What are the lease rent renegotiation formulas for cooperatives?
Hawaii law provides a ceiling for renegotiated rent for cooperative apartment projects that qualify under the law. This law does not apply to rent renegotiation of units in condominium and PUD projects. The law applies to all cooperative proprietary leases which call for rent renegotiation. It provides that renegotiation of rent cannot take place more than once every 10 years and the first renegotiation can be no sooner than 15 years following the commencement date of the lease. It also provides a formula for determining the maximum amount of renegotiated lease rent to be paid by the cooperative housing corporation. If the lessee corporation and the lessor cannot come to an agreement on the new lease rent, the law requires that the rent be determined by an impartial Third Party through arbitration proceedings conducted by the State Housing Finance and Development Corp.
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