HOUSE OF REPRESENTATIVES

H.B. NO.

648

TWENTY-NINTH LEGISLATURE, 2017

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to condominiums.

 

 

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

 


     SECTION 1.  The legislature finds that existing condominium law permits different classes of directors in mixed-use projects and provides for the removal of directors by a majority of unit owners.  However, clarification is needed in the law regarding the removal of directors in a mixed-use project.

     The legislature further finds that existing law specifies that no votes allocated to a unit owned by a condominium association may be cast for the election or reelection of directors.  This prohibition may be an issue for mixed-use condominium projects where directors are elected by different classes of owners.  For example, in a mixed-use project that contains residential and commercial units, the board of directors may be comprised of directors elected by residential unit owners and directors elected by commercial unit owners.  A condominium association who owns the single commercial unit in a mixed-use project would therefore be unable to elect or reelect the directors needed to represent that commercial unit.

     Accordingly, the purpose of this Act is to:

     (1)  Clarify that the removal or replacement of a director elected by a class of unit owners shall be by a majority of only the members of that class; and

     (2)  Specify that for an election in a mixed-use condominium project where directors are elected by different classes of owners, an association is permitted to cast a vote or votes allocated to any nonresidential unit owned by the association where those eligible to vote in the election are limited to owners of one or more nonresidential units, including the nonresidential unit owned by the association.

     SECTION 2.  Section 514B-110, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:

     "(h)  This section shall not preclude the removal and replacement of any one or more members of the board pursuant to section 514B‑106(f)[.]; provided that any director elected by a class of unit owners may be removed or replaced only by a vote of a majority of the common interest represented by that class.  Any removal and replacement shall not affect the proportionate composition of the board as prescribed in the bylaws as amended pursuant to this section."

     SECTION 3.  Section 514B-123, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  No votes allocated to a unit owned by the association may be cast for the election or reelection of directors[.]; provided that, notwithstanding section 514B-106(b) or any provision in an association's declaration or bylaws to the contrary, in a mixed-use project containing units for residential and nonresidential use, where the board is comprised of directors elected by owners of residential units and directors elected by owners of nonresidential units, the association, acting by and through its board, may cast the vote or votes allocated to any nonresidential unit owned by the association in any election of one or more directors where those eligible to vote in the election are limited to owners of one or more nonresidential units, which includes the nonresidential unit owned by the association."

     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.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Condominiums; Associations; Board of Directors; Mixed-use Projects; Elections

 

Description:

Clarifies that the removal or replacement of a director elected by a class of unit owners shall be by a majority of only the members of that class.  Specifies that for an election in a mixed-use condominium project where directors are elected by different classes of owners, an association may cast a vote or votes allocated to any nonresidential unit owned by the association where those eligible to vote in the election are limited to owners of one or more nonresidential units, including the nonresidential unit owned by the association.

 

 

 

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