The Repeal of Chapter 514A, HRS
Chapter 514A, HRS, has been fully repealed and the select sections temporarily re-enacted for one year effective July 1, 2019, pursuant to Act 223, SLH 2019 has sunsetted as of July 1, 2020. The Hawaii Real Estate Commission is no longer accepting any chapter 541A, HRS, reports and does not have any legal authority to grant any extensions that are not provided for statutorily.
Chapter 514A, HRS, projects that were active and accurate between January 1, 2019 and June 30, 2020 are automatically transferred into chapter 514B, HRS. Please review the effective date on your most recent report. Projects that transferred no longer expire but are required to file annual reports detailing any changes to the Commission. Should subsequent changes to the project occur, developers are allowed to continue to sell units, but must inform the buyer and their agents of the changes as well as immediately filing an amendment or amended developer’s public report with the Commission.
Projects where developers did not meet the deadline must re-register their projects under chapter 514B, HRS. Additional guidance to this process will be forthcoming by the Commission.
The Commission has received a number of supplementary reports from non-developer owners who own their never sold unit either through gift/inheritance or a “Hui” are attempting to update the Developer’s Public Report without developer rights. These submissions will not be processed as such submitters lack the required developer rights to update the report. The Commission is unable to grant developer rights by fiat nor can non-developer owners simply claim such rights without the consent of the developer.
The Commission has also received a number of partial submissions where the supplementary report only updates some of the unsold developer units. These submissions will not be processed as such supplementary reports must report on all unsold units. Partial transfers within a project create significant confusion across the entire industry from realtors to financing to escrow as to which units are legal to sell. The entire project must be transfered, not just individual units.
Select parts of chapter 514A, HRS, have been temporarily re-enacted for one year via Act 223, SLH 2019. Developers of chapter 514A, HRS, projects who still retain developer inventory may file final or supplementary reports, and extension requests to update and reactivate their projects for transfer into chapter 514B, HRS. Developers have up to July 1, 2020 to submit their updates. However, the Commission would like to reiterate that the July 1, 2020 deadline is a completion date, not a filing date, and recommends developers file as soon as possible.
The Hawaii Real Estate Commission (“Commission”) has released updated forms to reflect the selected parts that were reenacted by the Act. Developers must file on the updated form. Older forms will be rejected. The Commission has also published a developer’s guide to avoiding common errors. Please review before submitting to this office.
Projects that never registered with this office must register as new projects under chapter 514B, HRS, and cannot utilize chapter 514A, HRS, under Act 223, SLH 2019.
Please also review the updated educational material:
- Updated Frequently Asked Questions
- Updated Brochure
- Information for Developers Post Chapter 514A, HRS
Chapter 514A, HRS, has been repealed. The Hawaii Real Estate Commission (“Commission”) will no longer accept any chapter 514A, HRS, reports, disclosure abstracts, extension request, or other Chapter 514A, HRS, filings. The Commission is aware of Senate Bill 552 which extends the safe harbor until July 1, 2020. In the event of SB 552 becoming law by Governor signature or the forty-five day requirement under Article 3, Section 16 of the Hawaii State Constitution, the Commission will release updated Chapter 514A, HRS, forms and additional guidance.
Projects with unsold units that did not meet the safe harbor for automatic transfer in Chapter 514B, HRS, must re-register under chapter 514B, HRS, to engage in any legal sale of previously unsold units. These projects are still validly created condominiums as Act 181, SLH 2017, does not invalidate any condominium property regime that was validly created under chapter 514A, Hawaii Revised Statutes, prior to July 1, 2006.
Please review the Commission’s memo on re-registration.
Act 181, passed in the 2017 legislative session, repeals Chapter 514A, HRS, effective January 1, 2019. Previously, chapter 514B, HRS, had largely superseded the governance of all condominiums in the state, leaving only the development sections of Chapter 514A, HRS, relevant.
Act 181, SLH 2017, does not invalidate any condominium property regime that was validly created under chapter 514A, Hawaii Revised Statutes, prior to July 1, 2006.
Act 181, SLH 2017, does not allow for extensions. The Hawaii Real Estate Commission’s (“Commission”) did request that all paperwork be submitted by August of 2018 in the Frequently Asked Questions that was mailed to thousands of developers.
The repeal of the development sections poses a concern to two groups of people: Developers who still retain inventory of units created under Chapter 514A, HRS, and condominium owners who received their unit as either a gift or inheritance.
Please read following publications to determine if the repeal impacts you and what to do if it does:
- Developer/Inheritor Letter
- Developer Memo
- CPR Process
- Frequently Asked Questions
- Final Reminder Developer Memo
You may find the forms and general information necessary to file your extension or supplemental public report here:
The repeal’s legislatively imposed deadline of January 1, 2019 is not a filing deadline, but a completion deadline. Act 181, SLH 2017, does not allow for any extensions. Due to less than six weeks remaining in 2018, developers or their attorneys will be required to submit an acknowledgement form prior to the review process, effective November 26, 2018.
Act 181, SLH 2017 – Part V, Section 45
Act 244, SLH 2007 – Section 8
Act 93, SLH 2005 – Section 9
It has been brought to the Hawaii Real Estate Commission’s (“Commission”) attention regarding the September 30, 1994 meeting where the Commission granted an extension allowing developers to not file a supplementary report for conversion of shed apartments to residential dwellings where the developer’s public report discloses such a change as permitted and where the developer provides a copy of all amendments to the declaration of condominium property regime and condominium map to disclose the change to the project.
The Commission during the August 8, 2018 Real Estate Commission meeting issued a non-binding interpretation stating that in the context of the Chapter 514A repeal, that the September 30, 1994 decision should not be relied upon in meeting Act 181, SLH 2017’s statutory safe harbor and staff reiterated in the meeting that all developers should prepare and submit supplementary reports or extensions (where relevant) to the Commission as soon as possible. Hawaii state law supersedes the Commission’s non-binding interpretations and affected parties should follow Act 181, SLH 2017.