Kailuan eviction prompts land bill

The eviction of leasehold apartment owners at the Kailuan residential cooperative has prompted a state Senate bill that would amend the "right of first refusal" law.

Senate Bill 3196 would amend state law so that leasehold owners get the right of first refusal on the purchase of a property when the owner has displayed an objective intent to sell, or accepted a written offer to purchase the property -- not only before expiration, but also within two years afterward.

Currently, Hawaii Revised Statutes 514C reads that the refusal law is in place when the leased fee interest in land under a condo or co-op project "is to be sold."

In January, Circuit Judge Glenn Kim ruled in favor of landowner Kaneohe Ranch Co., setting the stage for unit owners at the Kailuan to be evicted on Feb. 15. The co-op's ground lease expired Dec. 31.

Judge Kim ruled that an agreement to sell or buy, with full and complete terms, is a prerequisite to the "right of first refusal law."

The current bill won't help the Kailuan owners, whose dispute was handled under existing law. But it would affect some 1,500 or more leasehold property owners whose leases expire over the next decade.

Leasehold owners would be informed of the impending sale and be given the right of first refusal to purchase the fee interest, for the same price as the written purchase offer, under the bill.

The right of first refusal would apply "prior to or within two years after the termination of the lease."

The bill -- introduced in late January and backed by Sen. Clayton Hee (D, Kahuku-Kaneohe)-- was heard in the Commerce, Consumer Protection, and Affordable Housing Committee yesterday. Action on was deferred to Feb. 11.