Bill Text: HI SB600 | 2014 | Regular Session | Introduced

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Bill Title: Trade Regulation and Practice; Real Property; Lease-Purchase Agreements

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [SB600 Detail]

Download: Hawaii-2014-SB600-Introduced.html

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THE SENATE	S.B. NO.	600
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to real property.

 

 

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

 

     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to chapter 481, Hawaii Revised Statutes, to be appropriately designated and to read as follows:

"Chapter 481

Lease-Purchase Agreements for real property

     §   –1  Definitions.  As used in this chapter:

     "Advertisement" means a commercial message in any medium that aids, promotes, or assists, directly or indirectly, a lease-purchase agreement covered under this chapter.

     "Consummation" means the time a tenant becomes contractually obligated under a lease-purchase agreement.

     "Landlord" shall have the same meaning as in section 521-8.

     "Lease-purchase agreement" means a real property lease for a fixed period of time with an obligation for the tenant to purchase the property at the end of the lease period where a portion of the rent is applied to the future payment.

     "Owner" shall have the same meaning as in section 521-8.

     "Tenant" shall have the same meaning as in section 521-8.

     §   -2  Recording of agreement.  Before any payment is due from a tenant pursuant to a lease-purchase agreement, the landlord shall record the lease-purchase agreement with the bureau of conveyances and furnish the tenant with a file-marked copy of the recorded lease-purchase agreement.

     §   –3  Disclosure requirements.  (a)  The landlord shall disclose to the tenant the information required by this chapter.  In a transaction involving more than one landlord, only one landlord need make the disclosures, but all landlords shall be bound by these disclosures.  The disclosures shall be made before consummation of the lease-purchase agreement.

     (b)  The disclosures shall be made clearly and conspicuously in writing and in not less than ten-point standard type.  All disclosures required by this chapter shall be printed or typed in a color or shade that clearly contrasts with the background.  The disclosures required under section    -4 shall be made on the face of the lease-purchase agreement above the line for the tenant's signature.

     (c)  If a disclosure becomes inaccurate as the result of any act, occurrence, or agreement by the tenant after delivery of the required disclosures, the resulting inaccuracy shall not be a violation of this chapter.

     §   –4  Information required in disclosure.  (a)  A landlord shall disclose the following items, as applicable, in every lease-purchase agreement:

     (1)  A description of the property sufficient to identify it;

     (2)  The date of the transaction and the identities of the landlord and tenant;

     (3)  The total number, total amount, and timing of all payments necessary to acquire ownership of the property;

     (4)  A statement that the tenant shall not own the property until the tenant has made the total payment necessary to acquire ownership;

     (5)  A statement identifying the party responsible for maintaining the fitness of the property pursuant to section 521-42 while it is being rented, together with a description of that responsibility; and

     (6)  A statement of any mortgages, liens, or encumbrances on the property.

     (b)  In addition to the disclosures required pursuant to this section, the landlord shall also make the following disclosure:

"NOTICE TO TENANT--READ BEFORE SIGNING

     (1)  DO NOT SIGN THIS BEFORE YOU READ THE ENTIRE AGREEMENT INCLUDING ANY WRITING ON THE REVERSE SIDE, EVEN IF OTHERWISE ADVISED.

     (2)  DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.

     (3)  THE ORIGINAL SIGNED AGREEMENT MUST BE RECORDED WITH THE BUREAU OF CONVEYANCES.  YOU ARE ENTITLED TO A COPY OF THE RECORDED AGREEMENT."

     §   -5  Advertisements.  If an advertisement for a lease-purchase agreement refers to or states the dollar amount of any payment and the right to acquire ownership of real property, the advertisement shall also clearly and conspicuously state the following items, as applicable:

     (1)  That the transaction advertised is a lease-purchase agreement;

     (2)  The total of payments necessary to acquire ownership; and

     (3)  That the tenant acquires no ownership rights if the total amount necessary to acquire ownership is not paid.

     Any owner or personnel of any medium in which an advertisement appears or through which it is disseminated is not liable under this section.

     §   -6  Remedies of tenant.  (a)  In case of a violation by a landlord of any provision of this chapter, the tenant may bring a suit in any court of competent jurisdiction to recover actual damages from the landlord, or may set off or counterclaim in any action by the landlord.

     (b)  The remedies specified in subsection (a) shall be in addition to any other remedies provided by law.

     (c)  In any action brought pursuant to this section, the court shall award the prevailing party the costs of the action and reasonable attorneys' fees.

     §   -7  Unfair or deceptive acts or practices.  Notwithstanding section     -6, any person who violates this chapter shall be deemed to have engaged in an unfair or deceptive act or practice within the meaning of section 480-2.

     §   -8  Unconscionability.  (a)  With respect to a lease-purchase transaction, if the court as a matter of law finds the transaction, agreement, or any clause of the agreement to have been unconscionable at the time it was made, the court may:

     (1)  Refuse to enforce the agreement;

     (2)  Enforce the remainder of the agreement without the unconscionable clause; or

     (3)  Limit the application of any unconscionable clause to avoid any unconscionable result.

     (b)  If it is claimed or appears to the court that the transaction, agreement, or clause may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its setting, purpose, and effect to aid the court in making a determination related to unconscionability.

     (c)  The remedies of this section shall be in addition to remedies otherwise available for the same conduct authorized under law other than in this chapter."

     SECTION 2.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 3.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Trade Regulation and Practice; Real Property; Lease-Purchase Agreements

 

Description:

Establishes certain requirements pertaining to lease-purchase agreements for real property.  Establishes causes of action for violations.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.