Can a Hawaii HOA Foreclose Over Dues?

Unpaid assessments in Hawaii are not just a private debt — for condominiums, the Condominium Property Act gives the association a lien, and a way to recover up to six months of recent assessments from whoever takes the unit at a foreclosure sale. For planned communities, the recorded declaration usually controls. For your specific situation, a licensed Hawaii attorney is the right resource. This is general information, not legal advice.

Condominiums: the lien and its priority — HRS § 514B-146

For condominiums, § 514B-146(a) makes unpaid common-expense assessments "a lien on the unit with priority over all other liens," but with two key exceptions: liens for real property taxes and government assessments, and "all sums unpaid on any mortgage of record that was recorded before the recordation of a notice of a lien by the association." So a first mortgage recorded before the association's lien generally keeps its senior position — the assessment lien does not prime an earlier first mortgage.

Hawaii's six-month feature works differently from the "super-priority" lien some states have. Under § 514B-146(j)–(k), when a mortgagee or other purchaser takes a delinquent unit through a judicial or nonjudicial foreclosure, the association may levy a special assessment against that purchaser for up to six months of unpaid regular monthly common assessments. By statute that figure excludes late charges, fines, penalties, interest, and any collection or attorney's fees. So the association recovers a capped slice of recent assessments from whoever ends up with the unit — rather than leapfrogging the first mortgage itself.

The limit matters: only the regular assessments count toward that six-month figure. Fines and fees, even if unpaid, are excluded.

How a condo lien is foreclosed

The association may foreclose "judicially or nonjudicially … whether or not the association's governing documents contain power of sale language." There is an important exception, though: under § 514B-146, an association may not use the nonjudicial / power-of-sale route to foreclose a lien that "arises solely from fines, penalties, legal fees, or late fees" — the foreclosure of such a lien "shall be filed in court pursuant to part IA of chapter 667." So the faster nonjudicial process is available for unpaid regular assessments, but a fines-only lien has to go through a court. After a foreclosure, the law also caps a related special assessment at "the total amount of unpaid regular monthly common assessments that were assessed during the six months immediately preceding" the completed sale. Because the process can move nonjudicially and on fixed timelines, the steps and dates matter. A licensed Hawaii attorney can explain the timeline in a specific case.

Planned communities: the declaration controls

For a planned community under Chapter 421J, there is no statutory six-month special-assessment recovery like the condominium one. Whether — and how — the association can lien and foreclose depends largely on the recorded declaration. Reading the declaration is the only way to know what applies, and a licensed Hawaii attorney can do that with you.

What people generally do

In a Hawaii assessment-debt situation, a few points commonly matter:

• The association's records and a payoff figure show what is owed — and how much is regular assessments versus fines and fees.
• Disputed fines and regular assessments are treated separately, since only regular assessments count toward the six-month special assessment.
• The foreclosure notices and their deadlines matter, since Hawaii allows a nonjudicial sale for unpaid assessments (a fines-only lien, by contrast, must go through court).
• Mediation and the state's other dispute-resolution options exist before a sale.
• A licensed Hawaii attorney is the resource early, while options remain open.

Sources

• HRS § 514B-146 — Lien for assessments
• HRS § 514B-104 — Association; powers (fines)
• HRS Chapter 421J — Planned Community Associations