An interesting article that discusses a logical and positive approach to addressing the universal concern of squatters, ends by discussing troubling legislation being proposed in the Hawaii Legislature. From the preamble in the legislation one can see the good intentions, but the outcome I believes brings more questions than answers.
A homeowner who is delinquent on their mortgage (for likely a significant amount of time) receives a notice of foreclosure and will then be liable for significant fines if they abandon the property and do not rent it out!
Instead of educating homeowners that they have the legal right to stay in the home until the sale is finalized, they now are threatening daily fines. We know the mindset of a homeowner in this circumstance, are they more likely to oblige or just throw their hands up and say I’m losing the house, let them fine me too etc.?
If they don’t have the funds to pay the mortgage will they have the resources to pay thousands in fines?
Even if they do rent it out, their personal financial issues are not addressed, are they going to be conscientious landlords and an asset to the community?
If the bank cancels the sale for legitimate reasons (homeowner declares bankruptcy, files litigation) should they be fined daily simply for “vacancy”, especially if they are actively maintaining the property?
The proposed bill I am referencing is HB 1557 and can viewed by clicking here.