THE SENATE
S.B. NO.
2037
THIRTY-THIRD LEGISLATURE, 2026
S.D. 1
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-157, Hawaii Revised Statutes, is amended to read as follows:
"§514B-157 Attorneys' fees, delinquent assessments, and expenses of enforcement. (a) [[Struck through: All]] [Underlined: Except as provided in subsection (c), all] costs and expenses, including reasonable attorneys' fees, incurred by or on behalf of the association for:
(1) Collecting any delinquent assessments, including commercial property assessed financing assessments imposed pursuant to section 196-64.5, against any owner's unit;
(2) Foreclosing any lien thereon; or
(3) Enforcing any provision of the declaration, bylaws, house rules, and this chapter, or the rules of the real estate commission;
against [[Struck through: an]] [Underlined: a unit] owner, occupant, tenant, employee of [[Struck through: an]] [Underlined: a unit] owner, or any other person who may in any manner use the property, shall be promptly paid on demand to the association by the person or persons; provided that if the claims upon which the association takes any action are not substantiated, all costs and expenses, including reasonable attorneys' fees, incurred by any applicable person or persons as a result of the action of the association, shall be promptly paid on demand to the person or persons by the association.
(b) If any claim by [[Struck through: an]] [Underlined: a unit] owner is substantiated in any action against an association, any of its officers or directors, or its board to enforce any provision of the declaration, bylaws, house rules, or this chapter, then all reasonable and necessary expenses, costs, and attorneys' fees incurred by [[Struck through: an]] [Underlined: a unit] owner shall be awarded to [[Struck through: such]] [Underlined: the unit] owner; provided that no [[Struck through: such award]] [Underlined: expenses, costs, or fees] shall be [[Struck through: made]] [Underlined: awarded] in any derivative action unless:
(1) The [Underlined: unit] owner first shall have demanded and allowed reasonable time for the board to pursue [[Struck through: such]] enforcement; or
(2) The [Underlined: unit] owner demonstrates to the satisfaction of the court that a demand for enforcement made to the board would have been fruitless.
If any claim by [[Struck through: an]] [Underlined: a unit] owner is not substantiated in any court action against an association, any of its officers or directors, or its board to enforce any provision of the declaration, bylaws, house rules, or this chapter, then all reasonable and necessary expenses, costs, and attorneys' fees incurred by an association shall be awarded to the association, unless before filing the action in court the [Underlined: unit] owner has first submitted the claim to mediation, or to arbitration under subpart D, and made a good faith effort to resolve the dispute under any of those procedures.
[Underlined: (c) No attorneys' fees shall be charged by an association against any unit owner or tenant with respect to a fine unless the fine is deemed collectable. A fine shall be deemed collectable if:]
[Underlined: (1)] [Underlined: The time to initiate an appeal pursuant to the association's governing documents has expired and an appeal has not been initiated;]
[Underlined: (2)] [Underlined: The fine has been upheld following a timely appeal and a small claims court action has not been timely initiated; or]
[Underlined: (3)] [Underlined: A small claims court has not invalidated the fine within ninety days after timely initiation of a small claims court action.]"[Underlined: ]
SECTION 2. Section 514B-163, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) In any trial de novo demanded under this section, if the party demanding a trial de novo does not [[Struck through: prevail at trial,]] [Underlined: improve its position on the arbitration award by thirty per cent or more,] the party demanding the trial de novo shall be charged with all reasonable costs, expenses, and attorneys' fees of the trial. When there is more than one party on one or both sides of an action, or more than one issue in dispute, the court shall allocate its award of costs, expenses, and attorneys' fees among the prevailing parties and tax such fees against those nonprevailing parties who demanded a trial de novo in accordance with the principles of equity."
SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2050.
Report Title:
Condominiums; Arbitration; Fines; Attorneys' Fees; Trial de Novo
Description:
Prohibits condominium associations from charging unit owners attorneys' fees on fines unless deemed collectable. Allows a court to assess charges against a party requesting trial de novo if the requesting party fails to better its position by thirty per cent or more. Effective 7/1/2050. (SD1)
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