Condominiums; Lease Rents

Requires the association of apartment owners to represent all
lessees in lease rent negotiations, that lessees are to bear the
cost of renegotiations, and that costs may be collected in the
same manner as common expenses.  (HB2846 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that condominium governing
 2 documents, and condominium apartment leases or ground leases,
 3 contain inconsistencies and ambiguities concerning responsibility
 4 for lease rent renegotiation that have become the source of
 5 disputes and litigation between associations and their members,
 6 and between association members.  The legislature further finds
 7 that the condominium association is best equipped to conduct
 8 these lease rent renegotiations, but that costs should be borne
 9 only by those association members whose apartments are in
10 leasehold at that time.
11      SECTION 2.  Chapter 514A, Hawaii Revised Statutes, is
12 amended by adding a new section to be appropriately designated
13 and to read as follows:
14      "514A-     Lease rent renegotiation.  (a)  Notwithstanding
15 any provision in the declaration or bylaws of any property
16 subject to this chapter, any lease or sublease of the property or
17 of an apartment, or an undivided interest in the land to an
18 apartment owner, whenever any lease or sublease of the property,
19 an apartment, or an undivided interest in the land to an
20 apartment owner provides for the periodic renegotiation of lease

Page 2                                                     2846
                                     H.B. NO.           H.D. 1

 1 rent thereunder, the association of apartment owners shall
 2 represent the apartment owners in all negotiations and
 3 proceedings, including but not limited to appraisal or
 4 arbitration, for the determination of lease rent as a common
 5 expense of the association.
 6      (b)  If some, but not all of the apartment owners have
 7 purchased the leased fee interest appurtenant to their
 8 apartments, all costs and expenses of the renegotiation shall be
 9 assessed to the remaining lessees in the same proportion that the
10 common interest appurtenant to each lessee's apartment bears to
11 the common interest appurtenant to all lessees' apartments.  The
12 unpaid amount of this assessment shall constitute a lien upon the
13 lessee's apartment, which may be collected in accordance with
14 sections 514A-90 and 514A-94 in the same manner as an unpaid
15 common expense."
16      SECTION 3.  New statutory material is underscored.
17      SECTION 4.  This Act shall take effect upon its approval.