Condominium Property Regimes

Clarifies that projects created as condominium property regimes
under chapter 514A are subject to county zoning and other county
building and development ordinances and rules.  (SB2766 HD1)

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 1
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that the function of
 2 county zoning and county land development ordinances and rules is
 3 to protect public health, safety, and welfare.  The purpose of
 4 this Act is to clarify that projects created and established as
 5 condominium property regimes are subject to county land use
 6 regulatory authority, and to ensure that projects created and
 7 established as condominium property regimes conform to the
 8 provisions of underlying county zoning ordinances and development
 9 requirements and are consistent with the purposes of adopted
10 county land use policies and the state land use law.
11      SECTION 2.  Chapter 514A, Hawaii Revised Statutes, is
12 amended by adding to part I a new section to be appropriately
13 designated and to read as follows:
14      "514A-    Conformance with county land use ordinances.  Any
15 condominium property regime established under this chapter shall
16 conform to the existing underlying county zoning for the property
17 and all applicable county permitting requirements adopted by the
18 county in which the property is located, including any
19 supplemental rules adopted by the county, pursuant to section
20 514A-45, to ensure the conformance of condominium property

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 1 regimes to the purposes and provisions of county zoning and
 2 development ordinances and chapter 205.  In the case of a
 3 property which includes one or more existing structures being
 4 converted to condominium status, the condominium property regime
 5 shall comply with section 514A-11(13) or section 514A-40(b)."
 6      SECTION 3.  Section 514A-11, Hawaii Revised Statutes, is
 7 amended to read as follows:
 8      "514A-11  Recordation and contents of declaration.  The
 9 bureau of conveyances and the land court shall immediately set up
10 the mechanics and method by which recordation of a master deed or
11 lease and the declaration may be made.  Provisions shall be made
12 for the recordation of instruments affecting the individual
13 apartments on subsequent resales, mortgages, and other
14 encumbrances, as is done with all other real estate recordations;
15 provided that land court certificates of title shall not be
16 issued for apartments.  The declaration to which section 514A-20
17 refers shall express the following particulars:
18      (1)  Description of the land, whether leased or in fee
19           simple, on which the building or buildings and
20           improvements are or are to be located;
21      (2)  Description of the building or buildings, stating the
22           number of stories and basements, the number of
23           apartments, and the principal materials of which it or
24           they is or are constructed or to be constructed;

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 1      (3)  The apartment number of each apartment, and a statement
 2           of its location, approximate area, number of rooms,
 3           [and] immediate common element to which it has access,
 4           designated parking stall[,] if considered a limited
 5           common element, and any other data necessary for its
 6           proper identification;
 7      (4)  Description of the common elements;
 8      (5)  Description of the limited common elements, if any,
 9           stating to which apartments their use is reserved;
10      (6)  The percentage of undivided interest in the common
11           elements appertaining to each apartment and its owner
12           for all purposes, including voting;
13      (7)  Statement of the purposes for which the building or
14           buildings and each of the apartments are intended and
15           restricted as to use;
16      (8)  The name of a person to receive service of process in
17           the cases hereinafter provided, together with the
18           residence or place of business of the person which
19           shall be within the county in which the property is
20           located;
21      (9)  Provision as to the percentage of votes by the
22           apartment owners which shall be determinative of
23           whether to rebuild, repair, or restore the property in

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 1           the event of damage or destruction of all or part of
 2           the property;
 3     (10)  Any further details in connection with the property
 4           [which] that the person executing the declaration may
 5           deem desirable to set forth consistent with this
 6           chapter;
 7     (11)  The method by which the declaration may be amended,
 8           consistent with this chapter; provided that an
 9           amendment to the declarations of all condominium
10           projects existing as of May 22, 1991, and all
11           condominium projects created thereafter shall require a
12           vote or written consent of seventy-five per cent of all
13           apartment owners, except as otherwise provided in this
14           chapter; provided further that the declarations of
15           condominium projects having five or fewer apartments
16           may provide for the amendment thereof by a vote or
17           written consent of more than seventy-five per cent of
18           all apartment owners;
19     (12)  Description as to any additions, deletions,
20           modifications, and reservations as to the property,
21           including without limitation provisions concerning the
22           merger or addition of later phases of the project.  To
23           the extent provided in the declaration, an amendment to

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 1           the declaration [which] that is made to implement those
 2           additions, deletions, modifications, reservations, or
 3           merger provisions shall require the vote or written
 4           consent of only the declarant or such percentage of
 5           apartment owners as is provided in the declaration; and
 6     (13)  [In the case of a project which includes one or more
 7           existing structures being converted to condominium
 8           status, a statement] A declaration subject to the
 9           penalties set forth in section 514A-49(b) that the
10           [project] condominium property regime is in compliance
11           with all zoning and building ordinances and codes
12           [applicable to the project], and all other permitting
13           requirements pursuant to section 514A-  , and
14           specifying[, if applicable:] in the case of a property
15           which includes one or more existing structures being
16           converted to condominium status:
17           (A)  Any variances which have been granted to achieve
18                such compliance; and
19           (B)  Whether, as the result of the adoption or
20                amendment of any ordinances or codes, the project
21                presently contains any legal non-conforming uses
22                or structures[.];

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 1           except that a property that is registered pursuant to
 2           section 514A-31 shall instead provide this declaration
 3           pursuant to 514A-40."
 4      SECTION 4.  Section 514A-40, Hawaii Revised Statutes, is
 5 amended by amending subsection (a) to read as follows:
 6      "(a)  No effective date shall be issued by the commission
 7 for a final public report prior to completion of construction of
 8 the project, unless there is filed with the commission:
 9      (1)  A statement showing all costs involved in completing
10           the project, including land payments or lease payments,
11           real property taxes, construction costs, architect,
12           engineering, and attorneys' fees, financing costs,
13           provisions for contingency, etc., which must be paid on
14           or before the completion of construction of the
15           project;
16      (2)  An estimate of the time of completion of construction
17           of the total project;
18      (3)  Satisfactory evidence of sufficient funds to cover the
19           total project cost from purchasers' funds, equity
20           funds, interim or permanent loan commitments, or other
21           sources;
22      (4)  A copy of the executed construction contract;

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 1      (5)  Satisfactory evidence of a performance bond issued by a
 2           surety licensed in the State of not less than one
 3           hundred per cent of the cost of construction, or such
 4           other substantially equivalent or similar instrument or
 5           security approved by the commission;
 6      (6)  If purchasers' funds are to be used for construction,
 7           an executed copy of the escrow agreement for the trust
 8           fund required under section 514A-67 for financing
 9           construction, which expressly shall provide for:
10           (A)  No disbursements by the escrow agent for payment
11                of construction costs[,] unless bills are
12                submitted with the request for disbursements that
13                have been approved or certified for payment by the
14                project lender or an otherwise qualified
15                financially disinterested person; and
16           (B)  No disbursements from the balance of the trust
17                fund after payment of construction costs pursuant
18                to [the preceding] paragraph (A) until
19                construction of the project has been completed and
20                the escrow agent receives satisfactory evidence
21                that all mechanics' and materialmen's liens have
22                been cleared, unless sufficient funds are set
23                aside for any bona fide dispute;

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 1      (7)  A parking plan to include designated residence parking
 2           stalls and guest parking, if any, exclusive of
 3           assignment to individual apartments, if parking stalls
 4           are to be considered limited common elements; [and]
 5      (8)  A copy of the disclosure statement required by section
 6           514A-62(f)(3) if an effective date for a contingent
 7           final public report has been issued by the commission
 8           and the report has not expired[.]; and
 9      (9)  A declaration subject to the penalties set forth in
10           section 514A-49(b) that the project is in compliance
11           with all county zoning and building ordinances and
12           codes, and all other county permitting requirements
13           applicable to the project, pursuant to section 
14           514A-     ."
15      SECTION 5.  Statutory material to be repealed is bracketed.
16 New statutory material is underscored.
17      SECTION 6.  This Act shall take effect upon its approval.