THE SENATE	S.B. NO.	2436
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII

A BILL FOR AN ACT

relating to land court registration.

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

     SECTION 1.  Chapter 501, Hawaii Revised Statutes, is amended by amending part I, subpart entitled "Leasehold Time Share Interests", to read as follows:

     "LEASEHOLD [TIME SHARE] INTERESTS

§501-240 Definitions. As used in this part, unless the context otherwise requires:

"Leasehold interest" includes leasehold time share interest, as defined in section 501-20, and leasehold condominium interest.

§501-241  Leasehold [time share] interests.  (a)  Except as otherwise expressly provided in this part, the requirements of chapter 502 shall apply to a leasehold [time share] interest and the requirements of this chapter shall not apply to [such] the leasehold [time share] interest.

     (b)  Without limiting the generality of subsection (a), the following instruments need not be registered pursuant to this chapter to be effective and shall be recorded in the bureau of conveyances pursuant to chapter 502:

     (1)  An assignment or other instrument transferring a leasehold [time share] interest;

     (2)  A mortgage or other instrument granting a lien on a leasehold [time share] interest;

     (3)  An agreement of sale for the sale of a leasehold [time share] interest.  Any [such] agreement under this paragraph of sale shall be subject to section 502-85 and shall not be subject to section 501-101.5;

     (4)  A lien or notice of lien pertaining to a leasehold [time share] interest in favor of a time share owners association, an association of owners under chapter 514A or 514B, or a similar homeowner's association;

     (5)  A judgment, decree, order of court, attachment, writ, or other process against a leasehold [time share] interest;

     (6)  A mechanic's or materialman's lien or other lien upon a leasehold [time share] interest;

     (7)  A lis pendens or notice of pendency of action, notice, affidavit, demand, certificate, execution, copy of execution, officer's return, or other instrument relating to a leasehold [time share] interest and otherwise required or permitted to be recorded or registered in connection with the enforcement or foreclosure of any lien, whether by way of power of sale pursuant to chapter 667 or otherwise;

     (8)  A power of attorney given by the owner of a leasehold [time share] interest or the vendor or vendee under an agreement of sale for the sale of a leasehold [time share] interest, a mortgagee or other lienor having a mortgage or lien upon a leasehold [time share] interest, or another party holding a claim or encumbrance against or an interest in a leasehold [time share] interest; or

     (9)  An instrument assigning, extending, continuing, dissolving, discharging, releasing in whole or in part, reducing, canceling, extinguishing, or otherwise modifying or amending any of the foregoing instruments.

     (c)  Every conveyance, lien, attachment, order, decree, instrument, or entry affecting a leasehold [time share] interest which would, if registered, filed, or recorded, or entered in the office of the assistant registrar pursuant to this chapter, affect the leasehold [time share] interest to which it relates, if recorded, filed, or entered in the bureau of conveyances pursuant to chapter 502, shall be notice to all persons from the time of [such] the recording, filing, or entering in the bureau of conveyances.

     (d)  The assistant registrar shall not be required to make a memorandum or other note upon the certificate of title for registered land subject to a leasehold [time share] interest of any conveyance, lien, attachment, order, decree, instrument, or entry recorded, filed, or entered solely in the bureau of conveyances against the leasehold [time share] interest.

     (e)  Notwithstanding subsections (a), (b), and (c), the following instruments shall be registered by recording the instrument with the assistant registrar and by a brief memorandum thereof made by the assistant registrar upon the certificate of title, and signed by the assistant registrar:

     (1)  The apartment or unit lease, and any amendments thereto, and any cancellation or extinguishment thereof;

     (2)  Any deed or other instrument conveying the fee interest in registered land and any other instrument encumbering or otherwise dealing with the fee interest in registered land including but not limited to a mortgage of the fee interest, an assignment of the lessor's interest in a lease, or the designation, grant, conveyance, transfer, cancellation, relocation, realignment, or amendment of any easement encumbering the fee interest;

     (3)  If the apartment or unit lease is a sublease, any assignment or other conveyance of the sublessor's estate or any other leasehold estate [which] that is superior to the apartment or unit lease, and any other instrument mortgaging, encumbering, or otherwise dealing with the sublessor's estate or any other estate [which] that is prior and superior to the leasehold [time share] interest;

     (4)  Any other instrument assigning, modifying, canceling, or otherwise dealing with an interest in registered land [which] that is:

         (A)  Less than an estate in fee simple; and

         (B)  Prior or superior to the lessee's interest in a leasehold [time share] interest;

     (5)  The declaration of condominium property regime or similar declaration by whatever name denominated, the bylaws of the association of owners under chapter 514A or 514B, the condominium map, any declaration of annexation or deannexation, any declaration of merger and any instrument effecting a merger, and any amendments to any of the foregoing and any cancellation or extinguishment thereof; and

     (6)  Any declaration of covenants, conditions, and restrictions, or similar instrument, by whatever name denominated, encumbering the fee, the bylaws of any homeowners association, any declaration of annexation or deannexation, any amendments and supplements thereto, and any cancellation or extinguishment thereof[;

(7) Any declaration of covenants, conditions, restrictions, or similar instrument, by whatever name denominated, establishing the time share plan, the bylaws of the time share owners association, any declaration of annexation or deannexation, any amendments and supplements thereto, and any cancellation or extinguishment thereof; and

(8) Any notice of time share plan, any declaration of annexation or deannexation, any amendments thereto, and any cancellation or extinguishment thereof].

     (f)  The execution or joinder of the lessees of the leasehold [time share] interests shall not be required for the registration or notation of instruments [which] that must be registered and noted pursuant to subsection (e); provided, however, an instrument amending, canceling, or extinguishing an apartment lease shall not be registered unless [such] the instrument is:

     (1)  Required to be registered by order of a court of competent jurisdiction;

     (2)  Executed by officers of the [time share] owners association pursuant to any registered [time share] instrument or power of attorney [which] that authorizes the [time share] owners association, its board, or its officers, to deal with issues arising under the apartment lease; or

     (3)  Accompanied by an affidavit of an officer of any title insurer or underwritten title company, as defined in section 431:20-102, stating that based upon a search of the records of title to the apartment lease, the parties who executed and acknowledged the instrument amending, canceling, or extinguishing the apartment lease are the owners of the leasehold [time share] interests in [such] the apartment [and/or] or their duly authorized attorney(s)-in-fact[.], or both.  In the event that the affidavit is incorrect and the title insurer or underwritten title company acted with gross negligence or in bad faith in making the affidavit, the title insurer or underwritten title company shall be liable to the owners of the leasehold [time share] interests for treble damages and reasonable attorneys' fees and costs.

This section shall not alter the rights of the parties to any such instrument.

[[]§501-242[]]  Status of leasehold [time share] interest as real property.  Nothing in this part shall affect the status of a leasehold [time share] interest as real property.

[[]§501-243[]]  Dual recording involving leasehold [time share] interests.  Nothing in this part shall prevent or prohibit the registration of an instrument [which] that assigns or affects both:

     (1)  One or more leasehold [time share] interests; and

     (2)  One or more interests in registered land other than a leasehold [time share] interest.

[[]§501-244[]]  Assignment of leasehold [time share] interest.  Any instrument [which] that first assigns or otherwise conveys a leasehold [time share] interest shall refer to the land court document number of the apartment lease, if applicable, or the most recent assignment of the whole thereof, whichever is later.  Any subsequent instrument of assignment or conveyance shall refer to the book and page or bureau of conveyances document number of the prior instrument of assignment or conveyance for the leasehold [time share] interest acquired.

[[]§501-245[]]  Reference to recorded instruments pertaining to leasehold [time share] interests.  Any instrument assigning, conveying, or otherwise dealing with a leasehold [time share] interest and [which] that requires a reference to a prior recorded instrument may satisfy the requirements of section 502-33 by reference to the land court document number (in the case of a document recorded pursuant to [chapter 501)] this chapter) or to the book and page or bureau of conveyances document number (in the case of a document recorded pursuant to chapter 502) of the instrument to which reference is made.

[[]§501-246[]]  Legal incidents of a leasehold [time share] interest.  A leasehold [time share] interest, and ownership therein, shall in all respects be subject to the same burdens and incidents [which] that attach by law to the lessee's interest in a leasehold apartment that is part of a condominium property regime established on unregistered land [and which is not utilized], whether or not it is used in a time share plan.

     Nothing in this part [shall], in any way, shall be construed to relieve a leasehold [time share] interest or the owners thereof:

     (1)  From any rights incident to the relation of husband and wife;

     (2)  From liability to attachment or mesne process or levy on execution;

     (3)  From liability to any lien of any description established by law on the leasehold [time share] interest, or in the interest of the owner in the leasehold [time share] interest;

     (4)  To change the laws of descent;

     (5)  The rights of partition between coparceners and other cotenants;

     (6)  The right to take the same by eminent domain;

     (7)  To relieve [such] the leasehold [time share] interest from liability to be recovered by a trustee in bankruptcy under the provisions of law relating to preferences; or

     (8)  To change or affect in any way any other rights or liabilities created by law and applicable to the lessee's interest in a leasehold apartment [which] that is part of a condominium property regime established on unregistered land [and which is not utilized], whether or not it is used in a time share plan; except as otherwise expressly provided in this part.

[[]§501-247[]] Voluntary dealing with a leasehold [time share] interest.  (a)  Except as otherwise provided in this part, an owner of a leasehold [time share] interest may convey, mortgage, sublease, charge, or otherwise deal with the same as if the condominium to which it pertains was established on unregistered land.  The owner may use forms of assignments, mortgages, or other voluntary instruments like those now in use and sufficient in law for the purpose intended.

     (b)  Notwithstanding subsection (a) and section 502-83, no assignment, mortgage, or other voluntary instrument (except a will, a lease for a term not exceeding one year, or an instrument required by this part to be registered in the land court and [which] that is so registered) purporting to assign or affect a leasehold [time share] interest, shall take effect as a conveyance or bind the leasehold [time share] interest, but shall operate only as a contract between the parties, and as evidence of authority to the registrar or assistant registrar.  The act of recordation pursuant to chapter 502 shall be the operative act to assign or affect the leasehold [time share] interest.

[[]§501-248[]]  Jurisdiction for matters pertaining to leasehold [time share] interests.  The land court shall have jurisdiction over all matters relating to instruments required by this part to be registered pursuant to this chapter.  Where any party is in doubt as to whether an instrument must be registered, the question shall be referred to the land court for decision; and the court, after notice to all parties and a hearing, shall enter an order determining the question.  Except as expressly otherwise provided in this section, nothing in this part shall deprive the land court of exclusive jurisdiction pursuant to section 501-101 over registered land, or any interest therein, which is prior or superior to the interest of the lessee of a leasehold [time share] interest.  The circuit court shall have jurisdiction, pursuant to section [[]603-21.5(a)(3)[]], over:

     (1)  All matters relating to instruments required by this part to be recorded pursuant to chapter 502;

     (2)  All other matters pertaining to a leasehold [time share] interest (except those in which jurisdiction is vested in the land court pursuant to this section); and

     (3)  All matters as to which jurisdiction would otherwise lie in the land court in part and in the circuit court in part."

     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.

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

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

INTRODUCED BY:

_____________________________

Report Title:

Condominium Leasehold Interests; Land Court

Description:

Requires condominium leasehold interests and leasehold time share interests to be recorded only in the Bureau of Conveyances.  Deletes the requirement for registration in the Land Court.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.