Report Title:

Fractional Conveyance of Residential Properties

Description:

Requires the filing of a co-tenancy agreement with the county upon the conveyance of a fractional interest in fee simple title to a single-family, residential property, with exceptions.

HOUSE OF REPRESENTATIVES	H.B. NO.	1824
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

relating to real property conveyances.

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

     SECTION 1.  The legislature finds that maintaining the availability of permanent housing is in the interest of the people of Hawaii.  The legislature further finds that the sale of residential homes into fractional ownership effectively reduces the availability of long-term permanent housing in the state.

     The purpose of this Act is to require co-owners, upon the conveyance of a fractional interest in a single-family residential property, to file with the appropriate county land use agency a co-tenancy agreement stating the co-owners' rights and responsibilities with respect to the property and each other.

     SECTION 2.  Chapter 509, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§509-    Conveyances of fractional interests in residential real property. (a)  This section shall not apply to the following conveyances of single-family residential real property:

(1) Conveyance to a spouse, parent, child, sibling, grandparent, grandchild, or reciprocal beneficiary as defined in chapter 572; and

(2) Conveyance by devise, descent, or court order.

(b)  No owner may convey a fractional fee simple interest in a single-family residential property unless the new co-owners:

(1) Enter into a co-tenancy agreement setting forth the owners of the fractional interests and their rights and responsibilities with respect to the property and each other; and

(2) File the co-tenancy agreement with the county agency that regulates land use where the property is situated.

(c)  An owner who acquires a fractional interest from a family member or reciprocal beneficiary under subsection (a) shall not convey such interest without a co-tenancy agreement as required under subsection (b), unless the conveyance is part of a conveyance of the entire fee simple interest or the conveyance is otherwise permitted under subsection (a)."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

INTRODUCED BY:

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