THE SENATE

S.B. NO.

1263

TWENTY-NINTH LEGISLATURE, 2017

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO REAL ESTATE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that some owners in condominiums and time share projects have experienced difficulties receiving association-related documents in a timely manner.

     The purpose of this Act is to:

     (1)  Specify that the principal broker in a brokerage firm is responsible for ensuring that:

          (A)  Associated real estate licensees and other staff who assist common interest communities are responsive to requests from owners regarding association-related finances, documents, records, and information; and

          (B)  Any request from the real estate commission to distribute commission-generated information, materials, or documents to an association, a board of directors, or a unit owner in a common interest community is completed within ten days after receiving the request; and

     (2)  Clarify that any violation of a mandatory provision of the State's condominium law by a board or its officers and members is a per se violation of the board's fiduciary duty, but providing a safe harbor provision for a board member who votes for compliance during a board meeting.

     SECTION 2.  Section 467-1.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The principal broker shall be responsible for:

     (1)  The client trust accounts, disbursements from those accounts, and the brokerage firm's accounting practices;

     (2)  The brokerage firm's records, contracts, and documents;

     (3)  All real estate contracts of the brokerage firm and its handling by the associated real estate salesperson;

     (4)  The proper handling of any commission application, real estate license application, or renewal application that the principal broker or the brokerage firm expressly agrees to handle on behalf of the applicant, including without limitation, verifying for completeness and appropriate fees, and mailing or delivering the appropriate documents to the commission by the required deadline;

     (5)  Developing policies and procedures for the brokerage firm concerning the handling of real estate transactions and the conduct of the associated real estate licensees and other staff, including education and enforcement of the policies and procedures;

     (6)  Setting a policy on continuing education requirements for all associated real estate licensees in compliance with the statutory requirement;

     (7)  Ensuring that the licenses of all associated real estate licensees and the brokerage firm license are current and active;

     (8)  Establishing and maintaining a training program for all associated real estate licensees; [and]

     (9)  Ensuring that all associated real estate licensees are provided information and training on the latest amendments to real estate licensing laws and rules as well as other related laws and rules[.];

    (10)  Ensuring that all associated real estate licensees and other staff who assist in providing management services for common interest communities, including but not limited to cooperative housing corporations under chapter 421I, planned community associations under chapter 421J, associations of unit owners under chapter 514B, and time sharing plans under chapter 514E, are responsive to requests for finances, documents, records, and information, whether maintained, kept, or required to be provided pursuant to chapter 421I, 421J, 514B, or 514E; and

    (11)  Ensuring that any request from the commission to distribute any commission-generated information, printed material, or documents to an association, the board of directors of an association, or unit owners, shall be completed within ten days of receiving the request."

     SECTION 3.  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.  A violation of any mandatory provision of this chapter by a board or its officers and members shall be deemed a per se violation of the fiduciary duty owed pursuant to this subsection; provided that a board member may avoid liability under this subsection by voting against a board action that is in violation of a mandatory provision of this chapter and having that board member's vote recorded in the minutes of a regular or special meeting of the board within forty-five days of the occurrence of the violation."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

 


 


 

Report Title:

Real Estate Licensees; Common Interest Communities; Principal Brokers; Documents, Records, and Information; Real Estate Commission; Board of Directors; Fiduciary Duty

 

Description:

Requires principal brokers in a brokerage firm to ensure that:  associated real estate licensees and other staff who assist in providing management services for common interest communities are responsive to requests from owners regarding association-related finances, documents, records, and information; and any request from the real estate commission to distribute commission-generated information, materials, or documents to an association, a board of directors, or a unit owner in a common interest community is completed within ten days after receiving the request.  Clarifies that any violation of a mandatory provision of the State's condominium law by a board or its officers and members is a per se violation of the board's fiduciary duty.  Provides safe harbor for a board member who votes for compliance during a board meeting.  (SD1)

 

 

 

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