Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 394 entitled:

begs leave to report as follows:

The purpose of this bill is to:

Testimony in support of this measure was submitted by Hawaii Independent Condominium and Cooperative Owners, Hawaii Council of Associations of Apartment Owners, Hawaii Bankers Association, Hawaii Financial Services Association, and Community Associations Institute. The Mortgage Bankers Association testified in support of the intent of this bill and requested amendments.

Your Committee finds that AOAOs and mortgage lenders have made progress in resolving disputes regarding recovery of delinquent maintenance fees left outstanding due to foreclosure of the delinquent unit. Resolution began with the passing of Act 39, Session Laws of Hawaii 2000 (Act 39), which allowed a condominium association to collect up to six months of maintenance fees, to a maximum of $1,800, in the foreclosure of an apartment.

Your Committee believes that time and expenses will be saved by eliminating the requirement in Act 39 that the AOAO record the notice of lien, and by instead requiring only a notice of assessments owed.

Your Committee has amended this measure to reflect the language of H.B. No. 1339, H.D.1. The bill now provides that the mortgagee may require the AOAO to provide at no charge, a notice of the AOAO's intent to claim a lien. Furthermore, this bill no longer requires that the notice include a listing of the month or months of unpaid assessments.

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. 394, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 394, H.D. 1, and be placed on the calendar for Third Reading.