HOUSE OF REPRESENTATIVES

H.C.R. NO.

161

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

HOUSE CONCURRENT

RESOLUTION

 

 

ENCOURAGING THE REAL ESTATE COMMISSION TO MODIFY AND ADOPT RULES TO REFLECT CHANGES IN THE CONDOMINIUM LAW UNDER CHAPTER 514B, HAWAII REVISED STATUTES.

 

 


     WHEREAS, during the 2004, 2005, and 2006 legislative sessions, the Legislature passed several acts (Act 164, Session Laws of Hawaii 2004; Act 93, Session Laws of Hawaii 2005; and Act 273, Session Laws of Hawaii 2006) that revised the "Condominium Property Act", chapter 514A, Hawaii Revised Statutes (HRS), and recodified it as chapter 514B, Hawaii Revised Statutes, effective July 30, 2006; and

 

     WHEREAS, the intent of the recodification was to "update, clarify, organize, deregulate, and provide for consistency and ease of use of the condominium property regimes law", as directed by Act 213, Session Laws of Hawaii 2000, which called for a review of Hawaii's condominium property regimes laws in preparation for the recodification; and

 

     WHEREAS, as also explained by Act 213, two of the objections to chapter 514A, HRS, were that it is "overly regulatory" and "hinders development"; and

 

     WHEREAS, in order to permit the Real Estate Commission to provide guidance regarding the implementation of the new Condominium Property Act, the Legislature enacted section 514B‑61, HRS, in Act 93, Session Laws of Hawaii 2005, authorizing the Real Estate Commission to "[a]dopt, amend, and repeal rules pursuant to chapter 91[, Hawaii Revised Statutes]"; and

 

     WHEREAS, the Legislature finds that except for an additional subchapter relating to replacement reserves that was added in 1995, the current administrative rules relating to condominiums, chapter 107, Hawaii Administrative Rules, have not been updated since 1981; and

 

     WHEREAS, notwithstanding that two and one-half years have elapsed since the new Condominium Property Act took effect, the Real Estate Commission has not yet adopted administrative rules that pertain to chapter 514B, HRS, nor has it begun to do so; and

 

     WHEREAS, furthermore, section 16-107-1, Hawaii Administrative Rules (HAR), states that chapter 107, HAR, is "intended to clarify and implement chapter 514A, HRS" and no mention is made of the chapter's applicability to chapter 514B, HRS; and

 

     WHEREAS, instead of updating its administrative rules, the Real Estate Commission has been following its long-standing practice of issuing "nonbinding" opinions, some of which interpret statutory provisions of chapter 514B, HRS; and

 

     WHEREAS, these nonbinding opinions are issued for specific projects during monthly Condominium Review Committee and Real Estate Commission meetings that are not part of the rulemaking procedures as established under chapter 91, HRS; and

 

     WHEREAS, it has been reported that, these "nonbinding" opinions are used by the Real Estate Commission to interpret the questions of developers, their attorneys, and Real Estate Commission private consultants for purposes of the condominium public report application process, and that effective dates for condominium public reports are not issued except in compliance with these nonbinding opinions; and

 

     WHEREAS, the Legislature is concerned that, by issuing such nonbinding opinions in lieu of adopting administrative rules, and then relying on these nonbinding opinions for future decisions, the Real Estate Commission may be engaging in rulemaking without adhering to chapter 91, HRS; and

 

     WHEREAS, the Legislature is also concerned that the practice of issuing a nonbinding opinion based upon a unique set of facts presented at a Real Estate Commission hearing and then applying the opinion to other projects may lead to situations where precedential weight is ascribed to a decision merely because it is the first to be heard by the Real Estate Commission and not because the decision is truly generally applicable to other projects; and

 

     WHEREAS, the Legislature believes that it would be far more beneficial to developers, their attorneys, and Real Estate Commission private consultants for the Real Estate Commission to engage in public rulemaking pursuant to chapter 91, HRS, in order to assure that various views are heard, rather than issuing nonbinding opinions based on the argument of only one developer or attorney presenting his or her case at a Real Estate Commission meeting; and

 

WHEREAS, the Legislature believes that engaging in the rulemaking procedures under chapter 91, HRS, will ensure that the Real Estate Commission adheres to the law and allows input from the public to assure that chapter 514B, HRS, does, in fact, "provide for consistency and ease of use of the condominium property regimes law", as directed by Act 213; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2009, the Senate concurring, that the Real Estate Commission is encouraged to draft, adopt, and implement revised or additional administrative rules under chapter 107, HAR, to reflect changes in the condominium law under chapter 514B, HRS, by no later than December 31, 2009; and

 

     BE IT FURTHER RESOLVED that the Chair of the Real Estate Commission is requested to report on the progress made to updating chapter 107, HAR, to the Legislature not later than twenty days before the convening of the Regular Session of 2010; and

 

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Commerce and Consumer Affairs and the Chair of the Real Estate Commission.

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title: 

ADMINISTRATIVE RULES; CONDOMINIUMS; REAL ESTATE COMMISSION