REPORT TITLE:
Condominium Property Regimes


DESCRIPTION: Clarifies that projects created as condominium
property regimes under chapter 514A are subject to county zoning
and other county building and development ordinances and rules.
(SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO CONDOMINIUM PROPERTY REGIMES.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that the function of
 
 2 county zoning and county land development ordinances and rules is
 
 3 to protect public health, safety, and welfare.  The purpose of
 
 4 this Act is to clarify that projects created and established as
 
 5 condominium property regimes are subject to county land use
 
 6 regulatory authority, and to ensure that projects created and
 
 7 established as condominium property regimes conform to the
 
 8 provisions of underlying county zoning ordinances and development
 
 9 requirements and are consistent with the purposes of adopted
 
10 county land use policies and the state land use law.
 
11      SECTION 2.  Chapter 514A, Hawaii Revised Statutes, is
 
12 amended by adding to part I a new section to be appropriately
 
13 designated and to read as follows:
 
14      "§514A-    Conformance with county land use ordinances.  (a)
 
15 Any condominium property regime established under this chapter
 
16 shall conform to the existing underlying county zoning for the
 
17 property and all applicable county permitting requirements
 
18 adopted by the county in which the property is located, including
 
19 any supplemental rules adopted by the county, pursuant to
 
20 section 514A-45, to ensure the conformance of condominium
 

 
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 1 property regimes to the purposes and provisions of county zoning
 
 2 and development ordinances and chapter 205.  In the case of a
 
 3 property which includes one or more existing structures being
 
 4 converted to condominium status, the condominium property regime
 
 5 shall comply with section 514A-11(13) or 514A-40(b).
 
 6      (b)  This section shall not apply to state agencies that are
 
 7 specifically exempted from the requirements of this section."
 
 8      SECTION 3.  Section 514A-11, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§514A-11  Recordation and contents of declaration.  The
 
11 bureau of conveyances and the land court shall immediately set up
 
12 the mechanics and method by which recordation of a master deed or
 
13 lease and the declaration may be made.  Provisions shall be made
 
14 for the recordation of instruments affecting the individual
 
15 apartments on subsequent resales, mortgages, and other
 
16 encumbrances, as is done with all other real estate recordations;
 
17 provided that land court certificates of title shall not be
 
18 issued for apartments.  The declaration to which section 514A-20
 
19 refers shall express the following particulars:
 
20      (1)  Description of the land, whether leased or in fee
 
21           simple, on which the building or buildings and
 
22           improvements are or are to be located;
 
23      (2)  Description of the building or buildings, stating the
 

 
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 1           number of stories and basements, the number of
 
 2           apartments, and the principal materials of which it or
 
 3           they [is or] are constructed or are to be constructed
 
 4           of;
 
 5      (3)  The apartment number of each apartment, and a statement
 
 6           of its location, approximate area, number of rooms,
 
 7           [and] immediate common element to which it has access,
 
 8           designated parking stall[,] if considered a limited
 
 9           common element, and any other data necessary for its
 
10           proper identification;
 
11      (4)  Description of the common elements;
 
12      (5)  Description of the limited common elements, if any,
 
13           stating to which apartments their use is reserved;
 
14      (6)  The percentage of undivided interest in the common
 
15           elements appertaining to each apartment and its owner
 
16           for all purposes, including voting;
 
17      (7)  Statement of the purposes for which the building or
 
18           buildings and each of the apartments are intended and
 
19           restricted as to use;
 
20      (8)  The name of a person to receive service of process in
 
21           the cases hereinafter provided, together with the
 
22           residence or place of business of the person which
 
23           shall be within the county in which the property is
 

 
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 1           located;
 
 2      (9)  Provision as to the percentage of votes by the
 
 3           apartment owners which shall be determinative of
 
 4           whether to rebuild, repair, or restore the property in
 
 5           the event of damage or destruction of all or part of
 
 6           the property;
 
 7     (10)  Any further details in connection with the property
 
 8           [which] that the person executing the declaration may
 
 9           deem desirable to set forth consistent with this
 
10           chapter;
 
11     (11)  The method by which the declaration may be amended,
 
12           consistent with this chapter; provided that an
 
13           amendment to the declarations of all condominium
 
14           projects existing as of May 22, 1991, and all
 
15           condominium projects created thereafter shall require a
 
16           vote or written consent of seventy-five per cent of all
 
17           apartment owners, except as otherwise provided in this
 
18           chapter; provided further that the declarations of
 
19           condominium projects having five or fewer apartments
 
20           may provide for the amendment thereof by a vote or
 
21           written consent of more than seventy-five per cent of
 
22           all apartment owners;
 
23     (12)  Description as to any additions, deletions,
 

 
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 1           modifications, and reservations as to the property,
 
 2           including without limitation provisions concerning the
 
 3           merger or addition of later phases of the project.  To
 
 4           the extent provided in the declaration, an amendment to
 
 5           the declaration [which] that is made to implement those
 
 6           additions, deletions, modifications, reservations, or
 
 7           merger provisions shall require the vote or written
 
 8           consent of only the declarant or such percentage of
 
 9           apartment owners as is provided in the declaration; and
 
10     (13)  [In the case of a project which includes one or more
 
11           existing structures being converted to condominium
 
12           status, a statement] A declaration subject to the
 
13           penalties set forth in section 514A-49(b) that the
 
14           [project] condominium property regime is in compliance
 
15           with all zoning and building ordinances and codes
 
16           [applicable to the project], and all other permitting
 
17           requirements pursuant to section 514A-   , and
 
18           specifying[, if applicable:] in the case of a property
 
19           which includes one or more existing structures being
 
20           converted to condominium status:
 
21           (A)  Any variances which have been granted to achieve
 
22                such compliance; and
 
23           (B)  Whether, as the result of the adoption or
 

 
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 1                amendment of any ordinances or codes, the project
 
 2                presently contains any legal non-conforming uses
 
 3                or structures[.];
 
 4           except that a property that is registered pursuant to
 
 5           section 514A-31 shall instead provide this declaration
 
 6           pursuant to 514A-40."
 
 7      SECTION 4.  Section 514A-40, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (a) to read as follows:
 
 9      "(a)  No effective date shall be issued by the commission
 
10 for a final public report prior to completion of construction of
 
11 the project, unless there is filed with the commission:
 
12      (1)  A statement showing all costs involved in completing
 
13           the project, including land payments or lease payments,
 
14           real property taxes, construction costs, architect,
 
15           engineering, and attorneys' fees, financing costs,
 
16           provisions for contingency, etc., which must be paid on
 
17           or before the completion of construction of the
 
18           project;
 
19      (2)  An estimate of the time of completion of construction
 
20           of the total project;
 
21      (3)  Satisfactory evidence of sufficient funds to cover the
 
22           total project cost from purchasers' funds, equity
 
23           funds, interim or permanent loan commitments, or other
 

 
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 1           sources;
 
 2      (4)  A copy of the executed construction contract;
 
 3      (5)  Satisfactory evidence of a performance bond issued by a
 
 4           surety licensed in the State of not less than one
 
 5           hundred per cent of the cost of construction, or such
 
 6           other substantially equivalent or similar instrument or
 
 7           security approved by the commission;
 
 8      (6)  If purchasers' funds are to be used for construction,
 
 9           an executed copy of the escrow agreement for the trust
 
10           fund required under section 514A-67 for financing
 
11           construction, which expressly shall provide for:
 
12           (A)  No disbursements by the escrow agent for payment
 
13                of construction costs[,] unless bills are
 
14                submitted with the request for disbursements that
 
15                have been approved or certified for payment by the
 
16                project lender or an otherwise qualified
 
17                financially disinterested person; and
 
18           (B)  No disbursements from the balance of the trust
 
19                fund after payment of construction costs pursuant
 
20                to [the preceding] paragraph (A) until
 
21                construction of the project has been completed and
 
22                the escrow agent receives satisfactory evidence
 
23                that all mechanics' and materialmen's liens have
 

 
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 1                been cleared, unless sufficient funds are set
 
 2                aside for any bona fide dispute;
 
 3      (7)  A parking plan to include designated residence parking
 
 4           stalls and guest parking, if any, exclusive of
 
 5           assignment to individual apartments, if parking stalls
 
 6           are to be considered limited common elements; [and]
 
 7      (8)  A copy of the disclosure statement required by section
 
 8           514A-62(f)(3) if an effective date for a contingent
 
 9           final public report has been issued by the commission
 
10           and the report has not expired[.]; and
 
11      (9)  A declaration subject to the penalties set forth in
 
12           section 514A-49(b) that the project is in compliance
 
13           with all county zoning and building ordinances and
 
14           codes, and all other county permitting requirements
 
15           applicable to the project, pursuant to section 
 
16           514A-     .
 
17 This section shall not apply to state agencies that are
 
18 specifically exempted from the requirements of this section."
 
19      SECTION 5.  Statutory material to be repealed is bracketed.
 
20 New statutory material is underscored.
 
21      SECTION 6.  This Act shall take effect upon its approval.