CIVILBEAT.ORG: Why Condo Associations Are Sweating After A Judge’s Ruling
By Ian Lind
April 12, 2017
Honolulu – It’s probably going to take years to unravel the legal and financial uncertainty now facing condominium associations and law firms that used nonjudicial foreclosures — private sales without supervision by courts — to collect unpaid maintenance fees or other assessments prior to 2012.
That’s the best guess after the recent ruling by a federal judge in Honolulu that condominium associations were not legally eligible to use the streamlined, nonjudicial foreclosure process that allowed properties to be sold at auction with minimal notice to — or procedural protections for — the unit owners.
In a 57-page ruling filed March 30, U.S. District Court Judge Leslie Kobayashi concluded condominium associations did not have the power under Hawaii law to pursue quick, nonjudicial foreclosures under Part I of the state’s foreclosure law, which gave special rights to lenders whose mortgage contracts include a “power of sale” clause. Read more: