Condos, Foreclosure, Expenses

Specifies the time at which a person acquiring a condominium
apartment after foreclosure will become liable for the
apartment's share of common expenses.
(HB766 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
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 an apartment and paying for
 3 related expenses, condominium owners also share jointly in the
 4 enjoyment and cost of the condominium's common elements.  It is
 5 important for the smooth operation of the condominium association
 6 that payments for common elements be made on a timely basis by
 7 all owners.
 8      In a 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 liability for
12 those common expenses begins.
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
20 result of foreclosure of the mortgage, the acquirer of title and

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                                     H.B. NO.           H.D. 1

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