Requesting The Auditor To Conduct An Audit Of The Real Estate Commission's Oversight Of Real Estate Management Entities Under Chapter 514b, Hawaii Revised Statutes, And Make Recommendations To Improve The Effectiveness Of The Commission's Oversight Of Real Estate Management Entities And Related Issues.
The proposed audit will assess a range of issues related to the Real Estate Commission’s current practices, including nonjudicial foreclosures, the enforcement of bylaws, and the use of unlicensed contractors. It aims to determine if existing laws and regulations are being effectively enforced and whether there is a need for legislative changes to fortify the Commission's authority. The audit may unveil structural weaknesses in how the Commission monitors compliance, which could necessitate further legislative adjustments to improve accountability and transparency within the real estate management system in Hawaii.
Senate Resolution 168 (SR168) requests the Auditor to conduct an audit of the Real Estate Commission's oversight of real estate management entities as stipulated under Chapter 514B of the Hawaii Revised Statutes. The resolution stems from growing concerns among stakeholders—such as condominium owners, residents, and property management professionals—regarding gaps in oversight that may compromise governance and management practices in Hawaii's condominium regimes. The effective governance of these properties is deemed critical for maintaining their value and livability, especially given that condominium regimes provide significant housing supply in the state.
Notably, the bill identifies several contentious issues plaguing condominium governance. Stakeholders have raised concerns about financial practices, such as improper fines imposed by management entities that do not align with established bylaws. Governance issues, including selective enforcement of rules and lack of access to critical governance documents, also feature prominently. Furthermore, the bill highlights the need for better mediation and dispute resolution processes to mitigate the financial burden on homeowners, exacerbated by inefficiencies within the current oversight framework. Gaps in the Commission's authority to impose adequate penalties for violations could undermine trust in condominium governance.
In its resolution, the Auditor is urged to provide recommendations to enhance the effectiveness of the Real Estate Commission's oversight responsibilities. This includes examining the adequacy of penalties imposed for violations, ensuring proper enforcement against unlicensed contractors, and improving public access to governance documents. The recommendations may also focus on creating more transparent and equitable practices within the condominium management sphere, potentially advocating for the implementation of digital tools to streamline access to essential governance documentation.