§514A-90 
Priority of lien.  (a)  All sums
assessed by the association of apartment owners but unpaid for the share of the
common expenses chargeable to any apartment constitute a lien on the apartment
prior to all other liens, except:



(1)  Liens for taxes and assessments lawfully imposed
by governmental authority against the apartment; and



(2)  All sums unpaid on any mortgage of record that
was recorded prior to the recordation of notice of a lien by the association of
apartment owners, and costs and expenses including attorneys' fees provided in
such mortgages.



The lien of the
association of apartment owners may be foreclosed by action or by nonjudicial
or power of sale foreclosure procedures set forth in chapter 667, by the
managing agent or board of directors, acting on behalf of the association of
apartment owners, in like manner as a mortgage of real property.  In any such
foreclosure the apartment owner shall be required to pay a reasonable rental
for the apartment, if so provided in the bylaws, and the plaintiff in the
foreclosure shall be entitled to the appointment of a receiver to collect the
rental owed.  The managing agent or board of directors, acting on behalf of the
association of apartment owners, unless prohibited by the declaration, may bid
on the apartment at foreclosure sale, and acquire and hold, lease, mortgage,
and convey the apartment.  Action to recover a money judgment for unpaid common
expenses shall be maintainable without foreclosing or waiving the lien securing
the unpaid common expenses owed.



(b)  Except
as provided in subsection (g), when the mortgagee of a mortgage of record or
other purchaser of an apartment obtains title to the apartment as a result of
foreclosure of the mortgage, the acquirer of title and the acquirer's successors
and assigns shall not be liable for the share of the common expenses or
assessments by the association of apartment owners chargeable to the apartment
which became due prior to the acquisition of title to the apartment by the
acquirer.  The unpaid share of common expenses or assessments shall be deemed
to be common expenses collectible from all of the apartment owners, including
the acquirer and the acquirer's successors and assigns.  The mortgagee of
record or other purchaser of the apartment shall be deemed to acquire title and
shall be required to pay the apartment's share of common expenses and
assessments beginning:



(1)  Thirty-six days after the order confirming the
sale to the purchaser has been filed with the court;



(2)  Sixty days after the hearing at which the court
grants the motion to confirm the sale to the purchaser;



(3)  Thirty days after the public sale in a
nonjudicial power of sale foreclosure pursuant to section 667-5; or



(4)  Upon the recording of the instrument of
conveyance,



whichever occurs first; provided that the mortgagee
of record or other purchaser of the apartment shall not be deemed to acquire
title under paragraph (1), (2), or (3), if transfer of title is delayed past
the thirty-six days specified in paragraph (1), the sixty days specified in
paragraph (2), or the thirty days specified in paragraph (3), when a person who
appears at the hearing on the motion or a party to the foreclosure action
requests reconsideration of the motion or order to confirm sale, objects to the
form of the proposed order to confirm sale, appeals the decision of the court
to grant the motion to confirm sale, or the debtor or mortgagor declares
bankruptcy or is involuntarily placed into bankruptcy.  In any such case, the
mortgagee of record or other purchaser of the apartment shall be deemed to
acquire title upon recordation of the instrument of conveyance.



(c)  No apartment owner shall withhold any
assessment claimed by the association. An apartment owner who disputes the
amount of an assessment may request a written statement clearly indicating:



(1)  The amount of common expenses included in the
assessment, including the due date of each amount claimed;



(2)  The amount of any penalty, late fee, lien filing
fee, and any other charge included in the assessment;



(3)  The amount of attorneys' fees and costs, if any,
included in the assessment;



(4)  That under Hawaii law, an apartment owner has no
right to withhold assessments for any reason;



(5)  That an apartment owner has a right to demand
mediation or arbitration to resolve disputes about the amount or validity of an
association's assessment; provided the apartment owner immediately pays the
assessment in full and keeps assessments current; and



(6)  That payment in full of the assessment shall not
prevent the owner from contesting the assessment or receiving a refund of
amounts not owed.



Nothing in this section shall limit the rights of an
owner to the protection of all fair debt collection procedures mandated under
federal and state law.



(d)  An apartment owner who pays an association
the full amount claimed by the association may file in small claims court or
require the association to mediate to resolve any disputes concerning the
amount or validity of the association's claim.  If the apartment owner and the
association are unable to resolve the dispute through mediation, either party
may file for arbitration under part VII; provided that an apartment owner may
only file for arbitration if all amounts claimed by the association are paid in
full on or before the date of filing.  If the apartment owner fails to keep all
association assessments current during the arbitration, the association may ask
the arbitrator to temporarily suspend the arbitration proceedings.  If the
apartment owner pays all association assessments within thirty days of the date
of suspension, the apartment owner may ask the arbitrator to recommence the
arbitration proceedings.  If the owner fails to pay all association assessments
by the end of the thirty-day period, the association may ask the arbitrator to
dismiss the arbitration proceedings.  The apartment owner shall be entitled to
a refund of any amounts paid to the association which are not owed.



(e)  As an
alternative to foreclosure proceedings under subsection (a), where an apartment
is owner-occupied, the association of apartment owners may authorize its
managing agent or board of directors to, after sixty days' written notice to
the apartment owner and to the apartment's first mortgagee of the nonpayment of
the apartment's share of the common expenses, terminate the delinquent
apartment's access to the common elements and cease supplying a delinquent
apartment with any and all services normally supplied or paid for by the
association of apartment owners.  Any terminated services and privileges shall
be restored upon payment of all delinquent assessments.



(f)  Before the board of directors or managing
agent may take the actions permitted under subsection (e), the board shall
adopt a written policy providing for such actions and have the policy approved
by a majority vote of the apartment owners at an annual or special meeting of
the association or by the written consent of a majority of the apartment
owners.



(g)  Subject to this subsection, and
subsections (h) and (i), the board of an association of apartment owners may
specially assess the amount of the unpaid regular monthly common assessments
for common area expenses against a person who, in a judicial or nonjudicial
power of sale foreclosure, purchases a delinquent apartment; provided that:



(1)  A purchaser who holds a mortgage on a delinquent
apartment that was recorded prior to the filing of a notice of lien by the
association of apartment owners and who acquires the delinquent apartment
through a judicial or nonjudicial foreclosure proceeding, including purchasing
the delinquent apartment at a foreclosure auction, shall not be obligated to
make, nor be liable for, payment of the special assessment as provided for
under this subsection; and



(2)  A person who subsequently purchases the
delinquent apartment from the mortgagee referred to in paragraph (1) shall be
obligated to make, and shall be liable for, payment of the special assessment
provided for under this subsection; provided that the mortgagee or subsequent
purchaser may require the association of apartment owners to provide at no
charge a notice of the association's intent to claim a lien against the
delinquent apartment for the amount of the special assessment, prior to the
subsequent purchaser's acquisition of title to the delinquent apartment.  The
notice shall state the amount of the special assessment, how that amount was
calculated, and the legal description of the apartment.



(h)  The amount of the special assessment
assessed under subsection (g) shall not exceed the total amount of unpaid
regular monthly common assessments that were assessed during the six months
immediately preceding the completion of the judicial or nonjudicial power of
sale foreclosure.  In no event shall the amount of the special assessment
exceed the sum of $3,600.



(i)  For purposes of subsections (g) and (h),
the following definitions shall apply:



"Completion" means:



(1)  In a nonjudicial power of sale
foreclosure, when the affidavit required under section 667-5 is filed; and



(2)  In a judicial foreclosure, when a
purchaser is deemed to acquire title pursuant to subsection (b).



"Regular monthly common assessments"
shall not include:



(1)  Any other special assessment, except for
a special assessment imposed on all apartments as part of a budget adopted
pursuant to section 514A-83.6;



(2)  Late charges, fines, or penalties;



(3)  Interest assessed by the association of
apartment owners;



(4)  Any lien arising out of the assessment;
or



(5)  Any fees or costs related to the
collection or enforcement of the assessment, including attorneys' fees and
court costs. [L 2007, c 244, pt of §2; am L
2009, c 10, §2]