Relating To Condominiums.
If enacted, SB2764 will amend Section 514B-105 of the Hawaii Revised Statutes, specifically regarding payment applications. The changes stipulate that any payments made by or on behalf of a condominium unit owner will first apply to outstanding common expenses assessed to all unit owners. Only after settling these common expenses can payments be directed towards other charges owed to the association. Importantly, the bill allows any payments to also cover unpaid judgment interest, judgment principal, and related attorney fees, thereby reinforcing the financial positions of condominium associations in the context of legal collections.
SB2764 is a legislative bill introduced in Hawaii aimed at clarifying the allocation of payments made by condominium unit owners to their respective associations. Particularly, it modifies the existing law regarding how these payments are applied when there is an outstanding balance on a unit owner's account, especially in cases where a money judgment has been entered in favor of the condominium association. The bill builds upon the framework established by Act 192 of the Session Laws of Hawaii 2019, which attempted to clarify payment allocations but fell short in terms of judgments. This new act seeks to address those gaps and ensure that associations can apply payments to judgment debts effectively.
The primary points of contention regarding SB2764 may revolve around the implications for unit owners facing financial difficulties, as the clearer provisions for payment allocation could lead to stricter enforcement of debt collections by condominium associations. Critics of the bill may argue that it places an undue burden on unit owners in debt, limiting their ability to manage their financial obligations effectively. Supporters, on the other hand, may emphasize the need for associations to have clear legal tools to enforce judgments against delinquent owners, ensuring the financial health and operational viability of condominium communities.