STAND. COM. REP. NO. 1277-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2333
                                     S.D. 2




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 S.B. No. 2333, S.D. 2, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to provide condominium
associations with relief from the burden of delinquent
maintenance fees associated with apartments undergoing
foreclosure.  This has become an increasingly serious problem as
a result of the recent economic downturn.

     Specifically, the measure allows condominium associations to
recover delinquent maintenance fees that accrue prior to a
foreclosure, under the following conditions:

     (1)  The fees are to be recovered from the foreclosure
          purchaser so long as the association has filed a notice
          of lien against the delinquent apartment before the
          purchase is recorded.  Fees may be recovered from the
          person who subsequently purchases the apartment from
          the foreclosure purchaser if the association lien is
          filed prior to the subsequent purchaser's acquisition
          of title; and

     (2)  Delinquent fees that may be recovered are limited to
          the amount of regular monthly common assessments
          remaining unpaid during the six months immediately
          preceding completion of the foreclosure, with a maximum
          authorized recovery of $1,800.

 
                                 STAND. COM. REP. NO. 1277-00
                                 Page 2

 

The law sunsets on December 31, 2003.

     Your Committee received testimony in support of this bill
from the Real Estate Commission, Hawaii Council of Associations
of Apartment Owners, Hawaii Bankers Association, Association of
Apartment Owners of Makakilo Hale I, Inc., Yacht Harbor Towers
Owners Association, Mortgage Bankers Association of Hawaii, and
Community Associations Institute.

     Your Committee understands that this measure is the product
of a compromise between the positions of condominium groups and
lenders, and that it represents the general consensus of the
members of the two groups.

     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 S.B. No. 2333, S.D. 2, and recommends that it pass
Second Reading 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