SB393 HD2

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 (Act 57), 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 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 However, the amendments made to the landlord-tenant code by Act 57 have been repealed.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 that adopts the most effective provisions of Act 57 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 tenants 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 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 date of postmark, 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 by this section need not be given if the action is based on the breach of a mediated agreement or other settlement agreement or is 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 on which 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 the ten calendar days;

(7) A warning in bold typeface print in substantially the following form: "If mediation is not scheduled within ten calendar days after receipt of this notice, regardless of whether the scheduled mediation session occurs within the 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 business 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. If filing an action for summary possession, the landlord shall be required to note in the summary possession complaint the status of the mediation or settlement effort and proof of sending or posting the ten-calendar-day notice to the mediation center.";

(8) Notice that the eviction may be subject to additional requirements and protections under federal or state 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-calendar-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 the means by which 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 has 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's or tenant's other rights and responsibilities under this chapter.

(h) The mediation may take place by means of remote communication, including two-way video 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 again participating in mediation.

[~~(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 $ 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 within the Hawaii public housing authority 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 tenants avoid eviction and maintain stable tenancies.

(b) Participants in the emergency rent relief program shall be eligible to receive rent relief payments after mediation. Participants shall be limited to receiving a maximum of $5,000 under the program and may elect to receive payment in one of the following methods:

(1) A one-time payment of $3,000 to be used for back rent, plus an additional four monthly payments of $500; or

(2) Ten monthly payments of $500.

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

(e) 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 the emergency rent relief program; provided that the rules, at a minimum, shall prohibit a tenant 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:

(1) For an emergency rent relief program to be made available to persons who are participating in the pre-litigation mediation pilot program, pursuant to section 521-68, Hawaii Revised Statutes, as amended by section 2 of this Act, for the purposes of helping tenants avoid eviction and maintain stable tenancies; and

(2) To fund the cost of administering the emergency rent relief program, including administrative and monitoring expenses incurred by the Hawaii public housing authority and the nonprofit organization intermediary recipient.

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 on June 30, 3000; provided that:

(1) Section 2 shall take effect on September 1, 2023; and

(2) 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 section 2 of this Act.

THE SENATE	S.B. NO.	393
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII		H.D. 2