Hawaii bill would block pandemic business property evictions

HONOLULU (AP) — Hawaii’s commercial landlords would be prohibited from evicting tenants under a bill that state lawmakers are considering to help businesses hurt by the coronavirus pandemic.

The proposed legislation would prohibit landlords from attempting to collect back rent from businesses for 12 months after the expiration of a final pandemic emergency proclamation. The bill passed the Senate Committee on Commerce, Consumer Protection and Health last week.

Tenants would be able to terminate leases without penalty if negotiations with landlords to amend contract terms are unsuccessful.

Tenants could also sue landlords who violate prohibitions in the bill for actual damages, seeking $2,000 for each violation and attorneys’ fees.

Data from the University of Hawaii Economic Research Organization show there are a third fewer businesses open in Hawaii now than there were before the pandemic. It is unclear how many closed permanently. The bill has received support from small business owners who told legislators in testimony about the struggles they have faced to continue operating.

Melissa Bow, president of the Kaimuki Business and Professional Association, said risk being shouldered by tenants is not fair or “morally right.”

“It is reasonable to create emergency laws to protect against the mass default and subsequent lawsuits and indelible stain of bankruptcies of small businesses and non-profits failing during this situation of Covid-19,” Bow wrote in testimony supporting the bill.

The measure is opposed by landlords who have said shifting the financial burden to them is not the correct response. Landlords and property owners said the bill would limit their ability to negotiate with businesses leasing from them.

Mark Hagadone, who leases commercial space in Honolulu, said cutting off rental income would hurt lessors who must pay mortgages, property managers, building maintenance fees and property taxes.

“There’s no one deep pocket in this situation,” Hagadone told lawmakers. “We are all in this together in Hawaii.”