STAND. COM. REP. NO. 496-18

Honolulu, Hawaii

, 2018

RE: H.B. No. 1873

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1873 entitled:

"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

The purpose of this measure is to clarify the effect of a payment plan to resolve a nonjudicial foreclosure, including payment obligations, mediation requirements, and triggers for further default. This measure further establishes procedures for a condominium owner to submit disputed legal fees, penalties or fines, late fees, lien filing fees, or other charges, except common expense assessments, to the mediation process prior to payment.

The Hawaii Council of Associations of Apartment Owners dba Hawaii Council of Community Associations, Community Associations Institute Hawaii Chapter, Hui ‘Oia‘i‘o, Associa, and a few individuals testified in support of this measure. Anderson Lahne & Fujisaki, LLP and several individuals testified in opposition. One individual provided comments.

Your Committee has amended this measure by:

(1) Deleting the purpose section and provisions clarifying the effect of a payment plan to resolve a nonjudicial foreclosure;

(2) Preserving an association's ability to deduct and apply portions of common expense assessments to unpaid late fees, legal fees, fines, and interest; provided that the association adopts and distributes such policy on an annual basis and be included in any agreement for automatic withdrawal of assessments by the association;

(3) Amending requirements for an association's disclosure upon demanding payment from a unit owner;

(4) Removing language allowing a unit owner to seek mediation prior to paying disputed legal fees, penalties or fines, late fees, lien filing fees, or other charges, except common expense assessments;

(5) Changing the effective date to July 1, 2050, to promote further discussion; 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 Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1873, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1873, H.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROY M. TAKUMI, Chair