WHEREAS, in 1961, Hawaii became the first state to enact law enabling the creation of condominiums; and

WHEREAS, throughout the years, the Legislature has made many efforts to address a multitude of problems relating to condominiums, including the manner in which they are governed and providing for alternative dispute resolution mechanisms; and

WHEREAS, in 1988, the Legislature adopted Senate Concurrent Resolution No. 100, S.D. 1, H.D. 1, which requested the Legislative Reference Bureau to conduct an interim study of various problems concerning the governance of condominiums and, if appropriate, to propose feasible means and methods of dealing more effectively with those issues; and

WHEREAS, in its 1989 study, entitled Condominium Governance-an Examination of Some Issues, the Legislative Reference Bureau focused on the issues of informed boards and owners, access to information and decision-making concerning condominium management and operations, and financial issues relating to condominium management and operations; and

WHEREAS, in Act 213, Session Laws of Hawaii 2000, upon finding that Hawaii's condominium property regimes law micromanaged condominium associations and was unorganized, inconsistent, and obsolete in some areas, the Legislature directed the Real Estate Commission to conduct a review of the law and to make recommendations for recodification; and

WHEREAS, based upon the Real Estate Commission's Final Report to the Legislature, Recodification of Chapter 514A, Hawaii Revised Statutes (Condominium Property Regimes), the Legislature enacted chapter 514B, Hawaii Revised Statutes, known as the Condominium Property Act; and

WHEREAS, one of the fundamental principles of Hawaii's current condominium law is self-governance by the condominium community and minimal government involvement; and

WHEREAS, there are conflicting reports regarding the efficacy of Hawaii's current self-governance model for condominiums; and

WHEREAS, the Real Estate Commission reports that, for the majority of condominium unit owners, the State's current self-governance model is working as intended; and

WHEREAS, conversely, the Real Estate Commission also receives reports from condominium unit owners that the State's current self-governance model has resulted in: an inability to elect board members, amend favorable declaration and bylaw provisions, change the condominium managing agent, and mediate disputes; and increasing expenses for unit owners, including attorneys' fees to resolve conflicts with the board or other unit owners; and

WHEREAS, in senior living condominiums, where persons must be a minimum age in order to purchase a unit, governance issues arise when board members become infirm or experience diminished mental capacity; and

WHEREAS, these unresolved issues over governance and dispute resolution mechanisms result in diminishing the quality of life for condominium residents and may contribute to higher maintenance costs to unit owners; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2015, the House of Representatives concurring, that the Legislative Reference Bureau is requested to study issues relating to self-governance and dispute resolution under Hawaii's current condominium law; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau, to the extent feasible, is requested to:

(1) Examine governance models utilized by select states that have a large number of condominium units, including Florida and California;

(2) Examine past efforts to address problems relating to Hawaii's condominium law;

(3) Identify governance provisions of Hawaii's current condominium law that are effective and those that are not effective, particularly with respect to senior living condominiums or condominiums located in urban areas; and

(4) Examine the adequacy of the dissemination of information concerning condominium management and operations to condominium unit owners; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to recommend amendments to Hawaii's condominium law to address those provisions identified as ineffective; and

BE IT FURTHER RESOLVED that the Real Estate Commission is requested to provide cooperation and any assistance and information the Legislative Reference Bureau may require to complete the study in the timeframe provided; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is 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 2016; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of the Legislative Reference Bureau and the Chairperson of the Real Estate Commission.

Report Title:

Condominiums; LRB; Study

THE SENATE	S.C.R. NO.	111
TWENTY-EIGHTH LEGISLATURE, 2015		S.D. 1
STATE OF HAWAII