A U.S. District Court Judge has struck down a Hawaii state law that gave commercial tenants greater leverage to negotiate rent with their Massachusetts-based landlord.

Chief Federal District Judge Susan Oki Mollway ruled that Act 189, which was enacted in 2009, violated the U.S. Constitution and could not be enforced. The law had been extended by Hawaii lawmakers to 2013, but still awaited Gov. Linda Lingle's signature.

HRPT Properties Trust, which owns more than 200 acres of industrial and office space in Mapunapuna, Sand Island and Kalihi Kai, sued shortly after the law was enacted. The property owner challenged what it called an “;unconstitutional amendment”; to the 180 or so ground leases it had acquired for $480 million from Damon Estate in 2003.

The law required that the “;fair and reasonable rent”; clause in HRPT agreements must apply to the lessor and lessee. It also mandated that use should determine rent.

Mollway, who issued her ruling after a May 10 hearing, found that Act 189 targeted HRPT and did not supply a general public purpose. She also ruled that the Constitution's contract clause prohibits states from changing historical rights.

“;We disagree with Judge Mollway's legal analysis and have made no decision yet on whether to appeal,”; said State Attorney General Mark Bennett.

The not-for-profit Citizens for Fair Valuation Inc., which joined with about a dozen HRPT lessees to get Act 189 passed, said it will consider appealing.

Tenants, who typically face rental adjustments each decade, have complained that HRPT had sought to double and triple rent and institute annual increases of 3 to 4 percent, Steiner said.

Since most tenants have built out the land that they lease and are locked into long-term contracts, they cannot walk away without risk, Steiner said.

“;Never before have over 20 properties been involved in arbitration proceedings at one time and this indicates that rent demands are not in line with market realities,”; he said. “;Damon was not an easy lessor either, but the business model was to work with tenants to avoid arbitration.”;

Tenants like Servco Pacific Inc., Grace Pacific Corp., Plywood Hawaii Inc. and Bacon Universal Co. Inc. and others could be adversely affected by the ruling, Steiner said.

“;The crux of what is happening here is a problem that will affect everyone of us because all the goods and services will go up dramatically to cover rent,”; he said. “;All the money they will be paying will be going off-island to a landlord who is not putting anything into the property.”;