STAND. COM. REP. NO. 81
Honolulu, Hawaii
, 2005
RE: S.B. No. 1132
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-Third State Legislature
Regular Session of 2005
State of Hawaii
Sir:
Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 1132 entitled:
"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"
begs leave to report as follows:
The purpose of this measure is to recodify the condominium laws governing the creation, alteration, and termination of condominium property regimes, the registration and administration of condominium projects, and protections for the purchasers of condominiums.
Testimony in support of this measure was received from the Real Estate Commission, Hawaii Association of Realtors, Community Associations Institute-Hawaii Chapter, and an individual. The Hawaii Bankers Association opposed the measure. The Hawaii Credit Union League submitted comments on the measure.
This measure represents a completion of the process of recodifying the State's condominium law, as authorized by Act 213, Session Laws of Hawaii 2003, that commenced with the enactment of Act 164, Session Laws of Hawaii 2004 (Act 164). Act 164 recodified the laws pertaining to condominium management and governance, and reserved for future enactment the provisions relating to the creation, alteration, and termination of condominium property regimes, the registration and administration of condominium projects, and protections for purchasers of condominiums. This measure proposes provisions relating to the latter, and among other things:
(1) Establishes different disclosure requirements for different types of condominium projects, including converted projects and projects built on agricultural lands;
(2) Simplifies the requirements and procedures relating to the developer's public report;
(3) Enhances consumer protection for purchasers of condominiums by requiring developers to meet certain requirements before using purchasers' funds, requiring the developer's public report to inform purchasers that their funds may be used to pay for project costs prior to project completion, and by permitting purchasers to cancel a contract if the developer fails to complete construction by the specified completion date;
(4) Clarifies a purchaser's rights with respect to cancellation and rescission of the sales contract; and
(5) Clarifies the duties and jurisdiction of the Real Estate Commission.
Additionally, this measure repeals the July 1, 2005 effective date for the provisions relating to condominium management and governance enacted in Act 164, and provides for the new condominium laws, in their entirety, to take effect on July 1, 2006. In order to support informational and educational activities related to the new laws, this measure appropriates moneys from the Condominium Education Trust Fund.
Your Committee has amended this measure:
(1) By deleting the amendments to section -149, Hawaii Revised Statutes, that would have:
(a) Authorized condominium associations to deposit funds into financial institutions that lack a presence in this State; and
(b) Required financial institutions holding association funds to maintain certain ratings under the Community Investment Act and Moody's Investors Service; and
(2) To provide that existing administrative rules establishing fees continue to remain in effect after the repeal of chapter 514A, Hawaii Revised Statutes, pending the adoption of new rules under the new statutory chapter governing condominiums.
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. 1132, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1132, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Housing,
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____________________________ RON MENOR, Chair |
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