STAND. COM. REP. NO. 519-20

Honolulu, Hawaii

, 2020

RE: H.B. No. 2195

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 2195 entitled:

"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

The purpose of this measure is to provide an exemption from the condominium developer annual reporting requirements for developers of a condominium consisting of only two units, one in which the developer resides and one which is sold.

Your Committee received testimony in support of this measure from the Hawaii Real Estate Commission, Community Associations Institute, Associa, Country Club Village, Hawaii Council for Associations of Apartment Owners, and five individuals. Your Committee received testimony in opposition to this measure from two individuals. Your Committee received comments on this measure from one individual.

Your Committee finds that homeowners whose developments consist of as few as two units under a condominium property regime are considered developers for purposes of the Condominium Property Act. Under the Condominium Property Act, developers are required to file an annual report and pay an annual fee until all units in a development have been sold. This requirement unduly burdens homeowner-developers who permanently reside on their property and do not intend to sell their unit in the development. This measure will provide relief in these specific instances from the burdensome annual filing and fee requirements.

Your Committee has amended this measure by:

(1) Specifying that the exemption from the annual report requirement applies to all subsequent annual reports after filing an annual report notifying that the initial sales of all units have been completed;

(2) Clarifying that the exemption for two-unit developers who occupy one unit in a condominium project satisfies the requirements for an exemption from annual reports;

(3) Changing its effective date to July 1, 2050, to encourage further discussion; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

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. 2195, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2195, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

ROY M. TAKUMI, Chair