STAND. COM. REP. NO. 579-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2310
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2310 entitled: 

     "A BILL FOR AN ACT RELATING TO THE SALE OF RESIDENTIAL
     CONDOMINIUM APARTMENTS TO OWNER-OCCUPANTS,"

begs leave to report as follows:

     The purpose of this bill is to recognize the current
competitive market for and ample inventory of condominium
apartments, by streamlining sales requirements originally
designed to address the speculative housing market of the 70's
and 80's.  This bill retains requirements giving potential owner-
occupants of condominium apartments notice of the sale of
residential apartments and opportunity to purchase an apartment
at its initial offering price, while adding flexibility to the
law by:

     (1)  Allowing the owner-occupant presale announcement to be
          issued in the form of an advertisement;

     (2)  Allowing the chronological system used to offer
          apartments to prospective owner-occupants, to be based
          on the order of reservations for an apartment;

     (3)  Allowing the developer to exchange apartments
          designated for owner-occupants, with non-designated
          apartments, so long as they are similar types of
          apartments;


 
 
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     (4)  Repealing limitations on the time period in which a
          buyer must obtain adequate financing;

     (5)  Removing restrictions on the type of loan that an
          owner-occupant may obtain; and

     (6)  Deleting the requirement that the owner-occupant must
          file for the owner-occupant property tax exemption at
          the closing of escrow.

This bill also streamlines the law by:

     (1)  Removing the requirement that each owner-occupant be
          provided twice, by certified or registered mail, with a
          complete copy of the affidavit executed by the owner-
          occupant that must include information about the loan
          restriction and property tax exemption filing
          requirements;

     (2)  Reducing the amount of information that must be
          included in the owner-occupancy presale announcement to
          recognize a change in the law making the information
          available in the public report of the residential
          condominium project before the announcement is made;

     (3)  Deleting the requirement that a notarized owner-
          occupancy affidavit be reaffirmed; and

     (4)  Providing that projects developed pursuant to
          affordable housing requirements of a state or county
          agency, and thus subject to state or county regulation
          under those agencies, need not provide detailed written
          notification to the Real Estate Commissioner of the
          provisions of the condominium owner-occupant law that
          will be waived because they conflict with affordable
          housing requirements.

     Your Committee received testimony in support of this bill
from the Real Estate Commission (Commission), Gentry Companies,
and the Land Use Research Foundation of Hawaii.  The Department
of Commerce and Consumer Affairs (DCCA) and Gentry Companies
suggested technical, clarifying amendments.

     Your Committee finds that the bill will benefit businesses
and consumers by adding flexibility to the law regulating the
sale of residential condominium apartments without diluting
existing consumer protections.  Technical amendments requested by
the Commission and Gentry Companies have been adopted, and

 
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additional nonsubstantive amendments have been made for purposes
of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 2310, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
2310, H.D. 1, and be placed on the calendar for Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair