Why proxies are the fault line in Hawaii association governance

Because of who holds them, and what happens when a form is filled in wrong.

HRS § 514B-123(e) mandates a four-box standard proxy form: (A) for quorum purposes only; (B) to a named individual; (C) to the board as a whole, voted “on the basis of the preference of the majority of the directors present”; or (D) to those directors present, the vote shared equally.

Then the sentence that decides Hawaii elections: “if the proxy is returned with no box or more than one of the boxes… checked, the proxy shall be counted for quorum purposes only.”

An owner who intended to vote and ticked two boxes has, by operation of statute, helped the meeting reach quorum and cast no vote. In an association where turnout is thin, the aggregate of those defective forms is frequently larger than the margin.

Options (C) and (D) are the other half of the picture: they direct the vote to the sitting board. A board that solicits proxies on the standard form is soliciting votes for itself, lawfully.

The guardrails that already exist

Hawaii has done more than most states to constrain this, and a board operates under these limits:

• § 514B-123(d) — a proxy is valid only if delivered to the secretary or managing agent no later than 4:30 p.m. Hawaii-Aleutian Standard Time on the second business day before the meeting, and must carry the association name, meeting date, printed names and signatures, unit numbers, the names of the persons to whom given, and the date.
• § 514B-123(j) — “No managing agent or resident manager, or their employees, shall solicit, for use by the managing agent or resident manager, any proxies… nor shall the managing agent or resident manager cast any proxy vote at any association meeting except for the purpose of establishing a quorum.”
• § 514B-123(k) — “No board shall adopt any rule prohibiting the solicitation of proxies or distribution of materials relating to association matters on the common elements by unit owners,” subject only to reasonable time, place and manner rules. This is the closest thing Hawaii has to a statutory speech protection inside a condominium.
• § 514B-123(i) — a board intending to use association funds to distribute proxies must post notice of that intent in prominent locations at least twenty-one days beforehand. Any owner who requests within seven days must be given the same channel, with a statement “limited to black text on white paper… not exceed[ing] one single-sided 8-1/2″ x 11″ page” addressing qualifications to serve or reasons for wanting proxies. A board member soliciting individually “shall proceed as a unit owner.”
• § 514B-123(c) — “No votes allocated to a unit owned by the association may be cast for the election or reelection of directors.”
• § 514B-123(f) — no proxy is irrevocable “unless coupled with a financial interest in the unit,” and revocation requires actual notice to the secretary or managing agent: “A proxy is void if it purports to be revocable without notice.”

What is missing, and what SB 2837 would have added

An enforcer. Every rule above is real, and every remedy for breaking it is private — mediation, arbitration, or a lawsuit the complaining owner funds. SB 2837 would have authorised the Real Estate Commission to act on election violations, which is the same instinct the Act 189 task force landed on from a different direction in June 2026.

A quorum answer. Chapter 514B contains no statutory quorum percentage. Quorum is a bylaws matter under § 514B-108(b)(8), which is why the quorum-only default in § 514B-123(e) matters so much: in many Hawaii associations the meeting only happens because defective proxies got it there.

What a board can do now

• Use the statutory four-box form and explain it plainly in the cover material. Nothing prevents an association from telling owners, in ordinary language, that ticking two boxes forfeits the vote.
• Follow § 514B-123(i) to the letter if association funds are used — twenty-one days’ posted notice, seven-day owner window, one page, black on white.
• Do not let the managing agent near proxy solicitation. Section 514B-123(j) is unambiguous.
• Do not adopt a rule restricting owner solicitation on the common elements. Subsection (k) forbids it, and a rule that is void is worse than no rule.

What to watch

Whether SB 2298’s modest disclosure requirement returns in 2027 covering condominiums rather than only cooperatives. It passed a chamber unanimously and died from inattention, which is the profile of a bill that comes back and passes.