STAND. COM. REP. NO. 936-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 3160
                                     S.D. 2
                                     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 S.B. No. 3160, S.D. 2, 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 amend the law governing the
initial sale of residential condominium apartments that was
enacted during the speculative housing market of the 70s and 80s
to give potential owner-occupants an opportunity to purchase
apartments at their initial offering price.  This bill retains
owner-occupant sale provisions while increasing the flexibility
of the law to reduce costs of compliance and reflect the current
competitive market and ample inventory of apartments.

     Testimony in support of the intent of this measure was
received from the Real Estate Commission (Commission) of the
Department of Commerce and Consumer Affairs, Land Use Research
Foundation of Hawaii, and Gentry Companies.

     All the testifiers stated their preference for H.B. No.
2310, H.D. 1, a similar measure that was reported out of your
Committee earlier this session.  The Commission explained that
H.B. No. 2310, H.D. 1:

     (1)  Provides for consistent usage of terms referring to
          apartments and residential apartments;

 
 
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     (2)  Specifies the minimum information to be included in the
          announcement or advertisement of the sale of apartments
          designated for owner-occupants, and allows for the
          inclusion of additional information, whereas this bill
          limits the information to be included;

     (3)  Specifies where apartments designated for sale to
          owner-occupants are to be listed;

     (4)  Provides that where a contract for sale to an owner-
          occupant is contingent on obtaining adequate financing,
          the deadline for obtaining financing is the time set
          forth in the contract, whereas this bill is silent on
          the deadline but requires a 30-day extension if
          financing is not obtained; and

     (5)  Excludes from application of the bill, projects that
          have published owner-occupant announcements prior to
          the bill's effective date, whereas this measure states
          its effective date, only.

Your Committee also notes that unlike this bill, H.B. No. 2310,
H.D. 1:

     (1)  Repeals the requirement that financial institutions and
          escrow companies notify owner-occupant apartment loan
          applicants of the status of the loan within 45 days of
          application, and take reasonable steps to verify the
          applicant's owner-occupant intention; and

     (2)  Uses the term "residential apartments" as opposed to
          "dwelling units."

     Your Committee has amended this bill so that it is
substantively and technically very similar to H.B. 2310 H.D. 1.
The bill has been further amended as recommended by the
Commission to increase flexibility.  The amendment allows
apartments designated for sale to owner-occupants to be listed
either in the first public report of the condominium project or
in the announcement or advertisement, as opposed to requiring
listing in the public report with the option of inclusion in the
announcement or advertisement.

     Your Committee has made additional technical, nonsubstantive
amendments for purposes of clarity, consistency, and style.


 
 
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     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. 3160, S.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 3160, S.D. 2, H.D. 1, and be referred to the
Committee on Finance.

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



                                   ______________________________
                                   RON MENOR, Chair