THE SENATE

S.B. NO.

1258

TWENTY-SEVENTH LEGISLATURE, 2013

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO REAL ESTATE APPRAISERS.

 

 

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

 


SECTION 1. The legislature finds a lack of openness and transparency exists in the implementation of Act 227, Session Laws of Hawaii 2011 (Act 227), which was codified as section 466K-6, Hawaii Revised Statutes.

Act 227 requires appraisers acting as arbitrators to fully report the basis for an award and to certify compliance with the nationally accepted Uniform Standards of Professional Appraisal Practice standards when valuing properties and determining market value or market rent. Compliance with the Uniform Standards of Professional Appraisal Practice ensures adherence to professional standards that would protect the parties to an arbitration and the consumers of the State.

The legislature also finds that Hawaii has relatively few commercial appraisers who specialize in these matters and, consequently, these individuals or firms are the exclusive determiners of the market value or market rents of leasehold property in Hawaii. This results in members of the same profession gathering and selecting market data, presenting that data to arbitration panels as expert witnesses, and then deciding the matter as appointed arbitrators.

The legislature further finds that since the passage of Act 227, confidentiality clauses have been incorporated into agreements that govern individual arbitration panels. Inclusion of these confidentiality clauses frustrates the legislature's intent in enacting Act 227 and works to the detriment of consumers because valuable market data is wilfully withheld from public use.

Real estate transactions that occur as sales transactions are recorded with the bureau of conveyances; any interested party may request a copy of a recorded real estate transaction from the bureau. Financial institutions, real estate firms, buyers, and sellers all take advantage of this data prior to participating in the market. Access to this information allows participants in the real estate market to better understand the volume and the value of that market in an open and transparent manner, allowing the market to function more efficiently.

In the resetting of industrial and commercial leasehold rents, recordation of an arbitration award and access to the record of the award at the bureau of conveyances would ensure public access to data that is currently unavailable, despite the enactment of Act 227. For the leasehold market to function with openness and transparency, and to further protect consumers in the State of Hawaii, the legislature finds that arbitration awards and reports should be available to all interested participants in the market.

The purpose of this Act is to:

(1) Improve and protect the process by which real estate appraisers, when acting as arbitrators to determine fair market value, fair market rent, or fair and reasonable rent of leasehold property, fully and publicly record arbitration awards along with the record of the arbitration award and any supplementary, dissenting, or explanatory opinions as required by section 466K-6, Hawaii Revised Statutes; and

(2) Improve the economy and protect the interests of the people of Hawaii by making data pertinent to industrial and commercial ground lease valuations and rents available to the general public.

SECTION 2. Chapter 466K, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"466K-   Arbitration awards; recordation. A real estate appraiser certified or licensed under this chapter who is acting as an arbitrator shall record all arbitration awards, the records of the arbitration awards, if separately issued, and any supplementary, dissenting, or explanatory opinions with the bureau of conveyances within ninety days of the determination of the arbitration award and the notification of its determination to the parties."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

 


 


 

Report Title:

Real Estate Appraisers; Arbitration Awards; Recordation

 

Description:

Requires real estate appraisers, acting as arbitrators, to record arbitration awards, the records of the awards, if separately issued, and any supplementary, dissenting, or explanatory opinions with the bureau of conveyances within ninety days of the determination of the award and its notification to the parties. (SD1)

 

 

 

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