Report Title:

Condominium Property Regimes

 

Description:

Authorizes association of apartment owners of a partially converted condominium to acquire the remaining lessor's interest upon written approval of 75% of the lessees in the project; requires association to sell remaining portion of the lessor's interest only to lessees of apartments to which the interest is appurtenant, or to the permitted assigns, heirs, or successor of the lessees.

HOUSE OF REPRESENTATIVES

H.B. NO.

2413

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CONDOMINIUM PROPERTY REGIMES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that it is necessary to amend the Hawaii Revised Statutes to address the powers of condominium associations in situations in which some lessees have already purchased their leased fee interests from the lessor.

The purpose of this Act is to empower condominium associations to purchase the remainder of the lessor's interest at the sole cost of the remaining lessees.

SECTION 2. Section 514C-22, Hawaii Revised Statutes, is amended to read as follows:

"[[]§514C-22[]] Power of association of apartment owners to negotiate, purchase, and sell lessor's interest. (a) The association of apartment owners may purchase the lessor's interest in the condominium project; provided that the declaration of condominium property regime shall either contain or be amended to include a provision authorizing the board of directors to effectuate such a purchase. If the lessor is also a condominium unit lessee, the lessor's lessee interest shall be disregarded in the computation of the percentage of condominium unit lessees needed to achieve the vote or written consent required to amend the declaration of condominium property regime.

(b) If the association of apartment owners is authorized to purchase the lessor's interest pursuant to this section, the following powers, in addition to any other existing powers, shall be conferred upon the association of apartment owners:

(1) To purchase or otherwise acquire, own, improve, use, and deal in and with the lessor's interest or any or all undivided interests therein;

(2) To incur liabilities, borrow money, and secure any of its obligations by mortgage or pledge all or any portion of its property, assessments, and funds to effectuate acquisition of the lessor's interest;

(3) To assess, as a common expense, the condominium unit lessees for the expenses incurred in acquiring the lessor's interest, or to service any debt associated therewith; and

(4) To sell the fee interest appurtenant to a condominium unit and acquired from the lessor by the association of apartment owners, to any condominium unit lessee or subsequent purchaser of such unit.

(c) No condominium unit lessee shall be compelled to purchase the portion of the fee interest of the property appurtenant to the lessee's condominium unit and acquired from the lessor by the association of apartment owners, but may instead pay lease rent to the association of apartment owners together with the lessee's share of the common expenses incurred in acquiring the fee interest to the land, including any debt associated therewith.

(d) If some but not all lessees have purchased the lessor’s interest appurtenant to their apartments directly from the lessor, then the association of apartment owners may purchase all of the remaining portion of the lessor's interest in accordance with subsection (b); provided that the lessees of apartments to which are appurtenant seventy-five per cent of the common interest appurtenant to the remaining leasehold apartments give their written consent thereto; provided further that all costs and expenses of acquiring the lessor’s interest, or to service any debt associated therewith, shall be separately assessed to the apartments of the remaining lessees in the same ratio that the common interest appurtenant to each remaining lessees’ apartment bears to the total common interest appurtenant to all of the remaining lessees’ apartments; provided further that the association of apartment owners shall sell the remaining portion of the lessor’s interest only to lessees of apartments to which the interest is appurtenant, or to the permitted assigns, heirs or successors of the lessees."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

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