Committee asks auditor for follow-up Sunrise review of condominium association managers

The House Committee on Consumer Protection & Commerce voted March 20 to ask the state auditor to conduct a follow-up Sunrise analysis of condominium association managers, advancing HCR24/HR23 with amendments.

Committee members voted to adopt an HD 1 that asks the auditor to perform the Sunrise review under Section 26H-6, Hawaii Revised Statutes, and to examine HB 1312 (introduced this session) as a possible modern legislative framework for regulating community association managers.

Supporters included Hawaii Realtors and the Real Estate Commission. Lindsay Garcia of Hawaii Realtors said, “We stand in support of this resolution,” and deferred to the Real Estate Commission on possible amendments. Keating Klein Hands, condominium specialist with the Hawaii Real Estate Commission, asked the committee to consider HB 1312, which he said provides a similar definition and framework for a community association manager.

Several condominium owners and association leaders described misconduct by managers and property management firms. Jessica Herzog said she was the victim of what she described as association embezzlement by a property management company that she said totaled more than $330,000 and that she has not seen evidence of prosecution or accountability. Greg Mesakian, who said he serves on multiple condominium boards, said he and other owners have encountered “malfeasance and issues” and questioned why a Sunrise study was needed rather than addressing the matter with current legislation; he urged lawmakers to respect condo owners and act.

An education chair for the Hawaii Council of Community Associations, who did not give a full name in testimony, said association board members need clearer access to financial documents and to training so they know what to look for when auditing association finances. That witness also urged removing barriers imposed by some property managers that can limit board members’ access to records.

During decision making the committee’s chair explained HD 1 would address auditor concerns and align the request with the statutory Sunrise process and with HB 1312’s scope of duties for resident managers. The committee adopted the chair’s recommendation to pass HCR24/HR23 with amendments. The roll call included affirmative votes from the chair and vice chair and Representatives Ilagan, Ichiama, Iwamoto, Kong, Lowen, Martin and Tam; Representative Hyrek was recorded as excused. The committee did not provide a specific timeline for the auditor’s work.

The measure now goes to the next legislative steps identified by the committee; no effective dates or further implementation details were specified in committee testimony or the adopted amendment.