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An Introduction To Condominium
Development and Project Registration In Hawaii
Condominium Property Regime and Public Reports
(Reprint of a 1995 Pamphlet)
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WHAT IS "CPR"?
Condominium Property Regime ("CPR") refers to
the specific form of ownership and governing process created when
real property becomes a condominium.
The process of creating a condominium is often referred to as "CPRing"
property.
Condominiums come in many forms and encompass a variety of uses
as may be permitted by zoning regulations. Some of the allowable
uses by zoning include: residential, commercial, industrial and
agricultural.
A condominium is a form of ownership of real property regardless
of the architectural style of the apartment, be it in a high-rise,
townhouse or detached unit.
Condominium ownership is described as ownership of an apartment
(or unit) and a percentage of undivided interest in the common elements.
The apartment owner is entitled to exclusive ownership of the apartment
but the land is a common element, owned jointly in common with other
apartment owners in the condominium project. Examples of other traditional
common elements are lobbies, hallways, roofs and roadways.
Yard areas or parking spaces which are provided for an apartment's
exclusive use (versus ownership) are usually identified as limited
common elements.
The creation and administration of CPRs are governed by Chapter
514A of the Hawaii Revised Statutes ("HRS").
WHY CPR?
Two advantages of condominium ownership are separate mortgages
and property taxes for each apartment owner.
Note that creating a CPR does not increase the number of apartments
permitted on the property. Neither does the CPR determine or change
the zoning.
WHAT PROPERTY CAN BE "CPR'ed"?
Submission of real property in the State of Hawaii to CPR
must be by the owners, including lessees. The project must contain
two or more apartments as defined by statute. The number and type
of apartments must meet zoning requirements. Therefore, if the project
will contain dwelling units, the number of dwelling units allowable
is determined by the zoning district. Neither the Real Estate Commission
("Commission") nor the Counties approve or disapprove
what property can be CPR'ed.
HOW TO CPR?
To verify the allowable uses on the property contact the
appropriate county agency. Note the uses are the same whether or
not the property is CPR'ed. Provide the County with the Tax Map
Key ("TMK") number or property address to confirm the
number of apartments e.g. dwelling units and types of uses permitted
and defined by zoning regulation. Contact information is provided
on the last page of this brochure.
A condominium is created when the following items are recorded
at the Bureau of Conveyances or filed at the Office of the Assistant
Registrar of the Land Court:
1) Declaration of Condominium Property Regime;
2) Bylaws of the Association of Apartment Owners;
3) Condominium Map (floor plans); and
4) Master deed or lease.
The property owner(s) may be the developer of the condominium project.
However, if the developer is not the property owner(s), then the
owner(s) must acquiesce to submission of the property to CPR by
consent and joinder to the Declaration of Condominium Property Regime.
CPR DOCUMENTS
It is strongly recommended that the condominium documents
be drafted with the advice of an attorney familiar with Chapter
514A, HRS. The statute requires that a Hawaii registered architect
or professional engineer certify the condominium map.
Refer to Chapter 514A, HRS, and Chapter 107, Hawaii Administrative
Rules ("HAR"), for specific requirements. Copies of statute
and rules may be purchased from the Cashier's Office at the Department
of Commerce and Consumer Affairs. See the last page of this brochure
for contact information.
TIME REQUIRED TO CPR
The time required to create a CPR depends on the time it
takes for the developer to create and record the required documents
with the Bureau of Conveyances or the Office of the Assistant Registrar
of the Land Court.
PROJECT REGISTRATION
Registration with the Commission of all condominium projects
is required before any apartment is offered for sale or sold.
Any advertisement or attempt of whatever nature used to encourage
the acquisition of a legal or equitable interest in a condominium
is prohibited until the project is registered with the Commission
and an effective date is issued for a public report.
Violators may be subject to a fine of up to $10,000 or imprisonment
for up to one year or both. A civil penalty of up to $10,000 for
each violation may also be incurred.
Condominium Registration Packets which include the public report
form, instructions, fees and checklists are available from the Commission
at no charge. The Commission does not approve or disapprove the
condominium project.
PUBLIC REPORT
A public report is a disclosure statement intended for
prospective purchasers. The statement provides a description of
the project, including permitted uses, restrictions, warranties,
and encumbrances.
The three types of public reports are: Preliminary, Final and Supplementary.
The Preliminary is often used to test market the project. Once the
Final receives an effective date, the sales contracts can become
legally binding on the purchasers. When a circumstance occurs that
would render a public report misleading in any material respect,
as may be determined by the Commission, the developer must submit
a Supplementary.
Public reports are effective for a 13-month period. Extensions
may be available for a fee.
TIME REQUIRED FOR PROJECT REGISTRATION
Time estimates vary, based on completeness of submission,
the complexity of the project and the volume of submissions. The
estimate for the issuance of an effective date for a public report
is approximately six to eight weeks from submission of a complete
registration file to the Commission.
ASSOCIATION REGISTRATION
The Association of Apartment Owners (AOAO) is the governing
entity created by the CPR. Each condominium association of six or
more apartments is required to register annually with the Commission.
The registration form may be obtained from the Commission. See the
last page of this brochure for contact information.
QUESTIONS?
Questions concerning Chapter 514A, HRS, including condominium
project and association registration may be addressed to:
Condominium Specialist
Real Estate Commission
250 South King St., Rm 702
Honolulu, HI 96813
ph. (808) 586-2646
From the neighbor islands dial the toll free number listed at the
bottom of this page, followed by extension 6-2646
Inquiries regarding the number and types of structures and uses
permitted on a particular property should be directed to the appropriate
county department in the county where the proposed condominium project
is located:
County of Kauai
Planning Department
4444 Rice St., Suite A473
Lihue, HI 96766
ph. (808) 241-6677
City and County of Honolulu
Department of Planning and Permitting
650 South King St.
Honolulu, HI 96813
ph. (808) 523-4414
County of Maui
Dept. of Public Works & Environmental Management
Development Services Administration
250 South High St.
Wailuku, HI 96793
ph. (808) 270-7250
County of Hawaii
Planning Department
101 Pauahi Street, Suite 3
Hilo, HI 96720-3043
ph. (808) 961-8288
Be advised that the county is only able to respond to questions
concerning county codes and ordinances.
To purchase a copy of Chapter 514A, HRS and Chapter 107, HAR, contact:
Cashier's Office
Department of Commerce and Consumer Affairs
HRH Princess Victoria Kamamalu Building
1010 Richards St., 3rd Fl, P.O. Box 541
Honolulu, HI, 96809
ph. (808) 586-2832
To call toll free from the neighbor islands, dial the number indicated
below, then 62832, then #.
From Kauai: 274-3141
From Maui: 984-2400
From Hawaii: 974-4000
From Molokai or Lanai: 1-800-468-4644
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