STAND. COM. REP. NO. 829

Honolulu, Hawaii

RE: S.B. No. 1201

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1201 entitled:

"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Require condominium associations to register on an annual basis, rather than on a biennial basis;

(2) Add an additional annual condominium education trust fund fee to be used to support the annual registration with attached documents of the association;

(3) Amend the documents required for association registration;

(4) Broaden the list of documents an association shall maintain; and

(5) Amend the requirements and procedures for a condominium association to provide association documents to unit owners.

Your Committee received testimony in support of this measure from the Waikiki Neighborhood Board, Kokua Council, Hui ‘Oia‘i‘o, and eleven individuals. Your Committee received testimony in opposition to this measure from the Legislative Action Committee of the Community Associations Institute, Hawaii Chapter; Hawaii Council of Associations of Apartment Owners dba Hawaii Council of Community Associations; Honolulu Tower Townhouse Association; Palehua Hale AOAO; and ten individuals. Your Committee received comments on this measure from the Real Estate Commission.

Your Committee finds that existing law requires condominiums to register with the Real Estate Commission on an biennial basis. However, due to board turnover, owners moving in and out of the condominiums, and other factors, the registration information the Real Estate Commission has for condominiums, including names of the board members, or management company agents, can quickly become out of date. Up to date information about a condominium and its finances is important for a purchaser of a unit in the condominium. Therefore, this measure requires condominiums to register more frequently on an annual basis and makes other amendments improving condominium associations' transparency and accountability.

Your Committee acknowledges the concerns raised in testimony that this measure, as currently drafted, requires the Real Estate Commission and Department of Commerce and Consumer Affairs to maintain a database, which is partially duplicative and could potentially contain personal identifiable information protected by federal privacy laws. Accordingly, amendments to this measure are necessary to address these concerns.

Your Committee has amended this measure by:

(1) Deleting language that would have required the Real Estate Commission and Department of Commerce and Consumer Affairs to maintain a publicly available and searchable database on the Department's website containing the registration information;

(2) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(3) 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. 1201, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1201, 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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JARRETT KEOHOKALOLE, Chair