HB849 would amend Hawaii’s condominium law to increase unit-owner control over certain association financial decisions and to strengthen financial oversight. First, it changes the borrowing rules for condominium associations so that the board may borrow money for common-element expenses only after written notice of the borrowing terms is sent to all unit owners and a majority of unit owners vote for or give written consent to the loan. The bill also clarifies that financing insurance premiums within the policy period is not treated as a loan, and that certain equipment leases are not loans if the association may buy the equipment at fair market value at the end of the lease.
The bill also adds a new approval requirement for maintenance fee increases. Associations would still have to give at least 30 days’ written notice, but any increase would not take effect unless approved by a majority of unit owners through a vote or written consent. In addition, the bill expands fiscal oversight requirements by mandating annual audits and annual unannounced cash-balance verification by a CPA, with a waiver option for small associations with fewer than 20 units. It further requires each association to undergo a forensic audit at least once every three years, with the first one due by June 30, 2026, and to provide copies of the forensic audit to unit owners within 30 days of completion.
Impact
HB849 would amend multiple provisions of Chapter 514B, Hawaii Revised Statutes, governing condominium associations. It would shift authority away from boards alone and toward unit owners by requiring majority owner approval for association borrowing and for maintenance fee increases, and it would impose more detailed disclosure obligations regarding loan terms and financial reports. The bill would also create a recurring forensic-audit requirement, adding a new compliance obligation for associations and their accountants while preserving a waiver for smaller associations on the annual audit and cash-verification requirements.
Sentiment
The available bill materials suggest generally favorable or reform-oriented sentiment, with the measure framed as improving transparency, accountability, and owner participation in condominium governance. The report title and description emphasize clarifying loan approval, requiring owner approval for fee increases, and mandating periodic forensic audits, indicating a policy focus on oversight rather than expansion of board discretion. No committee transcript or recorded votes were provided, so there is no direct evidence of opposition or support beyond the bill’s stated purpose and referral status.
Contention
The main points of contention likely concern governance and administrative burden. Condominium boards and managing agents may view the bill as limiting their flexibility to respond quickly to repair, maintenance, or financing needs, especially because it requires majority owner approval for borrowing and fee increases. Unit owners and reform advocates are likely to support those same provisions as protections against unexpected debt and rising assessments. The new forensic-audit mandate may also be debated because it increases costs and compliance duties for associations, although the bill includes a limited waiver for small associations on some audit requirements.