Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 36
                                        S.D. 2

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Judiciary, to which was referred S.B. No.
36, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill, as received by your Committee, is
to authorize condominium associations to: collect through liens
delinquent maintenance fees; assess arrearages upon tenants and
terminate utilities provided to occupants; and allow associations
to invest funds in out-of-state financial institutions.

     Your Committee finds that delinquent maintenance fees are a
continuing problem for the condominium associations and their
respective governing boards are responsible for ensuring the
financial solvency of the associations and the provision of
services guaranteed to the owners and occupants.  Your Committee
further finds that existing law requires associations to maintain
a certain level of revenue in a reserve fund in anticipation of
large expenditures for common-area maintenance and improvements,
which expenses should be borne by all owners.   Your Committee is
concerned that the provisions which would allow associations to
assess tenants for unpaid maintenance fees inappropriately
reaches beyond the scope of the contractual agreement between the
owner and the tenant.  Thus, your Committee believes that a
process needs to be established through the landlord tenant code
if associations seek remedy from the tenant for arrearages. 

                                   STAND. COM. REP. NO. 845
                                   Page 2

     Upon further consideration, your Committee has amended this
measure by:

     (1)  Allowing a written notice to be sent to the owner,
          tenant, and mortgagee regarding termination of
          utilities for non-payment of maintenance fees;

     (2)  Changing the provision allowing association liens to be
          prior to any mortgages, to allowing association liens
          in an unspecified chronology to mortgages;

     (3)  Changing the period of recovery of unpaid assessments
          from six months preceding any legal collection action
          to an unspecified period preceding such action;

     (4)  Giving judicial foreclosure actions priority over
          actions by the association to make collections;

     (5)  Requiring the mortgagee of record or other purchaser
          upon transfer of title to pay the apartment's share of
          assessments within an unspecified time after the
          hearing at which the sale is confirmed;

     (6)  Deleting the provisions which allow the association to
          collect arrearages from tenants; and

     (7)  Making technical, non-substantive changes for the
          purposes of clarity and style. 

     As affirmed by the record of votes of the members of your
Committee on Judiciary that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
36, S.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as S.B. No. 36, S.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary,

                                   AVERY B. CHUMBLEY, Co-Chair

                                   MATTHEW M. MATSUNAGA, Co-Chair