REPORT TITLE:
Condominium Property Regimes


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

 
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THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   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 intent of adopted county
 
10 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.  Any
 
15 condominium property regime established under this chapter shall
 
16 conform to the existing underlying county zoning for the property
 
17 and all applicable county permitting requirements adopted by the
 
18 county in which the property is located, including any
 
19 supplemental rules adopted by the county, pursuant to section
 

 
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 1 514A-45, to ensure the conformance of condominium property
 
 2 regimes to the intent and provisions of county zoning and
 
 3 development ordinances and chapter 205.  Notwithstanding this
 
 4 section, in the case of a property which includes one or more
 
 5 existing structures being converted to condominium status, such a
 
 6 condominium property regime shall comply with section 514A-11(13)
 
 7 or section 514A-40(b)."
 
 8      SECTION 3.  Section 514A-3, Hawaii Revised Statutes, is
 
 9 amended by amending the definition of "apartment" to read as
 
10 follows:
 
11      ""Apartment" means a unit or part of the property intended
 
12 for any type of use or uses, and with an exit to a public street
 
13 or highway or to a common element or elements leading to a public
 
14 street or highway, and may include such appurtenances as garage
 
15 and other parking space, storage room, balcony, terrace, and
 
16 patio."
 
17      SECTION 4.  Section 514A-11, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "§514A-11  Recordation and contents of declaration.  The
 
20 bureau of conveyances and the land court shall immediately set up
 
21 the mechanics and method by which recordation of a master deed or
 
22 lease and the declaration may be made.  Provisions shall be made
 
23 for the recordation of instruments affecting the individual
 

 
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 1 apartments on subsequent resales, mortgages, and other
 
 2 encumbrances, as is done with all other real estate recordations;
 
 3 provided that land court certificates of title shall not be
 
 4 issued for apartments.  The declaration to which section 514A-20
 
 5 refers shall express the following particulars:
 
 6      (1)  Description of the land, whether leased or in fee
 
 7           simple, on which the building or buildings and
 
 8           improvements are or are to be located;
 
 9      (2)  Description of the building or buildings, stating the
 
10           number of stories and basements, the number of
 
11           apartments, and the principal materials of which it or
 
12           they is or are constructed or to be constructed;
 
13      (3)  The apartment number of each apartment, and a statement
 
14           of its location, approximate area, number of rooms, and
 
15           immediate common element to which it has access,
 
16           designated parking stall, if considered a limited
 
17           common element, and any other data necessary for its
 
18           proper identification;
 
19      (4)  Description of the common elements;
 
20      (5)  Description of the limited common elements, if any,
 
21           stating to which apartments their use is reserved;
 
22      (6)  The percentage of undivided interest in the common
 
23           elements appertaining to each apartment and its owner
 

 
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 1           for all purposes, including voting;
 
 2      (7)  Statement of the purposes for which the building or
 
 3           buildings and each of the apartments are intended and
 
 4           restricted as to use;
 
 5      (8)  The name of a person to receive service of process in
 
 6           the cases hereinafter provided, together with the
 
 7           residence or place of business of the person which
 
 8           shall be within the county in which the property is
 
 9           located;
 
10      (9)  Provision as to the percentage of votes by the
 
11           apartment owners which shall be determinative of
 
12           whether to rebuild, repair, or restore the property in
 
13           the event of damage or destruction of all or part of
 
14           the property;
 
15     (10)  Any further details in connection with the property
 
16           which the person executing the declaration may deem
 
17           desirable to set forth consistent with this chapter;
 
18     (11)  The method by which the declaration may be amended,
 
19           consistent with this chapter; provided that an
 
20           amendment to the declarations of all condominium
 
21           projects existing as of May 22, 1991, and all
 
22           condominium projects created thereafter shall require a
 
23           vote or written consent of seventy-five per cent of all
 

 
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 1           apartment owners, except as otherwise provided in this
 
 2           chapter; provided further that the declarations of
 
 3           condominium projects having five or fewer apartments
 
 4           may provide for the amendment thereof by a vote or
 
 5           written consent of more than seventy-five per cent of
 
 6           all apartment owners;
 
 7     (12)  Description as to any additions, deletions,
 
 8           modifications, and reservations as to the property,
 
 9           including without limitation provisions concerning the
 
10           merger or addition of later phases of the project.  To
 
11           the extent provided in the declaration, an amendment to
 
12           the declaration which is made to implement those
 
13           additions, deletions, modifications, reservations, or
 
14           merger provisions shall require the vote or written
 
15           consent of only the declarant or such percentage of
 
16           apartment owners as is provided in the declaration; and
 
17     (13)  [In the case of a project which includes one or more
 
18           existing structures being converted to condominium
 
19           status, a statement] A declaration under penalty of law
 
20           that the [project] condominium property regime is in
 
21           compliance with all zoning and building ordinances and
 
22           codes [applicable to the project], and all other
 
23           permitting requirements pursuant to section 514A-  ,
 

 
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 1           and specifying[, if applicable:] in the case of a
 
 2           property which includes one or more existing structures
 
 3           being converted to condominium status:
 
 4           (A)  Any variances which have been granted to achieve
 
 5                such compliance; and
 
 6           (B)  Whether, as the result of the adoption or
 
 7                amendment of any ordinances or codes, the project
 
 8                presently contains any legal non-conforming uses
 
 9                or structures[.];
 
10           except that a property that is registered pursuant to
 
11           section 514A-31 shall instead provide this declaration
 
12           pursuant to 514A-40."
 
13      SECTION 5.  Section 514A-40, Hawaii Revised Statutes, is
 
14 amended by amending subsection (a) to read as follows:
 
15      "(a)  No effective date shall be issued by the commission
 
16 for a final public report prior to completion of construction of
 
17 the project, unless there is filed with the commission:
 
18      (1)  A statement showing all costs involved in completing
 
19           the project, including land payments or lease payments,
 
20           real property taxes, construction costs, architect,
 
21           engineering, and attorneys' fees, financing costs,
 
22           provisions for contingency, etc., which must be paid on
 
23           or before the completion of construction of the
 

 
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 1           project;
 
 2      (2)  An estimate of the time of completion of construction
 
 3           of the total project;
 
 4      (3)  Satisfactory evidence of sufficient funds to cover the
 
 5           total project cost from purchasers' funds, equity
 
 6           funds, interim or permanent loan commitments, or other
 
 7           sources;
 
 8      (4)  A copy of the executed construction contract;
 
 9      (5)  Satisfactory evidence of a performance bond issued by a
 
10           surety licensed in the State of not less than one
 
11           hundred per cent of the cost of construction, or such
 
12           other substantially equivalent or similar instrument or
 
13           security approved by the commission;
 
14      (6)  If purchasers' funds are to be used for construction,
 
15           an executed copy of the escrow agreement for the trust
 
16           fund required under section 514A-67 for financing
 
17           construction, which expressly shall provide for:
 
18           (A)  No disbursements by the escrow agent for payment
 
19                of construction costs, unless bills are submitted
 
20                with the request for disbursements that have been
 
21                approved or certified for payment by the project
 
22                lender or an otherwise qualified financially
 
23                disinterested person; and
 

 
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 1           (B)  No disbursements from the balance of the trust
 
 2                fund after payment of construction costs pursuant
 
 3                to the preceding paragraph until construction of
 
 4                the project has been completed and the escrow
 
 5                agent receives satisfactory evidence that all
 
 6                mechanics' and materialmen's liens have been
 
 7                cleared, unless sufficient funds are set aside for
 
 8                any bona fide dispute;
 
 9      (7)  A parking plan to include designated residence parking
 
10           stalls and guest parking, if any, exclusive of
 
11           assignment to individual apartments, if parking stalls
 
12           are to be considered limited common elements; [and]
 
13      (8)  A copy of the disclosure statement required by section
 
14           514A-62(f)(3) if an effective date for a contingent
 
15           final public report has been issued by the commission
 
16           and the report has not expired[.]; and
 
17      (9)  A declaration under penalty of law that the project is
 
18           in compliance with all county zoning and building
 
19           ordinances and codes, and all other county permitting
 
20           requirements applicable to the project, pursuant to
 
21           section 514A-  ."
 
22      SECTION 6.  Statutory material to be repealed is bracketed.
 
23 New statutory material is underscored.
 

 
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 1      SECTION 7.  This Act shall take effect upon its approval. 
 
 2 
 
 3                           INTRODUCED BY:  _______________________
 
 4 
 

 
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