HAWAII – Why Condo Associations Are Sweating After A Judge’s Ruling

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:

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