HB811 HD1

SECTION 1. Section 514B-56, Hawaii Revised Statutes, is amended to read as follows:

"[[]§514B-56[]] Developer's public report; amendments. (a) After the effective date for a developer's public report has been issued by the commission, if there are any changes, either material or pertinent changes, or both, regarding the information contained in or omitted from the developer's public report, or if the developer desires to update or change the information set forth in the developer's public report, the developer shall immediately submit to the commission an amendment to the developer's public report or an amended developer's public report clearly reflecting the change, together with such supporting information as may be required by the commission, to update the information contained in the developer's public report, accompanied by nonrefundable fees as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91. Within a reasonable period of time, the commission shall issue an effective date for the amended developer's public report or take other appropriate action under this part.

(b) The submission of an amendment to the developer's public report or an amended developer's public report shall not require the developer to suspend sales, subject to the power of the commission to order sales to cease as set forth in section 514B‑66; provided that the developer shall advise the appropriate real estate broker or brokers, if any, of the change and disclose to purchasers any change in the information contained in the developer's public report pending the issuance of an effective date for any amendment to the developer's public report or amended developer's public report; and provided further that if the amended developer's public report is not issued within thirty days after its submission to the commission, the commission may order a suspension of sales pending the issuance of an effective date for the amended developer's public report. Nothing in this section shall diminish the rights of purchasers under section 514B‑94.

(1) The amendment to the developer's public report, if the purchaser has received copies of the developer's public report and all prior amendments, if any; or

(2) A restated developer's public report, including all amendments.

(d) The filing of an amendment to the developer's public report or an amended developer's public report, in and of itself, shall not be grounds for a purchaser to cancel or rescind a sales contract. A purchaser's right to cancel or rescind a sales contract shall be governed by sections 514B‑86 and 514B‑87, the terms and conditions of the purchaser's contract for sale, and applicable common law.

(e) Notwithstanding any provision to the contrary, should any pertinent or material changes, or both, occur to a condominium that contains a time share plan duly registered under chapter 514E, it shall not be necessary to file an amendment to the developer's public report or an amended developer's public report to reflect any such changes if, with regard to that time share plan:

(1) A copy of the disclosure statement required by chapter 514E is required to be delivered to the purchaser or prospective purchaser; or

(2) Pursuant to section 514E-30, a copy of the disclosure statement required by chapter 514E is not required to be delivered to the purchaser or prospective purchaser because the offer and sale of the time share interest is made outside of Hawaii.

This subsection may not be used to circumvent the application of the registration and public report requirements of this chapter to the offer or sale by a condominium developer of units other than time share units. A sale to a single person of all time share interests in a given time share unit shall be treated as a sale of a whole resort condominium unit except in the case of a bulk sale or transfer."

SECTION 2. Act 181, Session Laws of Hawaii 2017, is amending by adding two new sections to read as follows:

"SECTION . Notwithstanding any provision to the contrary, should there be any pertinent or material changes, or both, to a condominium established under chapter 514A, Hawaii Revised Statutes, that contains a time share plan duly registered under chapter 514E, Hawaii Revised Statutes, it shall not be necessary to revise the governing documents of the condominium to comply with chapter 514B, Hawaii Revised Statutes.

SECTION . Notwithstanding any provision to the contrary, should there be any pertinent or material changes, or both, to a condominium established under chapter 514A, Hawaii Revised Statutes, that contains a time share plan duly registered under chapter 514E, Hawaii Revised Statutes, it shall not be necessary to register the condominium pursuant to chapter 514B, Hawaii Revised Statutes, or to update or amend any existing public report to reflect any such changes if, with regard to that time share plan:

(1) A copy of the disclosure statement required by chapter 514E, Hawaii Revised Statutes, is required to be delivered to the purchaser or prospective purchaser; or

(2) Pursuant to section 514E-30, Hawaii Revised Statutes, a copy of the disclosure statement required by chapter 514E, Hawaii Revised Statutes, is not required to be delivered to the purchaser or prospective purchaser because the offer and sale of the time share interest is made outside of Hawaii. This paragraph may not be used to circumvent the application of the registration and public report requirements of chapter 514B, Hawaii Revised Statutes, to the offer or sale by a condominium developer of units other than time share units. A sale to a single person of all time share interests in a given time share unit shall be treated as a sale of a whole resort condominium unit except in the case of a bulk sale or transfer."

SECTION 3. Act 181, Session Laws of Hawaii 2017, is amended by amending section 45 to read as follows:

"SECTION 45. Condominium property regimes created prior to July 1, 2006, that were issued an effective date pursuant to [~~section~~] sections 514A-40 and 514A-41, Hawaii Revised Statutes, may be sold on or after January 1, 2019, without revising any of the governing documents; provided that the developer's public report was active [~~on January 1, 2019, and is~~], non-expired, and accurate [~~and not misleading. On~~] between January 1, 2019, [~~all active, non-expired chapter 514A, Hawaii Revised Statutes, developer's public reports~~] and July 1, 2020, pursuant to sections 514A-40 and 514A-41, Hawaii Revised Statutes, along with their most recent disclosure abstract, if any, will be treated as non-expiring developer's public reports under part IV of chapter 514B, Hawaii Revised Statutes. Chapter 514A, Hawaii Revised Statutes, developer's public reports shall be treated as non-expiring chapter 514B, Hawaii Revised Statutes, developer's reports on the first day their respective report was accurate and had an active effective date between January 1, 2019, and July 1, 2020. Should any pertinent or material changes, or both, occur to the condominium project, the developer shall file [~~an amended~~] a developer's public report superseding all prior reports pursuant to chapter 514B, Hawaii Revised Statutes; provided that such projects and their subsequent reports filed under chapter 514B, Hawaii Revised Statutes, shall be exempt from the conversion requirements under section 514B-84(a)(1) and (2), Hawaii Revised Statutes. [~~Condominium~~] On July 1, 2020, condominium property regimes created prior to July 1, 2006, that were not issued an effective date pursuant to sections 514A-40 and 514A-41, Hawaii Revised Statutes, [~~and~~] did not file a notice of intent pursuant to section 514A-1.5(2)(B), Hawaii Revised Statutes, or have effective dates expired prior to January 1, 2019, shall revise their governing documents and register under chapter 514B, Hawaii Revised Statutes, for a developer to offer for sale or to sell condominiums.

Nothing contained in this Act or in the condominium property act shall be deemed to invalidate any condominium property regime that was validly created under chapter 514A, Hawaii Revised Statutes, prior to July 1, 2006."

SECTION 4. Notwithstanding section 2 of Act 181, Session Laws of Hawaii 2017, and subject to section 3 of this Act, the following sections of chapter 514A, Hawaii Revised Statutes, shall remain operative in the form in which they read on December 31, 2018, until June 30, 2020, for the sole purpose of providing developers with sufficient time to update their developer's public reports and associated documents in order to qualify for the safe harbor provisions of section 45 of Act 181, Session Laws of Hawaii 2017, as amended by this Act:

Part I. General Provisions and Definitions

514A-1 Title

514A-1.5 Applicability of chapter

514A-1.6 Conformance with county land use ordinances

514A-2 Chapter not exclusive

514A-3 Definitions

514A-4 Status of apartments

514A-5 Ownership of apartments

514A-6 Separate taxation

Part II. Creation, Alteration, and Termination

of Condominiums

514A-11 Recordation and contents of declaration

514A-12 Copy of the floor plans to be filed

514A-13 Common elements

514A-13.6 Mailboxes for each dwelling required

514A-14 Parking stalls

514A-14.5 Ownership of parking stalls

514A-15 Common profits and expenses

514A-15.1 Common expenses; prior late charges

514A-15.5 Metering of utilities

514A-16 Liens against apartments; removal from lien; effect of part payment

514A-17 Contents of deeds or leases of apartments

514A-18 Blanket mortgages and other blanket liens affecting an apartment at time of first conveyance or lease

514A-19 Merger of increments

514A-20 Condominium property regimes

514A-21 Removal from provisions of this chapter

Part III. Registration and Administration

514A-32 Questionnaire and filing fee

514A-33 Inspection

514A-34 Inspection expenses

514A-35 Waiver of inspection

514A-36 Public reports and registration fees

514A-38 Request for effective date or hearing by developer

514A-40 Final reports

514A-41 Supplementary public report

514A-42 True copies of public report; no misleading information

514A-43 Automatic expiration of public reports; exceptions

514A-44 Deposit of fees

514A-45 Supplemental regulations governing a condominium property regime

514A-46 Investigatory powers

514A-47 Cease and desist orders

514A-48 Power to enjoin

514A-49 Penalties

514A-50 Limitation of action

Part IV. Protection of Purchasers

514A-61 Disclosure requirements

514A-62 Copy of public report to be given to prospective purchaser

514A-63 Rescission rights

514A-64.5 Protection of purchasers' funds

514A-65 Escrow requirement

514A-67 Financing construction

514A-68 Misleading statements and omissions

514A-69 Remedies; sales voidable when and by whom

514A-70 Warranty against structural and appliance defects; notice of expiration required

SECTION 5. On July 1, 2020, the authority to extend the operation of the listed sections of chapter 514A, Hawaii Revised Statutes, that is provided under section 4 to allow developers to qualify for the safe harbor provisions of section 45 of Act 181, Session Laws of Hawaii 2017, as amended by this Act, shall expire.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	811
THIRTIETH LEGISLATURE, 2019		H.D. 1
STATE OF HAWAII