STAND. COM. REP. NO. 2947

Honolulu, Hawaii

RE: S.B. No. 2877

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 Judiciary, to which was referred S.B. No. 2877 entitled:

"A BILL FOR AN ACT RELATING TO THE RESIDENTIAL LANDLORD-TENANT CODE,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Allow a landlord or landlord's agent to charge an application screening fee at the time a rental application is processed for a residential property;

(2) Cap the amount of an application screening fee at $25 and prohibit fees to be charged for each member of a household;

(3) Require the landlord or landlord's agent to provide a receipt for payment of the application screening fee and copy of any report obtained, if requested by the applicant, and within ten days of the applicant's request; and

(4) Require the landlord or landlord's agent to return any unauthorized fee amounts to the applicant.

Your Committee received testimony in support of this measure from the Governor's Coordinator on Homelessness; Department of Commerce and Consumer Affairs; Department of Human Services; Partners in Care, Oahu's Continuum of Care; Catholic Charities Hawai‘i; HOPE Services Hawai‘i; and two individuals. Your Committee received testimony in opposition to this measure from the Hawaii Association of REALTORS and one individual.

Your Committee finds that application screening fees may be a significant barrier to housing for low-income residents, including elderly persons and individuals and families who are homeless or on the brink of homelessness. Excessive application fees are particularly egregious in those circumstances when a landlord or the landlord's agent receives numerous applications for one apartment, most of which are not seriously considered. Rather, the landlord or the landlord's agent takes advantage of their bargaining position to create a supplemental source of income merely by screening potential tenants. This measure sets a limit on the amount that could be charged to a prospective tenant, while still enabling landlords to be compensated for the expense associated with credit checks.

Your Committee has amended this measure by specifying that the landlord or the landlord's agent shall return to the applicant any amount of the application screening fee that is not used for the purposes authorized within thirty days after the landlord has submitted screening requests.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2877, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2877, S.D. 1.

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

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KARL RHOADS, Chair