STAND

STAND. COM. REP. NO.78

Honolulu, Hawaii

, 2003

RE: S.B. No. 1650

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1650 entitled:

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

begs leave to report as follows:

The purpose of this measure is to:

(1) Preclude the nullification of a bulk sale purchase or conveyance of leased fee interests in a partially converted condominium, and of related obligations and assessments, if the sale or conveyance was undertaken by the lessor and association of apartment owners (AOAO) in good faith; and

(2) Limit the liability of lessors and AOAOs for noncompliance with the law in such purchases or conveyances, to transactions involving knowing and intentional noncompliance, gross negligence, or wilful misconduct.

The Hawaii Council of Associations of Apartment Owners testified in support of this measure.

Act 199, Session Laws of Hawaii 2002, established requirements for the bulk sale purchase of leased fee interests in a partially converted condominium by AOAOs, including the requirement that the units' lessees be provided the first opportunity to purchase the leased fee interest from the AOAO. This measure provides limited protection for lessors and AOAOs against claims that may be asserted against them in connection with the bulk sales.

Your Committee has amended this measure by:

(1) Deleting the last new subsection in the measure as received to avoid duplication and redundancy;

(2) Inserting an effective date of July 1, 2050, to facilitate further review and discussion of this issue; and

(3) Making technical, nonsubstantive amendments for clarity and to reflect preferred drafting style.

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 S.B. No. 1650, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1650, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.

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

		____________________________ RON MENOR, Chair