STAND. COM. REP. NO. 329

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 285
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Government Operations and Housing, to
which was referred S.B. No. 285, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO CONDOMINIUM PROPERTY
     REGIMES,"

begs leave to report as follows:

     The purpose of this measure is to expressly permit
condominium associations to purchase from the lessor one hundred
percent of the leased-fee interest in condominiums.

     Testimony in favor of this measure was received from the
Hawaii Council of Associations of Apartment Owners and Neeley &
Anderson, Attorneys at Law.

     Under current law, Chapter 514C, Hawaii Revised Statutes
(HRS), empowers lessors to offer their leased fee interest to a
third-party investor or condominium association member.  However,
Chapter 514C, HRS, does not apply to direct negotiations between
associations and lessors.  

     Your Committee finds that condominium association members
have purchased their leased fees interests in bulk purchase
transactions negotiated by the boards of directors of their
associations even though the Condominium Property Act does not
contain express authorization for condominium associations to
engage in such transactions.


 
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                                   STAND. COM. REP. NO. 329
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     Your Committee finds that lack of authorization to engage in
this type of transaction creates an undesirable uncertainty as to
the nature and extent of the authority of the boards of directors
of condominium associations to negotiate with lessors for the
bulk purchases of their leased fee interests.
     
     Your Committee finds that an amendment to the Condominium
Property Act is needed to expressly empower condominium
associations to negotiate with lessors for the purchase of one
hundred percent of the lessor's interest by the association and
its members.

     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and
purpose of S.B. No. 285, S.D. 1, and recommends that it be
referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Government
                                   Operations and Housing,



                                   ______________________________
                                   ROD TAM, Chair

 
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