Which Hawaii Laws Govern Your HOA?

In Hawaii the first question is usually whether your community is a condominium or a planned community, because each is governed by a different chapter of the Hawaii Revised Statutes. For your specific situation, a licensed Hawaii attorney is the right resource. This is general information, not legal advice.

What law governs condos in Hawaii?

Primarily the Condominium Property Act, HRS Chapter 514B, which "applies to all condominiums created within this State" (§ 514B-21(a)), and its amendments reach older condominiums. Its management part (Part VI) does not apply, if the declaration or bylaws so provide, to an all-nonresidential condominium or one with no continuing development rights and no more than five units (§ 514B-101(b)).

Chapter 514B "may be cited as the Condominium Property Act" (§ 514B-1), and it "applies to all condominiums created within this State" (§ 514B-21(a)). Three coverage rules matter, especially for older buildings:

• Older condominiums are covered. "Amendments to this chapter apply to all condominiums, regardless of when the amendment is adopted" (§ 514B-21(a)). Older terms such as horizontal property regime, apartment, and association of apartment owners are read as condominium, unit, and association (§ 514B-21(b)).
• Pre-2006 documents can be updated. The documents of a condominium created before July 1, 2006 "may be amended to achieve any result permitted by this chapter," by "the vote or written consent of a majority of the unit owners" (§ 514B-23).
• A small-project exception. The chapter's management part (Part VI, which includes the fine, meeting, and records sections below) does not apply, "If so provided in the declaration or bylaws," to an all-nonresidential condominium or to one "not subject to any continuing development rights, containing no more than five units" (§ 514B-101(b)).

For the rest, Chapter 514B covers:

• Fines — the association may "levy reasonable fines for violations of the declaration, bylaws, rules, and regulations of the association," either under the bylaws or, if they are silent, under a board resolution establishing a fining procedure that "allows an appeal to the board of the fine with notice and an opportunity to be heard" (§ 514B-104(a)(11)).
• Board meetings — "All meetings of the board, other than executive sessions, shall be open to all members of the association," and "The board shall meet at least once a year" (§ 514B-125(a), (e)).
• Records — the most current financial statement is available "at no cost or on twenty-four-hour loan," approved board minutes for the current and prior year are available the same way or sent "within fifteen days of receipt of the request" (§ 514B-154(a)), and the documents listed in § 514B-154.5 "shall be provided no later than thirty days after receipt of a unit owner's or owner's authorized agent's written request" (§ 514B-154.5(c)).
• The assessment lien — after a foreclosure sale, the board may specially assess the buyer for unpaid regular assessments, capped at "the total amount of unpaid regular monthly common assessments that were assessed during the six months immediately preceding the completion of the judicial or nonjudicial power of sale foreclosure" (§ 514B-146(j), (k)).

Does Hawaii have an HOA law?

Yes. Planned communities are governed primarily by HRS Chapter 421J, which covers all planned community associations existing as of June 16, 1997 or created after (§ 421J-1). It excludes condominiums, cooperative housing corporations and time share plans; one qualifying path is an HOA of ten or more voting parcel owners whose unpaid assessments may become a lien (§ 421J-2).

Chapter 421J "shall apply to all planned community associations existing as of June 16, 1997 and all planned community associations created thereafter" (§ 421J-1). Its definition of a planned community excludes "a condominium or a cooperative housing corporation or a time share plan," so a community is under one chapter or the other (§ 421J-2). An association can be "a nonprofit, incorporated, or unincorporated organization," and one of the three ways to qualify is as a homeowners' association in which "The voting membership is made up of ten or more parcel owners" and unpaid assessments may become a lien (§ 421J-2).

Chapter 421J is shorter than 514B, but it sets the basics:

• Board meetings — meetings other than executive sessions "shall be open to all members to provide input on the matters being discussed," and "The board of directors shall meet at least once each year" (§ 421J-5(a), (b)). Meeting-notice rules are in § 421J-3.5.
• Records — association documents, the most current financial statement, and the latest board minutes "shall be made available for examination by any member at no cost, on twenty-four-hour loan or during reasonable hours" (§ 421J-7(a)).
• The assessment lien — its priority is "as provided in the association documents or, if no priority is provided in the association documents, by the recordation date of the liens" (§ 421J-10.5(a)), which is one reason the recorded declaration carries so much weight for planned communities.

The nonprofit corporation layer

The entity law is the Hawaii Nonprofit Corporations Act, HRS Chapter 414D (§ 414D-1). It "applies to all domestic corporations in existence on July 1, 2002, that were incorporated under any general statute of this State providing for incorporation of nonprofit corporations" (§ 414D-321). Its director standard calls for acting "In good faith" and "With the care an ordinarily prudent person in a like position would exercise under similar circumstances" (§ 414D-149(a)).

Chapter 514B borrows that standard directly for condominium boards: officers and directors "shall owe the association a fiduciary duty and exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 414D" (§ 514B-106(a)).

Dispute resolution options

Both chapters steer many disputes away from court first. For condominiums, when an owner pays a fine, § 514B-104(a)(11) gives the owner "the right to initiate a dispute resolution process as provided by sections 514B-161, 514B-162, or by filing a request for an administrative hearing under a pilot program administered by the department of commerce and consumer affairs." Mediation "shall be mandatory upon written request to the other party" for a dispute over "the interpretation or enforcement of the association's declaration, bylaws, or house rules" when the listed conditions are met (§ 514B-161(a)), and covered disputes "shall be submitted to arbitration" at the request of any party (§ 514B-162(a)). For planned communities, covered disputes "shall first be submitted to mediation" at the request of any party, with exceptions that include "Actions to collect assessments" (§ 421J-13). A licensed Hawaii attorney can advise which path fits a given dispute.

How the layers fit

1. The recorded governing documents — declaration, bylaws, and house rules.
2. The Condominium Property Act (HRS 514B) for condos — or HRS Chapter 421J for planned communities. If Chapter 421J conflicts with another law, "this chapter shall govern" (§ 421J-11).
3. The Hawaii Nonprofit Corporations Act (HRS 414D) for an incorporated association, and as the care-and-loyalty yardstick for condominium boards.
4. Federal law — the Fair Housing Act, ADA, Servicemembers Civil Relief Act, OTARD, and the Freedom to Display the American Flag Act.

From records to fines to the assessment lien, identifying your chapter is where most Hawaii homeowner questions begin.

Sources

• HRS Chapter 514B — Condominiums
• HRS § 514B-21 — Applicability
• HRS § 514B-23 — Amendments to governing instruments
• HRS § 514B-101 — Applicability of Part VI; exceptions
• HRS § 514B-104 — Association powers
• HRS § 514B-106 — Board powers and duties
• HRS § 514B-125 — Board meetings
• HRS § 514B-146 — Lien for assessments
• HRS § 514B-154 — Association records
• HRS § 514B-154.5 — Association documents to be provided
• HRS § 514B-161 — Mediation
• HRS § 514B-162 — Arbitration
• HRS Chapter 421J — Planned Community Associations
• HRS § 421J-1 — Scope
• HRS § 421J-2 — Definitions
• HRS § 421J-5 — Board meetings
• HRS § 421J-7 — Documents of the association
• HRS § 421J-10.5 — Lien for assessments
• HRS § 421J-11 — Applicability of other laws
• HRS § 421J-13 — Mediation of disputes
• HRS § 414D-1 — Short title (Hawaii Nonprofit Corporations Act)
• HRS § 414D-149 — General standards for directors
• HRS § 414D-321 — Application to existing domestic corporations