We wanted to pass along this often overlooked regulation (especially among smaller complexes) from the Hawaii Department of Commerce and Consumer Affairs Real Estate Division:
Condominium owners and board members should be aware that each project or association having more than five units is required to register with the Real Estate Commission by completing the Commission’s registration application and paying mandatory fees, pursuant to §514B-103(a)(b), HRS. The Commission may also require additional information. Registration must be renewed every two years and include information on fidelity bond coverage, names and positions of association officers, and the name of the association managing agent, as well as the address for the designated contact officer.
Associations that fail to register are subject to §514B-72(c), HRS, which states, “Failure to pay the required fee by the due date shall result in a penalty assessment of ten per cent of the amount due and the association shall not have standing to bring any action to collect or to foreclose any lien for common expenses or other assessments in any court of this State until the amount due, including any penalty, is paid.” §514B-103(b), HRS, also states, “any association that fails to register as required by this section or whose registration is rejected or terminated shall not have standing to maintain any action or proceeding in the courts of this State until it registers.” [Emphasis added]
In the past, an owner was successful in having the courts dismiss an association action as the association was unregistered. Ultimately, the association registered and proceeded, but both owners and board members of an unregistered association should be aware of this condition precedent to bring, maintain, or proceed in a court action. An unregistered association, however, still may defend itself in court.