Hawaii-2022-SB563-Amended

SECTION 1. Chapter 127A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§127A- Commercial tenant protection. (a) It shall be unlawful, during the effective period of any emergency proclamation and for ninety days following the termination of that effective period, for a commercial landlord to initiate or to continue proceedings to collect past-due rent from an impacted commercial tenant or to evict an impacted commercial tenant if the impacted commercial tenant has served written notice to the commercial landlord of the tenant's status as an impacted commercial tenant.

(b) The unpaid balance of any rent that has accrued on the commercial tenancy of any impacted commercial tenant during the effective period of an emergency proclamation shall be due at the end of the month containing the date twelve months after the end of the effective period of the final emergency proclamation unless the commercial landlord and the impacted commercial tenant have reached an agreement to pay the balance at a later date.

(c) An impacted commercial tenant who wishes to modify its commercial lease during the effective period of an emergency proclamation or within sixty days after the end of the effective period may engage in good faith negotiations with the impacted commercial tenant's commercial landlord to modify the rent or other economic requirement of the lease. The impacted commercial tenant may initiate these negotiations by serving written notice, including notice of the tenant's status as an impacted commercial tenant, to the commercial landlord. If the impacted commercial tenant and the commercial landlord do not reach a mutually satisfactory agreement within thirty days of the commercial landlord's receipt of notice, the impacted commercial tenant may terminate the lease by serving notice of termination to the commercial landlord. If the impacted commercial tenant terminates the lease, the tenant shall have fourteen days from the date of service to vacate the property; provided that, if the impacted commercial tenant has vacated the property within those fourteen days, the following shall apply:

(1) The lease shall terminate;

(2) No further liability for rent, fees, or costs shall accrue under the lease;

(3) Any third-party guaranties associated with the lease shall terminate and shall no longer be enforceable; and

(4) In lieu of any other damages, the impacted commercial tenant shall, within twelve months of vacating the property, pay the commercial landlord all of the following:

(A) Three months of rent as specified under the most recent terms of the lease or the actual amount of unpaid rent that accrued during the effective period of any emergency proclamation, whichever is less; and

(B) All unpaid rent that accrued prior to the effective period of the initial emergency proclamation.

If the impacted commercial tenant and the commercial landlord reach an agreement, the tenant shall not have a subsequent option to terminate the lease under this subsection at a later date.

(d) Remedies provided under this section are cumulative and do not preclude any remedies available to tenants under any other law.

(e) A commercial landlord who willfully violates this section shall be liable to the impacted commercial tenant in a civil action for the following:

(1) Actual damages to the tenant;

(2) An amount no less than $250 and no more than $2,000 for each incident constituting a violation; and

(3) Reasonable attorney's fees arising from the civil action.

(f) For the purposes of this section:

"Commercial landlord" means any person, business, or other entity that owns or manages commercial property, or their agent.

"Commercial tenant" means a tenant occupying commercial real property pursuant to a lease including but not limited to businesses or nonprofit organizations.

"COVID-19" means coronavirus disease 2019.

"Emergency proclamation" means an emergency proclamation issued by the governor or by a mayor relating to COVID-19.

"Impacted commercial tenant" means a commercial tenant who operates primarily in this State, occupies commercial real property pursuant to a lease, has applied for a paycheck protection program loan in the calendar years 2020 and 2021, and meets one of the following criteria:

(1) The commercial tenant has experienced a decline of twenty-five per cent or more in average monthly revenue over the two most recent calendar months when compared to:

(A) The commercial tenant's average monthly revenue for the two calendar months before a state or local emergency proclamation took effect; or

(B) The commercial tenant's average monthly revenue for the same calendar months in 2019;

(2) The commercial tenant was prevented from opening or was required to delay opening the tenant's business because of an emergency proclamation relating to COVID-19; or

(3) The commercial tenant has suffered a decline of fifteen per cent or more in capacity due to compliance with an official public health and safety guideline for preventing the spread of COVID-19.

"Paycheck protection program loan" means a loan established by the federal Coronavirus Aid, Relief, and Economic Security Act of 2020."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval and shall be repealed on July 1, 2022.

THE SENATE	S.B. NO.	563
THIRTY-FIRST LEGISLATURE, 2021		S.D. 1
STATE OF HAWAII