STAND. COM. REP. NO. 2731

Honolulu, Hawaii

RE: S.B. No. 2876

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2876 entitled:

"A BILL FOR AN ACT RELATING TO COMMON INTEREST COMMUNITIES,"

begs leave to report as follows:

The purpose and intent of this measure is to prohibit planned community associations, condominium associations, or their boards of directors from expending association funds to enforce de minimis violations of association rules or regulations that do not pose risks to the health and safety of other members, units, or unit owners.

Your Committee received testimony in support of this measure from Hui ‘Oia‘i‘o and four individuals. Your Committee received testimony in opposition to this measure from the Hawaii Legislative Action Committee of the Community Associations Institute; Hawaii Council of Community Associations; Associa; Honolulu Tower AOAO; Sunset Kahili AOAO; CCV2 Board; Law Offices of Mark K. McKeller, LLLC; Kipuka at Hoakalei AOUO; and eight individuals.

Your Committee finds that it is not uncommon for certain planned community or condominium unit owners to be saddled with unreasonable legal fees, or for them to feel they are being unfairly targeted and "bullied" by specific individuals on a board of directors, for seemingly minor violations of bylaws or house rules. This measure would prohibit an association from using association funds to enforce minor violations, ameliorate the problem of alleged harassment perpetrated by single individuals on association boards, and discourage associations from turning day-to-day minor issues over to expensive attorneys.

Your Committee has heard the concerns raised in testimony that the existing definition of "de minimis infraction" as presently drafted is subjective and could be open to various interpretations. Accordingly, amendments to this measure are necessary to address this concern.

Your Committee has amended this measure by clarifying that a "de minimis infraction" means a technical violation of a bylaw, rule, or regulation that results in not more than three complaints from separate units within a calendar year or does not result in a fine of more than $500 per violation pursuant to the bylaws, rules, or regulations of the association.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2876, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2876, S.D. 1, and be placed on the calendar for Third Reading.

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

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ROSALYN H. BAKER, Chair