STAND. COM. REP. NO.543
Honolulu, Hawaii
, 2001
RE: H.B. No. 79
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 79 entitled:
"A BILL FOR AN ACT RELATING TO REAL PROPERTY DISCLOSURES,"
begs leave to report as follows:
The purpose of this bill, as received by your Committee, is to amend a section in chapter 467, Hawaii Revised Statutes (HRS), Real Estate Brokers and Salespersons, and various provisions of chapter 508D, HRS, Mandatory Seller Disclosures, to make the law more workable by:
(1) Providing that a licensed real estate broker or salesperson has adequately performed the duty to disclose material facts under chapter 467 if the licensee has complied with chapter 508D, HRS, governing mandatory seller disclosures in residential real estate transactions;
(2) Amending the definition of "disclosure statement" in chapter 508D to:
(A) Remove the requirement that material information in documents recorded in the Bureau of Conveyances must be disclosed; and
(B) Add to the material facts that must be included in the statement, those under section 508D-15, HRS, pertaining to the location of the property relative to flood hazard, tsunami, and other similar areas;
(3) Amending the definition of "material fact" in chapter 508D to replace the reference to facts that "materially" affect the value of the property, with facts "specific to the property, that directly, substantially, and adversely" affect property value;
(4) Providing that the buyer's right to rescind a contract based on material information in an amended disclosure statement under section 508D-13, HRS, does not apply if the sale has been recorded;
(5) Providing that the seller of a residential property has no duty under chapter 508D to examine public records when preparing a disclosure statement;
(6) Amending chapter 508D to remove from information that may be included among information disclosed in good faith or with due care, by the seller, the "approximation" of information, provided when sufficient information is not reasonably available to the seller; and
(7) Replacing the chapter 508D requirement that absentee owners provide approximation information about a property when the owner lacks the requisite personal knowledge, with the requirement that they give the buyer notice of their lack of personal knowledge.
The Hawaii Association of Realtors testified in favor of the measure. The Real Estate Commission, Regulated Industries Complaints Office of the Department of Commerce and Consumer Affairs, and Pacific Realty Consultants commented on the bill.
Your Committee has amended this bill by removing the amendments made in the bill to:
(1) Chapter 467, real estate broker and salesperson disclosure requirements; and
(2) Chapter 508D, other than those relating to absentee owners.
Your Committee believes that an absentee owner selling residential property should disclose any material information about the property of which the absentee owner has personal knowledge. For this reason, your Committee has amended this bill by replacing amendments to section 508D-10, HRS, that provides for limited absentee owner disclosures, with a section repealing section 508D-10. Your Committee has retained a section of the original bill that subjects absentee owners to all requirements of chapter 508D.
Technical, nonsubstantive amendments have also been made for purposes of 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. 79, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 79, 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,
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____________________________ KENNETH T. HIRAKI, Chair |
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