STAND. COM. REP. NO.  431

Honolulu, Hawaii

                , 2009

RE:   H.B. No. 202

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir:

     Your Committee on Housing, to which was referred H.B. No. 202 entitled:

"A BILL FOR AN ACT RELATING TO FORECLOSURES,"

begs leave to report as follows:

     The purpose of this bill is to protect the rights of a tenant of rental property by requiring 120-day notice of mortgage foreclosure to the tenant under a month-to-month tenancy by a successor-in-interest prior to the termination of the rental agreement and commencement of summary possession proceedings.  

     The Hawaii Association of REALTORS supported the intent of this bill.  The Legal Aid Society of Hawaii supported this measure with amendments.  The Hawaii Bankers Association opposed this bill.  The Hawaii Financial Services Association provided comments. 

     The intent of your Committee is to address the rights of tenants in foreclosure cases while balancing the interests of all stakeholders.  Accordingly, your Committee has amended this bill by:

(1)  Setting forth the acceptable methods of delivery of notice to the tenant or subtenant that a rental housing unit is in foreclosure;

(2)  Reducing the time period for notice from 120 to 45 days;

(3)  Changing the definition of "successor-in-interest" from a fee simple owner or owners of the property whose interest was acquired through foreclosure, to a person who acquired an interest in the property through foreclosure;

(4)  Providing that for power of sale foreclosures, the tenant is to be given notice 15 days before the actual sale of the mortgaged property;

(5)  Changing the effective date to July 1, 2009; and

(6)  Making technical, nonsubstantive amendments for style, clarity, and consistency.

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 202, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 202, H.D. 1, and be referred to the Committees on Consumer Protection & Commerce and Judiciary.

Respectfully submitted on behalf of the members of the Committee on Housing,

____________________________

RIDA CABANILLA, Chair