Allows condominium associations in specific situations, to
purchase a lessor's remaining interest at the sole cost of the
remaining lessees.

THE SENATE                              S.B. NO.           2350
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that it is necessary to
 2 amend the Hawaii Revised Statutes to address the powers of
 3 condominium associations in situations in which some lessees have
 4 already purchased their leased fee interests from the lessor.
 5 The purpose of this Act is to empower condominium associations to
 6 purchase the remainder of the lessor's interest at the sole cost
 7 of the remaining lessees.
 8      SECTION 2.  Section 514C-22, Hawaii Revised Statutes, is
 9 amended to read as follows:
10      "[[]514C-22[]]  Power of association of apartment owners to
11 negotiate, purchase, and sell lessor's interest.(a)  The
12 association of apartment owners may purchase the lessor's
13 interest in the condominium project; provided that the
14 declaration of condominium property regime shall either contain
15 or be amended to include a provision authorizing the board of
16 directors to effectuate such a purchase.  If the lessor is also a
17 condominium unit lessee, the lessor's lessee interest shall be
18 disregarded in the computation of the percentage of condominium
19 unit lessees needed to achieve the vote or written consent

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                                     S.B. NO.           2350

 1 required to amend the declaration of condominium property regime.
 2      (b)  If the association of apartment owners is authorized to
 3 purchase the lessor's interest pursuant to this section, the
 4 following powers, in addition to any other existing powers, shall
 5 be conferred upon the association of apartment owners:
 6      (1)  To purchase or otherwise acquire, own, improve, use,
 7           and deal in and with the lessor's interest or any or
 8           all undivided interests therein;
 9      (2)  To incur liabilities, borrow money, and secure any of
10           its obligations by mortgage or pledge all or any
11           portion of its property, assessments, and funds to
12           effectuate acquisition of the lessor's interest;
13      (3)  To assess, as a common expense, the condominium unit
14           lessees for the expenses incurred in acquiring the
15           lessor's interest, or to service any debt associated
16           therewith; and
17      (4)  To sell the fee interest appurtenant to a condominium
18           unit and acquired from the lessor by the association of
19           apartment owners, to any condominium unit lessee or
20           subsequent purchaser of such unit.
21      (c)  No condominium unit lessee shall be compelled to
22 purchase the portion of the fee interest of the property
23 appurtenant to the lessee's condominium unit and acquired from

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                                     S.B. NO.           2350

 1 the lessor by the association of apartment owners, but may
 2 instead pay lease rent to the association of apartment owners
 3 together with the lessee's share of the common expenses incurred
 4 in acquiring the fee interest to the land, including any debt
 5 associated therewith.
 6      (d)  If some but not all lessees have purchased the lessor's
 7 interest appurtenant to their apartments directly from the
 8 lessor, then the association of apartment owners may purchase the
 9 remaining portion of the lessor's interest in accordance with
10 514C-22(b); provided that the lessees of apartments to which are
11 appurtenant seventy-five per cent of the common interest
12 appurtenant to the remaining leasehold apartments give their
13 written consent thereto; and provided that all costs and expenses
14 of acquiring the lessor's interest, or to service any debt
15 associated therewith, shall be separately assessed to the
16 apartments of the remaining lessees in the same ratio that the
17 common interest appurtenant to each remaining lessees' apartment
18 bears to the total common interest appurtenant to all of the
19 remaining lessees' apartments."
20      SECTION 3.  Statutory material to be repealed is bracketed.
21 New statutory material is underscored.
22      SECTION 4.  This Act shall take effect upon its approval.
24                       INTRODUCED BY:  ___________________________