, condominiums are governed by Hawaii Revised Statutes Chapter 514A. Condominiums are the most common for of community association in Hawaii. In a condominium, all the members own the common areas jointly while each member owns their own apartment.

Planned Communities are governed by Hawaii Revised Statutes Chapter 421J. In Planned Communities, the association is normally a Nonprofit Corporation and the corporation owns the common property. Each of the members own their lots.

Residential cooperatives are normally governed by Hawaii Revised Statutes Chapter 421I. In a residential cooperative, the cooperative is normally a corporation that owns or leases the Project. Each shareholder has the right to lease or sublease an apartment from the cooperative.

Recodification of Condominium Property Act

The 2004 legislature has adopted part of a new Condominium Property Act with an effective date of July 1, 2005. The amendment is substantial and is often referred to as the Recodification of the Condominium Property Act. The new Condominium Property Act is contingent upon the legislature’s adoption of the second half of the Recodification relating to development and sale of condominiums. The 2005 legislature adopted and the Governor signed the second part of the new Condominium Act. The effective date of the Recodification has been delayed until July 1, 2006. The Recodification is contained in Hawaii Revised Statutes Chapter 514B.

Revised 6/23/2005 to reflect adoption of the second part of the Recodification and delayed effective date.

Revised 12/7/2005 to provide the new HRS Chapter Designation and the link for the Recodification at the Hawaii State Legislature.