REPORT TITLE:
Real Property Appraisals


DESCRIPTION:
Makes optional the use of USPAP in determining fair market value
in lease renegotiations.  Provides that fair market value that is
determined to be less than current lease rent amount prevails
over contract provision barring reduction of lease rent.  Makes
Act effective January 1, 2004. (SD1) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        873
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO REAL PROPERTY APPRAISALS. 


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

 1      SECTION 1.  Section 519-1, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  Whenever any agreement or document for the lease of
 
 4 private lands provides for the renegotiation of the rental amount
 
 5 or other recompense during the term of the lease and such
 
 6 renegotiated rental amount or other recompense is based,
 
 7 according to the terms of the lease, in whole or in part upon the
 
 8 fair market value of the land, or the value of the land as
 
 9 determined by its highest and best use, or words of similar
 
10 import, such value, for the purposes of determining the amount of
 
11 rental or other recompense, shall be calculated upon the use to
 
12 which the land is restricted by the lease document[.]; provided
 
13 that:
 
14      (1)  Fair market value may be determined in conformance with
 
15           the uniform standards of professional appraisal
 
16           practice as adopted by the department of commerce and
 
17           consumer affairs as set forth in section 10-13.6(b) and
 
18           the first sentence of section 171-18.5(b); and
 
19      (2)  Fair market value that is determined to be less than
 

 
Page 2                                                     873
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           the rental amount currently being paid shall prevail
 
 2           over any existing contract provision which bars the
 
 3           lowering of lease rent upon renegotiation."
 
 4      SECTION 2.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 3.  This Act, upon its approval, shall take effect
 
 7 on January 1, 2004.