Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 2210, S.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to repeal the current condominium law and enact a comprehensively revised and updated version. The bill also makes a $150,000 appropriation from the Condominium Management Education Fund, to conduct educational activities.

Testimony in support of this bill was received from the Real Estate Commission (Commission), American Resort Development Association-Hawaii, A&B Properties, Inc., Community Associations Institute Hawaii, Hawaii Association of Realtors, Honolulu Board of Realtors, Guaranty Escrow Services, Inc., Title Guaranty of Hawaii, Inc., Neely & Anderson LLP, Hawaii Chapter of the National Association of Industrial and Office Properties, Pacific Realty Consultants, and several individuals.

The Hawaii Council of Associations of Apartment Owners and an individual testified in support and suggested amendments. The Judiciary supported the mediation provisions of the bill and suggested amendments. The Hawaii Bankers Association supported the bill but opposed language allowing the deposit of association funds out-of-state.

The Sierra Club, Hawaii Chapter, opposed the portion of the bill regarding the installation of solar devices. The Hawaii Independent Condominium & Cooperative Owners and a number of concerned individuals opposed the bill stated concerns, and requested amendments. Yacht Harbor Towers and a number of individuals commented and requested amendments.

Your Committee finds that this legislation was prepared in response to Act 213, Session Laws of Hawaii 2000. Act 213 directed the Commission to conduct a review of Hawaii's condominium property regimes law, make findings, formulate recommendations for recodification of the law, and develop draft legislation consistent with its review and recommendations. The Commission published its final report on December 31, 2003.

Your Committee heard hours of testimony from condominium developers, managers, and owners, as well as from members of the legal and financial community who are experienced in this area. It was clear that the bill represents an enormous effort by a very talented collection of hardworking individuals.

It was also obvious that an undertaking of this magnitude, which affects 25 percent of Hawaii's households, will not easily achieve a consensus on all issues. Such a consensus is particularly unlikely to occur in the relatively short time that the report has been available.

Your Committee has amended this bill by deleting all of the bill's substantive provisions, except for the appropriation for educational purposes. This is a tactical decision and not a judgment on the bill's merits. By deleting these provisions, your Committee maximized the differences between the House and Senate versions and thereby maximized the areas that can continue to be discussed through the balance of this legislative session.

In addition, an amendment was made to reflect that this House draft was reported out by your Committee. Finally, the effective date of this bill was changed to July 1, 2099.

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. 2210, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2210, S.D. 2, H.D. 1, and be referred to the Committee on Finance.