STAND. COM. REP. NO. 3289

Honolulu, Hawaii

RE: H.B. No. 1565

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred H.B. No. 1565, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

The purpose and intent of this measure is to exclude a homeowner-developer from the annual requirement to file a developer's report and pay a fee if the homeowner's development consists of not more than two units, one in which the developer resides and one for which the initial sale of the other unit has been completed.

Your Committee received testimony in support of this measure from the Office of Hawaiian Affairs, Hawaii First Realty LLC, Palehua Townhouse Association, and one individual.

Your Committee finds that the existing law governing condominiums characterizes a homeowner-developer who subdivides their property into two units under a condominium property regime for the purpose of living in one unit and renting out the other, as a developer of a condominium project. Further, a homeowner-developer in this situation is required to file an annual report and pay an annual fee until all units in the two-unit development have been sold, essentially subjecting them to a fee in perpetuity, as the homeowner-developer typically does not intend to sell the unit they are living in. Your Committee finds that, in these specific situations, the existing annual filing and fee requirements unduly burden homeowner-developers, and therefore this measure provides these specific homeowner-developers with much needed relief.

Your Committee has amended this measure by inserting an effective date of July 1, 2040, to encourage further discussion.

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 H.B. No. 1565, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1565, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

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

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JARRETT KEOHOKALOLE, Chair