Condo, Foreclosure, Commission

Requires mortgage holders to pay common expenses to the
association while foreclosure proceedings are pending, if the
unit is being rented pending the foreclosure.  Increases
membership of real estate commission by 2 members who must
represent interests of condominium governance organizations;
clarifies that moneys in condominium management education fund
shall be used exclusively for purposes of the condominium
management education fund. (SD1)

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1                              PART I
 2      SECTION 1.  Chapter 514A, Hawaii Revised Statutes, is
 3 amended by adding a new section to be appropriately designated
 4 and to read as follows:
 5      "514A-    Common expenses to be paid during foreclosure;
 6 when.  Notwithstanding sections 514A-15(b) and 514A-90, if a
 7 mortgage holder or court-appointed receiver or commissioner
 8 collects rent on any apartment that is in foreclosure, the
 9 mortgage holder or court-appointed receiver or commissioner shall
10 pay to the association of apartment owners the current common
11 expenses chargeable to the apartment.  The current common
12 expenses shall be paid to the association of apartment owners
13 from the date the rent is first collected to the date the rent is
14 no longer collected or the foreclosure proceedings are completed,
15 whichever occurs first."
16                              PART II
17      SECTION 2.  The legislature finds that the real estate
18 commission collects annual fees from condominium owners
19 associations for deposit to the condominium management education

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 1 fund.  In recent years, the number of training and workshop
 2 opportunities provided for condominium management has been
 3 limited.  Therefore, excess funds are at-risk of being deposited
 4 into the general fund.  In an effort to keep government
 5 operations from growing too large, condominium associations need
 6 representation on the real estate commission rather than the
 7 establishment of a condominium commission.
 8      Funds from the education fund are currently being used for
 9 staffing the commission for non-education fund purposes, contrary
10 to legislative intent.  The legislature further finds that it
11 should be the condominium associations that make decisions
12 regarding the appropriate use of the fund.  Therefore, the
13 purpose of this part is to add two additional seats to the
14 commission who represent the interests of condominium governance
15 organizations and prohibit the use of education funds for
16 purposes other than the condominium education fund.
17      SECTION 3.  Section 467-3, Hawaii Revised Statutes, is
18 amended to read as follows:
19      "467-3 Commission, appointments, qualifications, tenure.
20 There shall be appointed a commission to be known as the real
21 estate commission, [to consist] consisting of [nine] eleven
22 members, at least four of whom shall be licensed real estate

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 1 brokers who have been engaged in business as licensed real estate
 2 brokers or salespersons for three years immediately preceding
 3 their appointments, each of whom shall be a citizen of the United
 4 States and shall have resided in the State for at least three
 5 years preceding appointment, and one of whom shall be designated
 6 by the appointing power as chairperson.  Four members shall be
 7 residents of the city and county of Honolulu, one shall be a
 8 resident of the county of Hawaii, one shall be a resident of the
 9 county of Maui, and one shall be a resident of the county of
10 Kauai and [two] four members shall be public members.  At least
11 two of the eleven members shall be apartment owners of units in
12 condominium property regimes who represent the interests of
13 condominium governance organizations.
14      Appointments shall be made for a term of four years,
15 commencing from the date of expiration of the last preceding term
16 and shall be made to expire on June 30.  Appointments shall be
17 made so that at least one appointment shall be required each
18 year.
19      Any vacancy shall be filled by appointment for the unexpired
20 term."
21      SECTION 4.  Section 514A-133, Hawaii Revised Statutes, is
22 amended by amending subsection (b) to read as follows:

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                                     S.B. NO.           S.D. 1

 1      "(b)  [The] In order to carry out the responsibilities under
 2 this part, the commission and the director of commerce and
 3 consumer affairs may use moneys in the condominium management
 4 education fund to employ necessary personnel not subject to
 5 chapters 76 and 77 for additional staff support, hired
 6 exclusively to carry out responsibilities under this part, to
 7 provide office space, and to purchase equipment, furniture, and
 8 supplies [required by the commission to carry out its
 9 responsibilities under this part].  Moneys used from the
10 condominium management education fund must exclusively be used to
11 carry out the commission's responsibilities under this part."
12      SECTION 5.  Statutory material to be repealed is bracketed.
13 New statutory material is underscored.
14      SECTION 6.  This Act shall take effect upon its approval.