HB484

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

agricultural land sale disclosures

§ -1 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Agricultural land" means any land that is classified in the agricultural district pursuant to chapter 205.

"Disclosure statement" means a written statement prepared and in a form prescribed by the land use commission that fully and accurately sets forth the permitted uses and restrictions on the uses of land in the agricultural district pursuant to sections 205-4.5 and 205-4.6.

§ -2 Applicability. This chapter shall apply to any sale of agricultural lands. The failure of the seller or the seller's agent to comply with this chapter shall not affect the validity of the title to any agricultural land sold.

§ -3 Prohibitions on sales of agricultural lands. Except as provided in section -4, no seller may sell agricultural land unless:

(1) Prior to the sale of the agricultural land, a disclosure statement is:

(A) Signed and dated by the seller within six months before or ten calendar days after the acceptance of a real estate purchase contract by the buyer; and

(B) Delivered to the buyer as provided in section
-5;

(2) The buyer acknowledges receipt of the disclosure statement on the real estate purchase contract, or in any addendum attached to the contract, or in a separate document; and

(3) The buyer is afforded the opportunity to examine the disclosure statement as provided in section -5.

§ -4 Exemptions. This chapter shall not apply to the following sales of agricultural land:

(1) Sale to a co-owner;

(2) Sale to a spouse, parent, or child of the seller;

(3) Sale by devise, descent, or court order;

(4) Sale by operation of law, including, but not limited to, any transfer by foreclosure, bankruptcy, or partition, or any transfer to a seller's creditor incident to a deed (or assignment) in lieu of foreclosure, workout, or the settlement or partial settlement of any preexisting obligation of a seller owed a creditor and any later sale of residential real property by such creditor; and

(5) Sale by a lessor to a lessee resulting from conversion of leased land to fee simple.

§ -5 Delivery of disclosure statement to buyer; procedures. (a) No later than ten calendar days from acceptance of a real estate purchase contract, the seller, either directly or through the seller's agent, shall provide the disclosure statement to the buyer.

(b) Upon receipt of the disclosure statement, the buyer shall have fifteen calendar days to:

(1) Examine the disclosure statement; and

(2) Decide whether to rescind the real estate purchase contract.

If the buyer decides to rescind the real estate purchase contract, the buyer shall deliver, to the seller directly or through the seller's agent within the fifteen-day period, written notification of the buyer's decision to rescind the real estate purchase contract. Failure to deliver the written notification to the seller within the fifteen-day period shall be deemed an acceptance of the disclosure statement.

(c) The seller and buyer may agree in writing to reduce or extend the time period provided for the delivery or examination and rescission period. The form of the receipt for the disclosure statement required by section -3(2) shall provide that the buyer has the right to examine the disclosure statement and to rescind the real estate purchase contract in accordance with this section.

§ -6 Remedies; voidable contracts. (a) A buyer may elect to complete the purchase of the agricultural land even if the seller fails to comply with the requirements of this chapter. After recordation of the sale of agricultural land, a buyer shall have no right under this chapter to rescind the real estate purchase contract despite the seller's failure to comply with the requirements of this chapter.

(b) If the buyer is provided a disclosure statement prepared and delivered in accordance with this chapter and the buyer decides to rescind the real estate purchase contract, the buyer shall not be entitled to any damages but shall be entitled to the immediate return of all deposits.

(c) In addition to the rights of rescission granted to the buyer under this chapter, if the seller negligently fails to provide the disclosure statement required by this chapter, the seller shall be liable to the buyer for the amount of the actual damages, if any, suffered as a result of the seller's negligence.

(d) In addition to the remedies allowed under subsection (b) or (c), a court may also award the prevailing party attorney's fees, court costs, and administrative fees.

§ -7 Rescission. Notwithstanding anything to the contrary in this chapter, any action for rescission brought under this chapter shall commence prior to the recorded sale of the real property.

§ -8 Limitation of actions. (a) Any action brought under this chapter shall commence within two years from the date the buyer received the disclosure statement; provided that if no disclosure statement was delivered to the buyer, then the action shall commence within two years of the recorded sale of the agricultural land.

(b) This chapter supersedes all other laws relating to the time for commencement of actions for failure to make the disclosures required by this chapter.

§ -9 Other disclosures. The provisions of this chapter shall not relieve or release a seller or a seller's agent of any other requirements of disclosure with regard to a sale of real property, including but not limited to the provisions contained in chapter 508D.

§ -10 Preparation of disclosure form. The land use commission shall prepare the disclosure statement form described in section 1 and make it available to the real estate commission and owners of agricultural lands described in section 1." SECTION 2. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date, and shall have no effect on any real estate sales contract that was fully executed and delivered prior to the effective date of this Act.

SECTION 3. This Act shall take effect upon its approval, provided that section 1 shall take effect on September 1, 2007.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	484
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII