## Facts

- Robert C. and P. Jean Penney owned a unit in the Hale Kaanapali condominium project on Maui.
- The recorded declaration designated a clubhouse/restroom area (about 2,664 square feet) as a common element for use in connection with the project.
- Hale Kaanapali Hotel Associates owned a snack bar unit adjacent to the restrooms and held a controlling majority of common interests (including interests held by proxy).
- At a special association meeting, owners voted to amend the declaration to redesignate the clubhouse/restroom area from a common element to a limited common element for the exclusive use of Hale Kaanapali Hotel Associates.
- The amendment passed with 76.83% of the common interests.
- The Penneys sued, arguing the amendment was invalid because it altered each unit’s appurtenant common interest and therefore required unanimous consent under HRS § 514A-13(b), not a 75% vote under HRS § 514A-13(d)(1).
- The circuit court upheld the amendment as a permissible change in the use of common elements under HRS § 514A-13(d)(1), and the Penneys appealed.

## Issues

1. Whether redesignating a common element as an exclusive-use limited common element for one unit owner is a “change in the use of the common elements” requiring 75% approval under HRS § 514A-13(d)(1), or an alteration of “common interest appurtenant to each apartment” requiring unanimous consent of affected owners under HRS § 514A-13(b).
2. Whether a supermajority vote may lawfully deprive nonconsenting unit owners of shared rights in a common element by assigning it for the exclusive use of a single owner.

## Decision

- The Hawaii Supreme Court reversed the circuit court.
- The court held that converting a common element into a limited common element for the exclusive use of one unit owner alters the common interests appurtenant to the other units.
- Because the amendment altered appurtenant common interests, it required the consent of all affected apartment owners under HRS § 514A-13(b); 76.83% approval was insufficient.
- The court vacated the judgment upholding the amendment and remanded for further proceedings.

## Legal Principles

- Under HRS § 514A-13(b), the common interest appurtenant to each apartment has a permanent character and cannot be altered without the consent of all apartment owners affected.
- HRS § 514A-13(d)(1) permits a 75% vote to change the use of common elements, but it does not authorize reallocating common property rights by removing a common element from shared ownership/use and assigning it exclusively to one unit.
- A declaration amendment that eliminates other owners’ rights to use a designated common element is an alteration of their appurtenant common interests, not merely a change in use.

## Conclusion

The court held that an amendment granting one unit owner exclusive rights to a previously shared common element alters other owners’ appurtenant common interests and therefore is invalid without unanimous consent of the owners affected.


Penney v. Ass'n of Apartment Owners of Hale Kaanapali, 776 P.2d 393 (Haw. 1989)