STAND. COM. REP. NO. 2848

Honolulu, Hawaii

RE: S.B. No. 3107

S.D. 2

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. 3107, S.D. 1, 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, when processing an application to rent residential property, to charge an application screening fee up to a maximum of $25 for the cost of requesting a tenant report or credit report for a potential tenant; and

(2) Require landlords to refund any unused amount of the application screening fee and, upon request, provide a receipt of the fee and a copy of any report obtained via the screening process to the applicant.

Your Committee received testimony in support of this measure from the Department of Human Services, Department of Commerce and Consumer Affairs, State Council on Developmental Disabilities, Governor's Coordinator on Homelessness, Partners in Care, Institute for Human Services, Catholic Charities Hawai‘i, HOPE Services Hawai‘i, and one individual. Your Committee received testimony in opposition to this measure from the Hawai‘i Association of REALTORS and one individual.

Your Committee finds that existing law does not specifically regulate the nature and amount of application fees that landlords may charge prospective tenants. Additionally, it is not uncommon for landlords to charge application fees that do not correlate with the actual costs to obtain background and credit checks. For certain low-income individuals or those with multigenerational households, application costs can create a significant barrier to obtaining affordable housing, with no guarantee that they will be accepted. This measure therefore provides a balance between tenants and landlords in the application process.

Your Committee has amended this measure by:

(1) Clarifying that a landlord may charge an application fee at the time that an application is processed; and

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

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. 3107, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3107, S.D. 2.

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

________________________________

ROSALYN H. BAKER, Chair