Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2105 entitled:

begs leave to report as follows:

The purpose of this measure is to provide procedures for mediation of condominium management disputes.

Testimony in support of this measure was received from the Hawaii Independent Condominium & Cooperative Owners and fifteen individuals. Testimony in opposition was received from the Real Estate Commission, Community Associations Institute, Hawaii Realtors Association, and one individual.

Current law provides for mediation of disputes between an apartment owner and the board of directors in section 514A-121.5, Hawaii Revised Statutes (HRS). However, the law does not include any procedures, in contrast to arbitration procedures in section 514A-121, HRS, which essentially provides that the arbitration procedures be governed by rules adopted by the Real Estate Commission.

Although the Real Estate Commission objected to this measure, your Committee finds that the objections are based on differences in approach and on administration, which are not fatal to the measure.

Accordingly, your Committee has amended this measure by inserting the proposed new part into section 514A-121.5, HRS, as being more appropriate. As amended, this measure places the jurisdiction over the mediation process with the Office of Administrative Hearings of the Department of Commerce and Consumer Affairs rather than the Real Estate Commission.

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. 2105, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2105, S.D. 1, and be referred to the Committee on Ways and Means.