Condos, County Laws

Provides that condominium property regimes are subject to county
zoning and county subdivision and development ordinances and

THE SENATE                              S.B. NO.           1350
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that the function of
 2 county zoning and county subdivision and development ordinances
 3 and rules is to protect public health, safety, and welfare.  The
 4 purpose of this Act is to ensure that projects created and
 5 established as condominium property regimes are subject to
 6 underlying county zoning and county subdivision and development
 7 ordinances and rules.
 8      SECTION 2.  Chapter 514A, Hawaii Revised Statutes, is
 9 amended by adding a new section to part I to be appropriately
10 designated and to read as follows:
11      "514A-    Conformance with county zoning.  (a)  Any
12 project, including any additional later phases of any project,
13 established under this chapter shall conform to the existing
14 underlying county zoning for the property and all subdivision,
15 development, building, and permitting requirements adopted by the
16 county by ordinance or rule.  The number of apartments intended
17 to residential use, including farm dwellings and the number of
18 apartments intended to be conveyed with reservation rights to
19 alter, improve, expand, convert, or replace a nonresidential

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 1 apartment shall not exceed the number of dwelling units allowed
 2 per zoned lot of record by the existing underlying county zoning.
 3 No apartment shall be established or held for sale for
 4 residential use, or intended to be conveyed with reservation
 5 rights to alter, improve, expand, convert, or replace a
 6 nonresidential apartment with a residential apartment, that
 7 exceeds the number of dwelling units allowed per zoned lot of
 8 record by the underlying county zoning existing at the time the
 9 declaration and condominium plans are recorded.
10      (b)  For any project with individual detached apartments
11 intended for residential use, including farm dwellings, or
12 intended to be converted to residential use, the area of the
13 limited common element designated for exclusive use by each
14 detached apartment shall conform to minimum lot size
15 requirements, use restrictions, and development standards of the
16 underlying county zoning existing at the time the declaration and
17 condominium plan are recorded; except for those projects that
18 have been granted cluster zoning or planned unit development
19 approval by the appropriate county land use decision-making
20 authority of the county in which the project is located."
21      SECTION 3.  Section 514A-3, Hawaii Revised Statutes, is
22 amended as follows:
23      1.   By amending the definition of "apartment" to read:

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 1      ""Apartment" means a unit or a part of the property intended
 2 for any type of use or uses, and with an exit to a public street
 3 or highway or to a common element or elements leading to a public
 4 street or highway, and may include such appurtenances as garage
 5 and other parking space, storage room, balcony, terrace, and
 6 patio."
 7      2.   By amending the definition of "condominium": to read:
 8      ""Condominium" means the ownership of single [units,]
 9 apartments with common elements, located on property within the
10 condominium property regime."
11      SECTION 4.  Section 514A-11, Hawaii Revised Statutes, is
12 amended to read as follows:
13      "514A-11  Recordation and contents of declaration.  The
14 bureau of conveyances and the land court shall immediately set up
15 the mechanics and method by which recordation of a master deed or
16 lease and the declaration may be made.  Provisions shall be made
17 for the recordation of instruments affecting the individual
18 apartments on subsequent resales, mortgages, and other
19 encumbrances, as is done with all other real estate recordations;
20 provided that land court certificates of title shall not be
21 issued for apartments.  The declaration to which section 514A-20
22 refers shall express the following particulars: 
23      (1)  Description of the land, whether leased or in fee

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 1           simple, on which the building or buildings and
 2           improvements are or are to be located;
 3      (2)  Description of the building or buildings, stating the
 4           number of stories and basements, the number of
 5           apartments, and the principal materials of which it or
 6           they is or are constructed or to be constructed;
 7      (3)  The apartment number of each apartment, and a statement
 8           of its location, approximate area, number of rooms, and
 9           immediate common element to which it has access,
10           designated parking stall, if considered a limited
11           common element, and any other data necessary for its
12           proper identification;
13      (4)  Description of the common elements;
14      (5)  Description of the limited common elements, if any,
15           stating to which apartments their use is reserved;
16      (6)  The percentage of undivided interest in the common
17           elements appertaining to each apartment and its owner
18           for all purposes, including voting;
19      (7)  Statement of the purposes for which the building or
20           buildings and each of the apartments are intended and
21           restricted as to use;
22      (8)  The name of a person to receive service of process in
23           the cases hereinafter provided, together with the

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

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 1     (12)  Description as to any additions, deletions,
 2           modifications, and reservations as to the property,
 3           including without limitation provisions concerning the
 4           merger or addition of later phases of the project.  To
 5           the extent provided in the declaration, an amendment to
 6           the declaration which is made to implement those
 7           additions, deletions, modifications, reservations or
 8           merger provisions shall require the vote or written
 9           consent of only the declarant or such percentage of
10           apartment owners as is provided in the declaration; and
11     (13)  [In the case of a project which includes one or more
12           existing structures being converted to condominium
13           status, a] Receipt of a written statement or other
14           administrative procedure evidencing the certification
15           by the county officer or officers having jurisdiction
16           over county zoning and subdivision ordinances and rules
17           and the issuance of building permits that the project
18           is in compliance with all zoning, subdivision, and
19           building ordinances and codes applicable to the
20           project, and specifying, if applicable:
21           (A)  Any variances which have been granted to achieve
22                such compliance; and
23           (B)  Whether, as the result of the adoption or

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 1                amendment of any ordinances or codes, the project
 2                presently contains any legal non-conforming uses
 3                or structures[.] ; except that a project that is
 4                registered pursuant to section 514A-31 shall not
 5                include that statement in the declaration and
 6                shall provide the statement pursuant to section
 7                514A-40."
 8      SECTION 5.  Section 514A-12, Hawaii Revised Statutes, is
 9 amended to read as follows:
10      514A-12  Copy of the [floor] plans to be filed. (a)
11 Simultaneously with the recording of the declaration, there shall
12 be filed in the office of the recording officer a set of plans to
13 include the floor plans and elevations of the building or
14 buildings, showing the layout, location, apartment numbers, and
15 dimensions of the apartments, stating the name of the property or
16 that it has no name, and [bearing the] a project site plan or map
17 showing the boundaries of the project property and the boundaries
18 of recorded lots, common elements, limited common elements for
19 exclusive use of each apartment, easements and rights of way if
20 any, the area measures for the preceding, location and uses of
21 apartments and buildings, zoning, and tax map key.
22      (b)  The project site plan for all projects filed under this
23 chapter shall bear a statement from the county officers having

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 1 jurisdiction over zoning, subdivision, and development permitting
 2 certifying the project to be in compliance with county zoning,
 3 subdivision, and development ordinances and rules.  The floor
 4 plans shall bear a statement of a registered architect or
 5 professional engineer certifying that it is an accurate copy of
 6 portions of the plans of the building or buildings as filed with
 7 the county or city and county officer having jurisdiction over
 8 the issuance of permits for the construction of buildings and, if
 9 construction of the building or buildings is completed, as
10 approved by the county or city and county officer.  If the floor
11 plans do not include a statement by the architect or engineer
12 that the floor plans fully and accurately depict the layout,
13 location, apartment numbers, and dimensions of the apartments as
14 approved by the county or city and county officer having
15 jurisdiction over the issuance of permits for the construction of
16 buildings and as built, there shall be recorded within thirty
17 days from the date of completion of the building or buildings as
18 "date of completion" is defined in section 507-43, or from the
19 date of occupancy of the building or buildings, whichever shall
20 first occur, an amendment to the declaration to which shall be
21 attached a statement of a registered architect or professional
22 engineer certifying that the final floor plans theretofore filed,
23 or being filed simultaneously with such amendment, fully and

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 1 accurately depict the layout, location, apartment numbers, and
 2 dimensions of the apartments as approved by the county or city
 3 and county officer having jurisdiction over the issuance of
 4 permits for the construction of buildings and as built, which
 5 amendment shall require only the vote or written consent of the
 6 declarant or such other person or persons as are provided in the
 7 declaration.  
 8      (c)  The plans shall be kept by the recording officer as
 9 provided by rules adopted by the department of land and natural
10 resources, pursuant to chapter 91, indexed in the same manner as
11 a conveyance entitled to record, numbered serially in the order
12 of receipt, each designated "apartment ownership," with the name
13 of the property, if any, and each containing an appropriate
14 reference to the recording of the declaration.  Correspondingly,
15 the record of the declaration shall contain a reference to the
16 file number of the project site plan and floor plans of the
17 building or buildings on the property affected thereby."
18      SECTION 6.  Section 514A-36, Hawaii Revised Statutes, is
19 amended by amending subsection (a) to read as follows:
20      "(a)  Concurrently with its filing with the commission of
21 the notification of intention pursuant to sections 514A-31 and
22 514A-32, the developer shall prepare and submit to the commission
23 a public report disclosing all material facts pertaining to the

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 1 project.  The public report shall be in such form and content as
 2 prescribed by the commission.  Such public report may not be used
 3 for the purpose of selling any apartments in the project unless
 4 and until the commission issues an effective date for the public
 5 report.  The commission's issuance of an effective date for a
 6 public report shall not be construed to constitute the
 7 commission's approval or disapproval of the project, or the
 8 commission's representation that all material facts concerning
 9 the project have been fully or adequately disclosed, or the
10 commission's judgment of the value or merits of the project.  No
11 effective date for a final public report shall be issued until
12 execution and recordation of the deed or master lease, the
13 declaration, the bylaws, and plans including site and floor
14 plans, as provided by sections 514A-11, 514A-12, 514A-20, 514A-
15 40, and 514A-81."
16      SECTION 7.  Section 514A-40, Hawaii Revised Statutes, is
17 amended by amending subsections (a) and (b) to read as follows:
18      "(a)  No effective date shall be issued by the commission
19 for a final public report prior to completion of construction of
20 the project, unless there is filed with the commission:
21      (1)  A statement showing all costs involved in completing
22           the project, including land payments or lease payments,
23           real property taxes, construction costs, architect,

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

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 1                approved or certified for payment by the project
 2                lender or an otherwise qualified financially
 3                disinterested person; and
 4           (B)  No disbursements from the balance of the trust
 5                fund after payment of construction costs pursuant
 6                to the preceding paragraph until construction of
 7                the project has been completed and the escrow
 8                agent receives satisfactory evidence that all
 9                mechanics' and materialmen's liens have been
10                cleared, unless sufficient funds are set aside for
11                any bona fide dispute;
12      (7)  A parking plan to include designated residence parking
13           stalls and guest parking, if any, exclusive of
14           assignment to individual apartments, if parking stalls
15           are to be considered limited common elements; [and]
16      (8)  A copy of the disclosure statement required by section
17           514A-62(f)(3) if an effective date for a contingent
18           final public report has been issued by the commission
19           and the report has not expired[.]; and
20      (9)  A signed statement or other administrative evidence
21           issued by the appropriate county officer or officers
22           having jurisdiction over county zoning, subdivision
23           ordinances and rules, and the issuance of building

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 1           permits, certifying that the project is in compliance
 2           with all zoning subdivision and building ordinances and
 3           codes applicable to the project.
 4      (b)  No effective date shall be issued by the commission for
 5 a final public report for a project that includes one or more
 6 existing structures being converted to condominium status unless
 7 there is filed with the commission all items required under
 8 subsection (a) and:
 9      (1)  A statement signed by [an] appropriate county
10           [official] officers that the project is in compliance
11           with all zoning and building ordinances and codes
12           applicable to the project, and specifying, if
13           applicable:
14           (A)  Any variances which have been granted to achieve
15                such compliance; and
16           (B)  Whether the project contains any legal
17                nonconforming uses or structures as a result of
18                the adoption or amendment of any ordinances or
19                codes;
20      (2)  A statement by the declarant, based upon a report
21           prepared by an independent Hawaii registered architect
22           or engineer, describing the present condition of all
23           structural components and mechanical and electrical

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 1           installations material to the use and enjoyment of the
 2           project; and
 3      (3)  A statement by the declarant of the expected useful
 4           life of each item reported on in paragraph (2) or a
 5           statement that no representations are made in that
 6           regard; provided that this paragraph and paragraph (2)
 7           apply only to apartments that may be occupied for
 8           residential use and have been in existence for five
 9           years or more."
10      SECTION 8.  Statutory material to be repealed is bracketed.
11 New statutory material is underscored.
12      SECTION 9.  This Act shall take effect upon its approval.
14                           INTRODUCED BY:_________________________