STAND. COM. REP. NO. 2373

Honolulu, Hawaii

RE: S.B. No. 2336

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 S.B. No. 2336 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 that condominium renters who prevail in a lawsuit for a violation of the Residential Landlord-Tenant Code be awarded reasonable attorneys' fees and costs and threefold damages; and

(2) Require the Real Estate Commission to:

(A) Establish a Condominium Association Board Oversight Task Force to ensure transparency and consistency in the management of condominiums;

(B) Report to the Legislature before the Regular Session of 2025; and

(C) Dissolve the Task Force on an unspecified date.

Your Committee received testimony in support of this measure from the Kokua Council, Legal Aid Society of Hawaiʻi, and three individuals.

Your Committee received testimony in opposition to this measure from the Hawaiʻi Real Estate Commission; Community Associations Institute; Palehua Townhouse Association; Hawaii First Realty LLC; Sky Tower Apartments; Law Offices of Mark K. McKellar, LLC; and seventeen individuals.

Your Committee finds that there is a need for greater oversight of condominium association boards and landlords. Currently, there is little, if any, accountability when condominium association boards wrongfully levy fines, initiate foreclosures, delay renovations, and take other adverse actions against unit owners. Therefore, this measure will help deter condominium association boards from committing acts of malfeasance by awarding reasonable attorneys' fees, costs, and threefold damages to condominium renters who prevail in a lawsuit for a violation of the Residential Landlord-Tenant Code.

Notwithstanding, your Committee has heard the concerns raised by testifiers that the objectives of the proposed task force appear to be duplicative in scope to the Condominium Property Regime Task Force established by Act 189, Session Laws of Hawaii 2023. Therefore, amendments to this measure are necessary to address this concern.

Accordingly, your Committee has amended this measure by:

(1) Deleting language that would have established a Condominium Association Board Oversight Task Force;

(2) Amending section 1 to reflect its amended purpose;

(3) Inserting an effective date of July 1, 2040, to encourage further discussion; and

(4) 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. 2336, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2336, S.D. 1, and be referred to your Committees on Judiciary and 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