Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 1716, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to require the parties to a mediation of a dispute between apartment owners and the association of apartment owners to be wholly responsible for their respective individual costs associated with participating in mediation, unless they agree otherwise. Joint costs shall be shared equally.

Testimony supporting this measure was received from the Hawaii Independent Condominium & Cooperative Owners, Hawaiiana Management Company, Ltd., and six individuals. Testimony citing concerns with this measure was received from the Hawaii Legislative Action Committee of the Community Associations Institute.

Your Committee finds that Hawaii's laws relating to condominium property regimes provides an adequate framework to resolve disputes between apartment owners and the respective association of apartment owners. The dispute resolution process is intended to be fair and just between the parties. This measure ensures that the costs of mediation shall be shared fairly among the parties participating unless agreed to otherwise.

Your Committee has amended this measure by replacing its contents with the Senate version, S.B. No. 2300, S.D. 1, which clarifies that each party shall be wholly responsible for its own costs of participating in mediation; unless at the end of the mediation process, both parties agree that one party shall pay all or a specified portion of the mediation costs.

In addition, this measure, as amended, takes effect on July 1, 2050, with the intent of encouraging additional discussion on the provisions of this measure as it continues through the legislative process.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1716, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1716, H.D. 1, S.D. 1, and be referred to the Committee on Judiciary.