HAR Chapters 119.1 through 119.8 – Condominiums (effective 3/26/26)

CHAPTER 119.7

CONDOMINIUMS - MANAGING AGENT

§16-119.7-1 No registration required §16-119.7-2 Managing agent; bookkeeper; accountant §16-119.7-3 Conduct

§16-119.7-1 No registration required. The following persons who assist with the conduct of managing agent activity are excluded from the definition of managing agent: (1) An employee of an association; (2) An employee of a managing agent; or (3) A person independently contracted by the association for landscaping, gardening, painting, cleaning, construction, maintenance, repair, security, bookkeeping, accounting, and similar work who does not handle or have access to the funds of the association. Access includes receiving or depositing association funds, issuance of checks, transfers, or debits payable from association funds, or signature authority on any association bank account. [Eff MAR 26 2026 ] (Auth: HRS §§514B-61, 514B-132) (Imp: HRS §514B-3)

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§16-119.7-2

16-119.7-2 Managing agent; bookkeeper; accountant. (a) Unless otherwise specifically prohibited by law, the declaration, or bylaws, an association may contract with an independent bookkeeper or accountant to assist with maintaining the association's fiscal records provided the independent bookkeeper or accountant: (1) Is not an employee of the association; (2) Does not have access to association funds; (3) Does not manage the operation of the project's property; and (4) Is not within the definition of managing agent pursuant to sections 514B-3 and 514B- 13 2 ( 1 ) ( B) , HRS . (b) An association contracting with a bookkeeper or accountant in the manner provided by this section shall initially and annually adopt a resolution stating that the board is aware, acknowledges, and accepts that the independent bookkeeper or accountant: (1) Is not a currently registered managing agent pursuant to section 514B-132, HRS; (2) Has or has no fidelity bond; (3) Does not have access to association funds, including receipt or deposit of funds (including checks) or signature authority on association fund accounts; and ( 4) Does not manage the operation of the project's property. The resolution shall be executed by the association's board and attached to the association's biennial registration application. The association's registration will be considered incom2lete if the resolution is not attached. [Eff MAH 26 2026 ] (Auth: HRS §514B-61) (Imp: HRS §§514B-3, 514B-132)

§16-119.7-3 Conduct. (a) A managing agent shall not accept any compensation, commission, rebate, or profit on any expenditure for an association that

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§16-119.7-3

it manages or from a unit owner without the association's knowledge and written consent. (b) Where agreed upon in writing with an organized association, a managing agent shall complete the registration and reregistration of the association pursuant to section 514B-103, HRS. (c) In managing the operation of the property, the managing agent shall be responsible for full compliance by its employees and agents with the applicable provisions of chapters 467 and 514B, HRS, the rules adopted pursuant thereto, and commission requirements. (d) Where a provision in chapter 467, HRS, conflicts with a provision of chapter 514B, HRS, regarding the conduct required of a managing agent, chapter 514B, HRS, controls. For example, section 467-1.6(b) (1), HRS, provides that the principal broker shall be responsible for the client trust accounts, disbursements from those accounts, and the brokerage firm's accounting practices. Section 514B-14 9 ( c) ( 2) , HRS, provides that all funds collected by a managing agent from an association shall be held in a client trust fund account and shall be disbursed only by the managing agent or the managing agent's employees under the supervision of the association's board. In this example, section 514B-149 (c) (2), HRS, controls, and the managing agent's employees may disburse funds from the client trust account established for the association under the supervision of the principal broker and supervision of the association's board. [Eff MAR 26 2026 ] (Auth: HRS §514B-61) (Imp: HRS §§467-1. 6 (b) (1), 514B-149)

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§16-119.8-1

HAWAII ADMINISTRATIVE RULES

TITLE 16

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS