Condos, Foreclosure, Expenses

Sets dates by which person acquiring condominiums apartments
after foreclosure will be liable for common expenses.

HOUSE OF REPRESENTATIVES                H.B. NO.766        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Condominiums are a unique form of property
 2 ownership; in addition to owning one's own apartment and paying
 3 for those related expenses, condominium owners also share jointly
 4 in the enjoyment of, and payment for, the common elements in the
 5 condominium.  It is important for the smooth operation of the
 6 condominium association that payments for common elements be made
 7 on a timely basis by all owners.
 8      In the situation where a condominium apartment is foreclosed
 9 on, the statutes specify that the new owner, be it the mortgagee
10 or other purchaser, is not liable for past common element
11 expenses.  However, the statute is silent on when the liability
12 for those common expenses will begin.
13      The purpose of this Act is to clarify when, after
14 foreclosure, the person who obtains possession of the apartment
15 will be responsible for common expenses.
16      SECTION 2.  Section 514A-90, Hawaii Revised Statutes, is
17 amended by amending subsection (b) to read as follows:
18      "(b)  Where the mortgagee of a mortgage of record or other
19 purchaser of an apartment obtains title to the apartment as a

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                                     H.B. NO.766        

 1 result of foreclosure of the mortgage, the acquirer of title and
 2 the acquirer's successors and assigns shall not be liable for the
 3 share of the common expenses or assessments by the association of
 4 apartment owners chargeable to the apartment which became due
 5 prior to the acquisition of title to the apartment by the
 6 acquirer.  The unpaid share of common expenses or assessments
 7 shall be deemed to be common expenses collectible from all of the
 8 apartment owners, including the acquirer and the acquirer's
 9 successors and assigns.  The mortgagee of record or other
10 purchaser of the apartment shall be deemed to acquire title and
11 shall be required to pay the apartment's share of common expenses
12 and assessments beginning:
13      (1)  Thirty-six days after the order confirming the sale to
14           the purchaser has been filed with the court;
15      (2)  Sixty days after the hearing at which the court grants
16           to the motion to confirm the sale to the purchaser; or
17      (3)  Upon the recording of the deed, whichever occurs
18           first."
19      SECTION 3.  New statutory material is underscored.
20      SECTION 4.  This Act shall take effect upon its approval.
22                           INTRODUCED BY:_________________________