Hawaii State Bar Association- Real Property and Financial Services Section Presentation by Nathan Aipa and Alan Kido, Pitluck Kido & Aipa, LLP June

Transcription

1 Hawaii State Bar Association- Real Property and Financial Services Section Presentation by Nathan Aipa and Alan Kido, Pitluck Kido & Aipa, LLP June 20, 2014

2 Disclaimer The content of this brief outline is presented solely for informational purposes and is not intended to be and should not be viewed as providing legal advice.

3 HAR Overview Mission Enhance the ability of its members to successfully practice their profession ethically and competently, to serve the community, and to protect private property rights. Membership Approximately 8000 members who are active real estate licensees involved in all aspects related to the sale, purchase, exchange, or lease of real property in Hawaii Standard Forms Committee Responsible for the periodic review, revisions, and creation of standard real property transactional forms.

4 HAR Standard Forms Committee (SFC) Oversees 42 real estate Standard Forms for HAR membership, including scheduled periodic reviews of all Standard Forms and potential new forms. All Standard Forms are copyright-owned by Hawaii Association of REALTORS.

5 SFC General Standard Forms Review and Modification Process Step 1 SFC reviews master schedule of reviewing and revising all Standard Forms as necessary on a periodic basis. SFC Subcommittee(s) reviews existing Standard Form for possible modifications SFC Subcommittee prepares proposed modifications Step 2 SFC reviews proposed subcommittee modifications to Standard Form SFC makes further modifications to Standard Form Step 3 SFC disseminates proposed modified Standard Form to HAR membership for review, comment, and suggested changes Membership comments, proposed modifications, and suggestions are presented to SFC for review and consideration

6 SFC General Forms Review and Modification Process (Continued) Step 4 SFC reviews membership comments and proposed modifications and makes final changes to Standard Form SFC presents final revised Standard Form to the HAR Executive Committee Step 5 HAR Executive Committee conducts final review of SFC proposed revisions to Standard Form HAR Executive Committee approves final revised Standard Form for publication or refers the proposed Standard Form back to the SFC for further review. Step 6 Final approved Standard Form is then provided to vendor for digital formatting and final publication usually in May and November of each year.

7 HAR Recent Updated Standard Forms Purchase Contract (11/13)* Seller s Real Property Disclosure Statement (11/13)* Document Receipt (11/13) Rental Agreement (11/13) Renewable Energy Act Addendum (11/13) Commercial Real Property and Sale Agreement (5/14)* Commercial Real Property Counter Offer (11/13) Commercial Existing As Is Condition Addendum (11/13)

8 2013 Hawaii State Legislation SB 19, Act 261 Relating to Renewable Energy [Effective: Upon Adoption-July 3, 2013], Amended Chapter 269, HRS, Public Utilities Commission, Section SB 328, Act 206 Relating to Animals, [Effective: November 1, 2013], Amended Chapter 521, HRS, Landlord Tenant Code, Section SB 502, Act 186 Relating to Real Estate Seller Disclosure [Effective: November 1, 2013], Amended Chapter 508D, HRS, Mandatory Seller Disclosures in Real Estate Transactions, adding new section.

9 SB 19, Act 261 Relating to Renewable Energy, Effective Upon Adoption-July 3, 2013, Amended Section 269-1, HRS Intent: To exempt landlords who install renewable energy systems on their property and provide, sell or transmit electricity to tenants from the definition of a public utility; and To provide for disclosures in the rental agreement for the protection of tenants.

10 SB 19, Act 261 Relating to Renewable Energy SFC Response: Create Renewable Energy Act Addendum, RR306 Revise Rental Agreement, RR301 Adding Reference to Renewable Energy Act Addendum (Section 11)

11 Renewable Energy Act Addendum Landlord hereby agrees with Tenant, and discloses and represents to Tenant, the following: Landlord controls the renewable energy system within the premises; Landlord agrees to provide electricity to Tenant from such renewable energy system; Landlord preserves the Tenant s ability to be served by an electric utility, presumably in the event to Landlord s renewable energy system fails; Landlord delivers electricity directly to Tenant from Landlord s renewable energy system; The unit rate schedule or formula for the duration of the Rental Agreement shall be set on a per kilowatt basis; The rate charged by the Landlord shall be no greater than the effective rate charged per kilowatt hour from the applicable electric utility schedule filed with the Hawaii State Public Utilities Commission; The Rental Agreement shall not abrogate any terms or conditions of applicable tariffs for termination of services for nonpayment of electric utility services or rules regarding health, safety, and welfare; Disputes shall be resolved pursuant to the provisions of the Rental Agreement or Chapter 521, HRS, if applicable; and Wheeling, or the transportation of electricity through Landlord s renewable energy system, shall not be permitted.

12 SB 328, Act 206 Relating to Animals, [Effective November 1, 2013], Amended Chapter 521, HRS, Residential Landlord-Tenant Code, Section Intent To permit landlord to add a security deposit for pet animal(s) to ensure landlord will be compensated for damages caused by pet animal(s) To exempt assistance animal(s) that are deemed to be a reasonable accommodation for the tenant with a disability

13 SB 328, Act 206 Relating to Animals, [Effective November 1, 2013] SFC Response Revised Rental Agreement, RR301, Section 5, SECURITY DEPOSIT: Landlord may require a security deposit not in excess of a sum equal to one month's rent Plus an amount agreed upon by the Landlord and Tenant, not in excess of one month s rent, to compensate the Landlord for any damages caused by any pet animal allowed to reside in the premises Exception in the case of assistance animals.

14 SB 502, Act 186 Relating to Real Estate Seller Disclosure [Effective: November 1, 2013], Amended Chapter 508D, HRS, Mandatory Seller Disclosures in Real Estate Transactions Intent Address confusion caused by different definitions of planned community in Hawaii Revised Statutes Establishing a uniform standard of disclosure of project documents Clarifying types of documents that are required to be disclosed if the property is subject to a recorded declaration Requiring seller s disclosure of documents within ten (10) days after buyer and seller have received current title report Allowing for electronic delivery of documents with buyer s consent

15 SB 502, Act 186 Relating to Real Estate Seller Disclosure [Effective: November 1, 2013] SFC Response: Purchase Contract, RR201, Revised 8/13 For Release 11/13 Seller s Real Property Disclosure Statement, RR109, Revised 7/13 For Release 11/13 Document Receipt, RR226. Revised 8/13 For Release 11/13

16 Purchase Contract, RR201, Revised 8/13 For Release 11/13 New Revised Section I-1: Seller s Obligation to Disclosure, adding following sentence: Furthermore, Seller s obligations under Hawaii Revised Statutes Chapter 508D, as amended, regarding mandatory disclosure of all documents pertaining to the Property are set forth in Section M-1 below.

17 Purchase Contract, RR201, Revised 8/13 For Release 11/13 New Revised Section M-1 Seller shall provide Buyer applicable documentation, including: Approved Minutes of the last three (3) Board of Directors Meeting Articles of Incorporation/Association and Amendments By-laws and Amendments Copy of any and all pending litigation complaints filed by or against the Owner s Association and/or its directors that are currently unresolved Covenants, Conditions and Restrictions (CC&Rs) Current Financial Statement Current and/or Proposed Budget Current House Rules Declaration and Amendments Design Standards and/or Guidelines Insurance Summary Lender s Disclosures Minutes of the last Annual Meeting Planned Community Documents Project Information Form RR105c Reserve Study or Summary Subdivision and/or title documents

18 Purchase Contract, RR201, Revised 8/13 For Release 11/13 New Section M-1 Further Revisions: Pursuant to 508D, as amended, if Property is subject to a recorded Declaration, and if applicable documents have not already been provided to Buyer as set forth immediately above, Seller shall provide Buyer copies of the following documents and any amendments or supplements thereto: Articles of incorporation or other document, if any, creating the corporation or association whereby the corporation or association has the power to enforce the Declaration; Declaration or similar organizational documents, and any exhibits thereto; Bylaws of the corporation or association; Any rules relating to the use of common areas, architectural control, maintenance of units, or payment of money as a regular assessment or otherwise in connection with the provisions, maintenance, or service for the benefit of the Property or other real property or common areas; and Further, if the Property is otherwise subject to restrictions or conditions on use, either because of covenants contained in the deed for the Property or because of another recorded document, Seller shall also provide Buyer all documentation relating to any restrictions or conditions, including but not limited to any unrecorded rules or guidelines that may have been issued by any entity responsible for enforcing those restrictions or guidelines.

19 Purchase Contract, RR201, Revised 8/13 For Release 11/13 Delivery of Documents New Section M-1 Seller, at Seller s expense, shall provide the above documents to Buyer no later than ( ) days from the Acceptance Date. Note: SB 502, Act 186 Relating to Real Estate Seller Disclosure: The seller and the buyer may agree in writing to reduce or extend the time periods and deadlines set forth in this subsection.

20 Purchase Contract, RR201, Revised 8/13 For Release 11/13 Receipt of Documents New Section M-1 Upon receipt of the above documents Buyer shall provide Seller with a written acknowledgement within ( ) days of receipt.

21 Purchase Contract, RR201, Revised 8/13 For Release 11/13 Receipt of Documents Document Receipt, RR226. Revised 8/13 For Release 11/13 RECEIPT: The undersigned acknowledges receipt of the check marked items above. Where receipt is required by Section I or M of the Purchase Contract, such receipt shall be retained by Seller for a period of 3 years.

22 Purchase Contract, RR201, Revised 8/13 For Release 11/13 Buyer s Right to Terminate New Section M-1 If within the review period of ( ) calendar days or [fifteen (15) calendar days if left blank] of Buyer s receipt of the documents Buyer does not accept the Property based on information contained in the documents, Buyer may elect to terminate this Purchase Contract pursuant to Paragraph O-2. In the event that this Purchase Contract is terminated, Buyer agrees to promptly return all documents provided pursuant to this paragraph to Seller or Seller s agent, including any other documents provided to Buyer during the escrow period. Seller not being in default, Buyer shall reimburse Seller for the cost of such documentation if the documents are not returned within ( ) days of electing termination of this Purchase Contract.

23 Purchase Contract, RR201, Revised 8/13 For Release 11/13 Buyer s Right to Terminate Chapter 508D, as amended The right of rescission set forth in this subsection shall be in addition to the rights of rescission set forth in sections: 508D-5, Delivery of SRPDS to Buyer, 508D-6, Later discovered inaccurate information, and 508D-13, Later material facts. Buyer s rights of rescission and remedies are found in Sections I-4 through I-6 of the Purchase Contract

24 Purchase Contract, RR201, Revised 8/13 For Release 11/13 New Section M-3 Seller shall provide any additions, supplements, modifications, and amendments to the documents issued during the escrow period.

25 Purchase Contract, RR201, Revised 8/13 For Release 11/13 [ / ] Electronic Delivery of Documents New Section M-5 If any of the above documents are available electronically on the Internet, then in lieu of providing hard copies of the documents as required by Hawaii Revised Statutes Chapter 508D, as amended, Buyer hereby consents that Seller may provide a written statement to Buyer that directs Buyer to the internet address or addresses where the documents are located.

26 Seller s Real Property Disclosure Statement, RR109, Revised 7/13 For Release 11/13 Added to end of Section D. ASSOCIATIONS: Pursuant to Hawaii Revised Statutes Chapter 508D, as amended, Seller is subject to mandatory disclosure obligations if the Property is subject to a recorded Declaration. To the extent that the Act applies, Seller shall provide the documents and any amendments or supplements within the deadlines set forth in Paragraph M-1 of the Purchase Contract.

27 Q & A THANK YOU