SB1439

PART I

SECTION 1. The legislature finds that many Hawaii residents continue to face challenges in paying their rent and face eviction. Act 57, Session Laws of Hawaii 2021, encouraged communication and facilitated mediation between landlords and tenants to help reduce summary possession cases. Research indicates that the mediation procedures created by Act 57, Session Laws of Hawaii 2021, were widely successful in substantially increasing the number of disputes that were settled in mediation without any summary possession case being filed and the number of settlements in which the parties agreed that the tenant could continue to reside in the dwelling unit. However, the amendments made to the landlord-tenant code by Act 57, Session Laws of Hawaii 2021, have been repealed.

The legislature further finds that the availability of rental relief is a key factor to ensuring housing stability and that combining rent relief with a robust pre-litigation mediation process is likely to lead to significantly better outcomes than mediation that starts only after litigation is filed or rent relief alone.

Accordingly, the purpose of this Act is to:

(1) Create a pilot program, adopting the most effective provisions of Act 57, Session Laws of Hawaii 2021, that:

(A) Extends the period for a notice of termination of the rental agreement from five business days to ten calendar days;

(B) Requires landlords to engage in mediation and delay filing an action for summary possession if a tenant schedules or attempts to schedule a mediation; and

(C) Requires landlords to provide specific information in the ten-calendar day notice to tenants, which shall also be provided to a mediation center that offers free mediation for residential landlord-tenant disputes; and

(2) Create an emergency rent relief program available to participants in pre-litigation mediation to provide resources that will help avoid eviction and maintain stable tenancies.

SECTION 2. Section 521-68, Hawaii Revised Statutes, is amended to read as follows:

"§521-68 Landlord's remedies for failure by tenant to pay rent[.]; pre-litigation mediation. (a) A landlord or the landlord's agent may, any time after rent is due, demand payment thereof and notify the tenant in writing that unless payment is made within a time mentioned in the notice[~~, not~~] as provided in subsection (b), no less than [~~five business~~] ten calendar days after receipt thereof, the rental agreement [~~will~~] shall be terminated. [~~If the tenant cannot be served with notice as required, notice~~] Notice may be given to the tenant by posting the same in a conspicuous place on the dwelling unit[.], and the notice shall be deemed received on the date of the posting. If the notice is mailed to the tenant via the United States Postal Service, properly addressed, and with appropriate postage, the notice shall be deemed to have been received two business days after mailing, unless the letter is returned to the landlord as undeliverable. If the tenant remains in default[,] after the expiration of the time stated in the notice, the landlord may thereafter bring a summary proceeding for possession of the dwelling unit or any other proper proceeding, action, or suit for possession[.], subject to subsections (b) through (i). The notice required in this section need not be given if the action is based on the breach of a mediated agreement or other settlement agreement or for a summary possession proceeding based on matters other than non-payment of rent. If the summary possession action is based on the breach of a settlement agreement or mediated agreement, the court shall not require any further mediation prior to trial.

(b) The ten-calendar day notice shall provide the following:

(1) The name of the landlord or the landlord's agent and the landlord's or landlord's agent's contact information, including, if possible, phone number, electronic mail address, and mailing address;

(2) The address of the dwelling unit subject to the rental agreement;

(3) The name and contact information of all tenants listed on the rental agreement, including phone number and, if possible, electronic mail address, and mailing address;

(4) The current amount of the rent due as of the date of the notice, after applying all rent paid from all sources;

(5) That a copy of the ten-calendar day notice being provided to the tenant is also being provided to the mediation center on the island where the dwelling unit of the tenant is located and, in accordance with subsection (c), in order for the mediation center to contact the landlord and tenant to attempt to schedule a mediation regarding the nonpayment of rent;

(6) That the landlord or landlord's agent may file an action for summary possession if the rent due is not paid and if mediation is not scheduled within ten calendar days after the tenant's receipt of the ten-calendar day notice, regardless of whether the scheduled mediation session occurs within such ten calendar days;

(7) A warning in bold typeface print that says: "If mediation is not scheduled within ten calendar days after receipt of this notice, regardless of whether the scheduled mediation session occurs within such ten-calendar-day period, then the landlord may file an action for summary possession after the expiration of the ten-calendar-day period. If mediation is scheduled before the expiration of the ten-calendar-day period, regardless of whether the scheduled mediation session occurs within the ten calendar days, then the landlord shall only file an action for summary possession after the expiration of twenty calendar days following the tenant's receipt of the ten-calendar day notice unless you (tenant) fail to attend or cancel mediation. If the ten-calendar day notice was mailed, receipt of notice shall be deemed to be two days after the date of the postmark. If the ten-calendar-day notice was posted on the premises, receipt of notice shall be deemed to be the date of posting. If an agreement is reached before the filing of an action for summary possession, whether through mediation or otherwise, then the landlord shall not bring an action for summary possession against the tenant for nonpayment of rent, except as provided in any agreement that may be reached or if any such agreement is breached. The landlord shall be required to note the status of the mediation or settlement effort and proof of sending or posting the ten-calendar-day notice to the mediation center in the action for summary possession in the summary possession complaint.";

(8) Notice that the eviction may be subject to additional requirements and protections under state or federal law and that the tenant is encouraged to seek the tenant's own legal advice regarding their rights and responsibilities; and

(9) That the landlord or landlord's agent shall engage in mediation if mediation is scheduled.

The judiciary shall prepare a notice form that may be used by landlords and landlords' agents to provide the information required by this subsection and make the form available on its website.

(c) Landlords or their agents shall provide the ten-calendar day notice to a mediation center on the island on which the dwelling unit of the tenant is located that offers free mediation for residential landlord-tenant matters. The mediation center shall contact the landlord or landlord's agent and the tenant to schedule the mediation. If a tenant schedules mediation within the ten-calendar day period and participates in the mediation, regardless of whether the scheduled mediation session occurs within the ten day period, the landlord shall only file a summary proceeding for possession after the expiration of twenty calendar days from the date of receipt of the ten-calendar day notice. If the tenant schedules mediation, the landlord shall participate.

(d) The summary possession complaint for nonpayment of rent shall include:

(1) A document or documents from the mediation center verifying that the landlord provided a copy of the required ten-calendar day notice to the mediation center or an affirmation from the landlord or the landlord's agent that the notice was provided to the applicable mediation center and by what means the notice was provided to the applicable mediation center; and

(2) If mediation is pending, the date on which the mediation is scheduled.

(e) If the mediation has not occurred as of, or been scheduled for a future date after, the return hearing date on the summary possession complaint, the court, in its discretion and based on a finding of good cause, may order a separate mediation.

(f) If there is any defect in the ten-calendar day notice described in subsection (b) provided by the landlord and the court determines the defect was unintentional or immaterial, the court may allow the landlord to cure the defect without dismissing the action for summary possession.

(g) Nothing in this section shall impact a landlord or tenant's other rights and responsibilities under the Residential Landlord-Tenant Code.

(h) The mediation may take place by means of remote communication or in person, or both.

(i) If the mediation does not result in an agreement, the landlord or landlord's agent may file an action for summary possession without participating in mediation again.

[~~(b)~~] (j) A landlord or the landlord's agent may bring an action for rent alone at any time after the landlord has demanded payment of past due rent and notified the tenant of the landlord's intention to bring such an action."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,250,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for the judiciary to contract for mediation services pursuant to section 2 of this Act.

The sums appropriated shall be expended by the judiciary for the purposes of this part.

PART II

SECTION 4. (a) There shall be established an emergency rent relief program available to participants in pre-litigation mediation pursuant to section 521-68, Hawaii Revised Statutes, as amended by this Act, to provide resources that will help avoid eviction and maintain stable tenancies.

(b) Participants in the emergency rent relief program shall receive payments after mediation as follows:

(1) A one-time payment of $3,000 to be used for back rent; and

(2) Four $500 monthly payments;

provided that if a participant elects not to receive the one-time payment of $3,000, the participant may receive a fifth monthly payment of $500; provided further that the total amount of payments per year shall not exceed $11,000,000.

(c) The Hawaii public housing authority may enter into memoranda of agreement with the counties or specialized non-profit organizations as necessary to implement this section.

(d) The Hawaii public housing authority shall be exempt from chapter 103D, Hawaii Revised Statutes, in selecting a qualified non-profit organization to administer the emergency rent relief program and shall, without regard to chapter 91, , Hawaii Revised Statutes, establish rules and qualification standards for participants of the pre-litigation mediation program pursuant to section 521-68, Hawaii Revised Statutes, as amended by this Act.

(e) The Hawaii public housing authority shall establish rules pursuant to chapter 91, Hawaii Revised Statutes, to implement the emergency rent relief program pursuant to this section; provided that the rules, at a minimum, shall prohibit a person from participating in the emergency rent relief program more than once.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for an emergency rent relief program to be made available only to participants in the pre-litigation mediation program, pursuant to section 4 of this Act, for the purposes of avoiding eviction and maintaining stable tenancies.

The sums appropriated shall be expended by the Hawaii public housing authority for the purposes of this Act.

PART III

SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon approval; provided that sections 3 and 5 shall take effect on July 1, 2023; provided further that this Act shall be repealed on June 30, 2025, and section 521-68, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act.

INTRODUCED BY:

_____________________________

THE SENATE	S.B. NO.	1439
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII