HOUSE OF REPRESENTATIVES
H.B. NO.
117
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
relating to condominiums.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 514B-106, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Except as provided in the declaration, the bylaws, subsection (b), or other provisions of this chapter, the board may act in all instances on behalf of the association. In the performance of their duties, officers and members of the board 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. Any violation by a board or its officers or members of the [Underlined: minimum replacement reserves fund balance required in section 514B-148(b) or the] mandatory provisions of section 514B-161 or 514B-162 may constitute a violation of the fiduciary duty owed pursuant to this subsection; provided that a board member may avoid liability under this subsection by indicating in writing the board member's disagreement with such board action or rescinding or withdrawing the violating conduct within forty-five days of the occurrence of the initial violation."
SECTION 2. Section 514B-148, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The association shall assess the unit owners to either fund a minimum of fifty per cent of the estimated replacement reserves assessments or fund one hundred per cent of the estimated replacement reserves assessments when using a cash flow plan; provided that [[Struck through: a]][Underlined: :]
[Underlined: (1)] [Underlined: The balance of the total replacement reserves fund shall be no less than per cent of the tax-assessed value of the project, unless the amount assessed by the association is sufficient to add at least per cent of the tax-assessed value of the project to the total replacement reserves fund in a calendar year; and]
[Underlined: (2)] [Underlined: A] new association need not collect estimated replacement reserves assessments until the fiscal year that begins after the association's first annual meeting.
For each fiscal year, the association shall collect the amount assessed to fund the estimated replacement reserves assessments for that fiscal year, as determined by the association's plan."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on September 1, 2025.
INTRODUCED BY:
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Report Title:
Condominium Associations; Condominium Boards; Fiduciary Duty; Replacement Reserves Funds; Minimum Balance
Description:
Provides that a condominium board's or its officer's or member's failure to maintain the minimum required balance for a condominium's replacement reserves fund may constitute a violation of the fiduciary duty owed. Establishes a minimum balance for a condominium association's replacement reserves fund, with an exception for sufficient assessments. Effective 9/1/2025.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.