STAND. COM. REP. NO. 2936

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2846
                                        H.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Government Operations and Housing, to
which was referred H.B. No. 2846, H.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 reduce the potential for
litigation due to inconsistent lease rent responsibility
renegotiation provisions in condominium governing documents and
condominium apartment leases or ground leases by:

     (1)  Giving condominium associations the responsibility of
          renegotiating lease rents;

     (2)  Requiring that the costs of lease rent renegotiations
          be borne solely by the members of the association whose
          apartments are in leasehold; and

     (3)  Providing that the costs of lease rent renegotiation
          may be collected in the same manner complying with the
          same requirements governing the collection of
          association common expenses.

     Testimony in support of this measure was received from the
Hawaii Council of Associations of Apartment Owners and the Hale
Coalition.


 
a                                                     HB2846 HD1
 
                                   STAND. COM. REP. NO. 2936
                                   Page 2


     In 1993, the Legislature passed Act 326, Session Laws of
Hawaii, which authorized the sale of the leased fee interest in
the land under any condominium project, to individual condominium
unit lessees.  Conversion from lease to fee ownership under this
law resulted in associations comprised of both fee simple
apartment owners and apartment lessees.

     As a result, associations currently facing lease rent
renegotiations are now discovering that their governing
declarations fail to address or accommodate fee simple apartment
owners who are not subject to or interested in lease rent
renegotiations.  The result is that condominium governing
documents incorrectly assume a commonality of the interests of
association members in rent renegotiation and fail to state who
is responsible for the rent renegotiations which has led to
litigation.

     Your Committee notes, keeping in mind the intent of the
Condominium Property Regime Law to facilitate association
self-governance, that:

     (1)  This measure should not apply where the lessees are
          able to organize 100% of their group and raise the
          funds to pay for the lease rent renegotiation; and

     (2)  If a rent renegotiation committee is convened, lessees
          should be included in the committee.

     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 H.B. No. 2846, H.D. 1, and recommends that it pass
Second Reading and be referred to the Committee on Commerce and
Consumer Protection.

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



                                   ______________________________
                                   ROD TAM, Chair

 
a                                                     HB2846 HD1