STAND. COM. REP. NO. 701

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 104

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

     Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 104 entitled:

 

"A BILL FOR AN ACT RELATING TO CONDOMINIUM GOVERNING INSTRUMENTS,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to clarify the procedures to amend condominium association declarations, bylaws, and other governing instruments.

 

     Your Committee received testimony in support of this measure from the American Heart Association, Hawaii Public Health Institute, and two individuals.  Your Committee received testimony in opposition to this measure from the Hawaii State Association of Parliamentarians, Hawaii Council of Associations of Apartment Owners, Associa, Hui Oiaio, and thirteen individuals.  Your Committee received comments on this measure from one individual.

 

     Your Committee finds that under existing law, sixty-seven percent of all owners within a one-year time frame must vote in favor of a bylaw in order for it to pass.  However, bylaw amendments often fail because of poor ballot returns.  For example, your Committee has heard testimony that members of a condominium association have been repeatedly unable to amend their bylaws to pass non-smoking policies due to owner apathy or ballot non-return.  This measure attempts to address this issue by lowering the threshold for the vote required to change a condominium's governing documents.

 

     However, your Committee has heard testimony that lowering this threshold requirement could result in unintended consequences.  Your Committee notes that a condominium's declaration and bylaws function as the governing foundation for day to day life at condominiums.  Your Committee has heard the concerns that lowering the threshold to amend these documents could lead to instability within a condominium, especially if a proposed amendment to a governing document was of a material nature, or otherwise affected the viability or stability of a condominium association, such as amendments affecting voting rights, increases in assessments, responsibility for maintenance and repairs, or hazard and fidelity insurance requirements.  Your Committee understands these concerns and concludes amendments to this measure are necessary.

 

     Your Committee has amended this measure by:

 

     (1)  Clarifying that the procedures to amend condominium association declarations, bylaws, and other governing documents shall only apply to those proposed amendments that are not of a material adverse nature to condominium owners or do not imperil the viability or stability of the association;

 

     (2)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

 

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 104, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 104, S.D. 1, and be placed on the calendar for Third Reading.

 


Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

 

 

 

________________________________

ROSALYN H. BAKER, Chair