Advertising Prior to Registration

The condominium law requires that most projects be registered with the issuance of an effective date by the Hawaii Real Estate Commission prior to any sales, pursuant to sections 514B-81 and 82, HRS, and thus developers and their agents often ask what advertising is allowed prior to a registration.

The condominium law has two key prohibitions for pre-registration solicitation pursuant to section 514B-85, HRS. Prior to a registration, developers or their agents  “shall not collect any moneys from prospective purchasers or anyone on behalf of prospective purchasers.” Developers also “shall not require or request that a prospective purchaser execute any document other than a nonbinding preregistration agreement.” The short answer is in the act of advertising prior to the effective date, no moneys can be exchanged and no binding agreements can be signed.