Committee advances bills to standardize condo budget summaries, tighten fine appeals process

The House Committee on Consumer Protection and Commerce on Jan. 30 advanced two bills aimed at improving consumer protections for condominium unit owners: HB 70, which requires a one-page budget summary to accompany condominium budgets, and HB 106, which changes the process for contesting association fines and limits recoverable attorney fees.

Supporters told the committee the measures are designed to make common‑interest community finances and enforcement more transparent and less costly. Phil Nerney, chair of the legislative action committee for the Community Associations Institute, testified that HB 70’s requirement for a “user‑friendly” summary will give owners a concise snapshot of an association’s financial health and that the statute requires only substantial compliance rather than perfection. Nerney also spoke in favor of HB 106’s additional due‑process steps and a streamlined appeal route that ends in small claims court.

Why it matters: Owners and prospective buyers frequently receive long reserve studies and budgets that are difficult to interpret, testimony said, and dispute resolution can escalate small fines into much larger legal bills. Proponents said one‑page summaries (HB 70) and a defined appeal path with limits on attorney fees (HB 106) reduce information asymmetry and the risk that minor enforcement actions become costly legal fights.

Key details - HB 70: Testimony from Richard Emery (Hawaii First Realty) and others referenced Act 199 (2024), which required budget summary disclosures, and urged stronger, clearer implementation countywide. Supporters want the one‑page summary to be completed and not merely referenced by a link to longer documents. The committee adopted the CAI‑proposed amendment and moved the bill forward, defecting the effective date to July 1, 3000 as a standard placeholder in amended language.

- HB 106: The bill would require heightened notice and internal appeal rights before a fine could be collected. If internal appeals fail, an owner may pursue the matter in small claims court; testimony identified the $5,000 small‑claims cap and raised concerns about potential counterclaims (one testifier cited a possible $40,000 countersuit). The committee adopted technical amendments, added language that the statute will control over association documents, extended mediation timelines (committee set 120 days in final action), and moved the bill forward.

What supporters said: Jeff Sodino and other owner‑advocates described repeated litigation and rapid escalation of costs when fines are litigated; they argued limits on recoverable attorney fees and internal review would make dispute resolution more accessible. Nerney and Richard Emery emphasized that the bills are intended to preserve associations’ ability to enforce rules while curbing fee spirals that often fall on owners.

What opponents or questioners raised: Witnesses and lawmakers noted unresolved issues, including the small claims monetary cap and how counterclaims against owners might play out; one testifier asked whether associations would appear in small claims with volunteer board members or paid staff representing them. Nerney said associations may choose who represents them, but small claims are informal fact‑based hearings and the bill disallows shifting attorney fees onto losing owners in these fine disputes.

Next steps: The committee passed both measures with amendments and forwarded them for further legislative consideration. Lawmakers also flagged related bills (ombudsman proposal, managing‑agent licensure, and others) that proponents say should be scheduled to address enforcement and management issues not covered by these two bills.

Ending: Committee members said they intend to continue refining language in subsequent hearings and to coordinate related measures so the package of condo reforms can address disclosure, management, and dispute resolution together.