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State to appeal landlord-tenant ruling

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The state is appealing a federal judge’s decision that recently invalidated a law aimed at helping tenants negotiate leases with Oahu’s largest industrial landlord.

Gov. Linda Lingle notified the U.S. District Court Wednesday that the state will file an appeal with the U.S. Court of Appeals for the Ninth Circuit.

Chief Federal District Judge Susan Oki Mollway ruled on June 1 that a law, which only affects Massachusetts-based landlord HRPT Properties Trust and its tenants, was unconstitutional because it unfairly changed lease terms to benefit tenants.

State Attorney General Mark Bennett disagreed. "We believe that Judge Mollway’s decision is legally incorrect," he said.

The law, Act 189, was passed by the Legislature last year after a group of tenants complained that HRPT was being extremely aggressive in renegotiating rental rates — in some cases seeking to double or triple present rents — and forcing tenants into expensive arbitration. Lingle allowed the measure to become law without her signature.

About 180 businesses in Mapunapuna and Kalihi Kai have leases with HRPT.

HRPT sued to invalidate the law on grounds that it unfairly modified its leases, which the company assumed when it bought the real estate assets of the local Damon Estate in 2003.

Act 189 by design expired Wednesday, but the Legislature voted in April to extend its effective date to June 30, 2013. Lingle put the measure last week on a list of bills she is considering for veto.


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