HOA and condo association foreclosure in Hawaii

HOA and condo collection rules in Hawaii, step by step

• Which law covers your community

  Check your declaration

  The Condominium Property Act, HRS chapter 514B, applies to all condominiums in Hawaii no matter when they were created, and its amendments apply to all of them. Planned community associations, such as single-family and townhouse subdivisions with an association, are covered by HRS chapter 421J, which applies to every planned community association that existed on June 16, 1997 or was created after. The association power of sale process is in HRS chapter 667, part VI.

  HRS § 514B-21(a); HRS § 421J-1; HRS § 667-91

• An automatic lien, and your right to a written statement

  As soon as an assessment goes unpaid

  Unpaid assessments are automatically a lien on your unit. A recorded association lien expires after 6 years unless the association starts enforcing it, and it must sue within 6 years after an assessment came due. If you dispute what you owe, you can ask for a written statement that separates regular assessments from fines, late fees, lien fees and attorney's fees. Hawaii law says you cannot withhold assessments, but you can pay them and still contest them, and you can demand mediation over disputed fees and fines before paying those charges.

  HRS § 514B-146(a), (c) to (g); HRS § 421J-10.5(a), (c), (d)

• Notice of default, 60 days to cure and a payment plan

  Cure within 60 days; propose a plan within 30 days after service

  Before a power of sale, the association must serve a notice of default and intention to foreclose that itemizes the debt, gives a cure date at least 60 days out and lists approved housing counselors. You can send a payment plan by certified mail or hand delivery within 30 days, and the association cannot reject a reasonable plan: one that keeps new assessments current and pays the arrears over up to 12 months. The foreclosure is on hold while you keep to the plan, and unpaid fines added during the plan are not a default.

  HRS §§ 667-92(a) to (e), 667-94

• No power of sale for fines and fees alone

  Before any foreclosure

  An association cannot use the nonjudicial power of sale to foreclose a lien that arises only from fines, penalties, legal fees or late fees. That kind of lien must be foreclosed in court, where you are served and can answer. Ask for a ledger so you can see whether any unpaid regular assessments are part of the lien.

  HRS § 514B-146(a); HRS § 421J-10.5(a)

• The public sale, and your last day to cure

  At least 60 days after the sale notice; cure up to 3 business days before

  If you do not cure or agree on a plan, the association must mail and post a public notice of sale and publish it once a week for 3 weeks. The sale is held at least 60 days after the notice goes out, at a state facility in your county. You can cure up to 3 business days before the sale by paying the amount owed without acceleration plus fees and costs, and after that there is generally no right to cure or redeem.

  HRS §§ 667-95, 667-96, 667-97(d)

• What the association's lien does to your mortgage

  Depends on recording dates

  A condo association's lien comes ahead of other liens except property taxes and a mortgage recorded before the association recorded its notice of lien. A planned community's lien priority follows its documents or, if they are silent, recording dates. An association sale does not pay off or wipe out an earlier recorded mortgage, so the buyer takes the unit subject to it and you may still owe your lender.

  HRS § 514B-146(a); HRS § 421J-10.5(a); HRS §§ 667-100(c), 667-102(b)

• If your lender forecloses instead

  After a mortgage foreclosure sale

  A lender or buyer who gets title through a mortgage foreclosure is not liable for dues that came due before it took title. A condo board can specially assess that buyer for up to 6 months of unpaid regular monthly assessments, not counting late charges, fines, interest or collection costs. In a planned community, a senior mortgage lender that buys the home does not owe that special assessment, but a later buyer from the lender can.

  HRS § 514B-146(b), (j) to (l); HRS § 421J-10.5(b), (g) to (i)

Common questions in Hawaii