CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs. Instructions & Forms
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1 CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs Instructions & Forms
2 CER Leasehold Docs LEASEHOLD DISCLOSURE DOCUMENTS Summary A summary of one of the following type leases.! Apartment Lease! Condominium Conveyance Document! Apartment Deed and Ground Lease! Ground Lease! Proprietary Lease! Other Residential Lease Lease Booklet Form Form Copy of the lease for the subject property. A Guide to Hawaii's Residential Leasehold Buyer's Acceptance or Rejection of the Purchase Contract Agreement to Modify the Time Period for Delivery or Review of Documents FORM INSTRUCTIONS This form is documentation of the Buyer's acceptance or rejection of the terms of the lease and the Purchase Contract. The form also is an acknowledgment that the Buyer has received, read and understands the Leasehold Disclosure Documents and understands the basic facts and consequences of leasehold property ownership. The Buyer must complete, sign, and date the form. This form is optional and is used only if the Buyer and Seller desire to reduce or extend the time period for the delivery by the Seller or review by the Buyer of the Leasehold Disclosure Documents. The Buyer and Seller must complete, sign, and date the form.
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4 AGREEMENT TO MODIFY THE TIME PERIOD FOR DELIVERY OR REVIEW OF DOCUMENTS (Optional Form--see instructions) Buyer and Seller desire to modify the time period for the delivery by Seller or review by Buyer of the Leasehold Disclosure Documents and agree as follows: 1. Seller will deliver the Leasehold Disclosure Documents to Buyer on or before the following date:. 2. Buyer will review the Leasehold Disclosure Documents and deliver written notice of Buyer s acceptance or rejection of the terms of the lease and the Purchase Contract to Seller on or before the following date:. Buyer's Signature Date Buyer's Signature Date Sellers's Signature Date Seller's Signature Date LEASEHOLD PROPERTY TMK PROJECT UNIT ADDRESS street city state zip Hawaii statutory law governing the sale of leasehold property provides in HRS 516D-11 and HRS that the Seller of residential leasehold property must provide the Buyer with the required leasehold disclosure documents within ten (10) days from the date of the acceptance of the DROA (Purchase Contract); and the Buyer will have ten (10) days from the date of receipt of the leasehold disclosure documents from the Seller to review the disclosure documents and accept or reject the terms of the lease and the DROA (Purchase Contract). The statutory law further provides that the Seller and the Buyer, on a standardized form, may agree to reduce or extend the time period for delivery or review of the applicable leasehold disclosure documents. CER Leasehold Docs cerhawaii.com
5 CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs A Guide To Hawaii's Residential Leasehold
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30 CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs Summary of the Lease
31 CER Leasehold Docs Order No: Issue Date: Apr Seller: Joan B Reep CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs This Summary is valid for 90 days from the issue date and registered in the name of the Seller. The Summary is nontransferable and not valid for use by any other party in a subsequent sale transaction of the property. SUMMARY OF THE LEASE Note to Prospective Buyer The fee interest in the land of the project is owned by a trust and administered by a trustee. The AOAO of Discovery Bay has purchased a portion of the beneficial interest in the trust. The ownership by a condominium association of a beneficial interest in a land trust holding the fee interest is uncommon. The AOAO ownership will affect the application, operation or interpretation of the surrender and lease rent enegotiation provisions of the lease. See the sections of this Summary titled Surrender and How Renegotiated Lease Rents Are To Be Calculated.A prospective buyer of this property is advised to obtain current information on the beneficial interest from the AOAO and seek legal or other competent advice. Section One Major Provisions of the Lease PROPERTY LESSOR Project: Discovery Bay Apartment No : 3403 Tax Map Key: : 0253 Common Interest:.1324% (Ref: top of pg. 1 of the lease) Hawaiian Trust Company, L mited (Ref: opening, pg. 1 of the lease) The lessor interest is presently held by Bank of Hawaii, Trustee. LENGTH OF LEASE TERM December 1, 1976 to December 31, 2039 (Ref: "To Have And To Hold", pg. 3 of the lease) FIXED LEASE RENT NON-TRANSFERABLE $ per year through December 31, 1987 $ per year through December 31, 1997 $ per year through December 31, 2007 (Ref: Section IV 1(a), (b) & (c) pg. 4 of the lease) $ per month through December 31, 2018 (includes GET) The lease rent was renegotiated as of January 1, CER is informed the renegotiated lease rent is the amount indicated above. The prospective buyer is advised to confirm the lease rent and obtain additional information from the AOAO of Discovery Bay or other appropriate party.
32 LEASE RENT RENEGOTIATION DATES CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs January 1, 2008 January 1, 2019 January 1, 2030 (Ref: Section IV 1 (d), pg. 4 of the lease) HOW RENEGOTIATED LEASE RENTS ARE TO BE CALCULATED SURRENDER Lessor and Apartment Owner, through the Association, will attempt to determine the renegotiated lease rent by agreement. If Lessor and the Association are unable to reach an agreement, the renegotiated lease rent will be determined by appraisal. The selection of the appraisers and determination of renegotiated lease rent are described below. Selection of Appraisers Lessor and the Association will each choose a qualified appraiser. If either party fails to choose an appraiser, the party who has chosen an appraiser may request that a judge of the Circuit Court choose an appraiser. The two appraisers will then choose the third appraiser. If the two appraisers do not choose a third appraiser, either party may request that a judge of the Circuit Court choose the third appraiser. The three appraisers will determine the renegot ated lease rent and a decision by a majority of the appraisers will be final and binding upon the parties. Each party will pay the cost of their own appraiser and one half the remaining costs of the appraisal. Renegotiated Lease Rent for the Project The land of the Project for purposes of the appraisal will consist of several parcels of land described in the lease. The appraisers will determi e the fair market value of each parcel as if were vacant without any buildings or other improvements and in accordance with the other terms regarding the determination of market value specif ed in the lease. The annual renegotiated lease rent for the Project will be equal to the fair market value of the land multiplied by the then prevailing rate of return on similar land as determined by the appraisers. However, the lease rent in any renegotiated rental period will not be less than the lease rent of the immediately preceding rental period. Apartment Owner's Renegotiated Lease Rent Apartment Owner's renegotiated lease rent will be equal to the total renegotiated lease rent determined for the Project multiplied by Apartment Owner s proportionate share as established by the Declaration. (Ref: Section IV 1 (d), pg. 4 & A, pp. 7-8 of the lease) NON-TRANSFERABLE Apartment Owner will return the leased land to Lessor at the end of the lease term or upon earlier termination of the lease. Apartment Owner, together with the other apartment owners, may remove or demolish the condominium apartment buildings. If the buildings are not removed or demolished, then Apartment Owner and the other apartment owners, acting as the Association, will deliver title and possession of the buildings to Lessor. The buildings must be delivered to Lessor in good condition except for reasonable wear and tear. MEPC will pay a total of $100, for the buildings and Apartment Owner will receive a proportionate share of that amount. (Ref: Section IV 16, pg. 6 of the lease) Page 2 of 6
33 Section Two Additional Provisions of the Lease CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs I II III IV APARTMENT CONVEYANCE. MEPC transfer title to the apartment and an undivided interest in the common elements of the Project to Apartment Owner. GROUND CONVEYANCE. Lessor leases an undivided interest in the land of the Project to Apartment Owner. Apartment Owner's undivided interest in the land is equal to Apartment Owner's undivided interest in the common elements. Lessor will not interfere with Apartment Owner's ownership, use or possession of the property if Apartment Owner pays lease rent when due and performs Apartment Owner's other obligations under the lease. INTERRELATIONSHIP OF INTERESTS. Apartment Owner's rights in the apartment, common elements and undivided interest in the land of the Project are connected and cannot be separately transferred. Apartment Owner has the rights and obligations of an apartment owner described in the Declaration and Bylaws. Apartment Owner will observe the provisions of the Declaration and Bylaws. APARTMENT OWNER'S COVENANTS 1. RENTAL. This section of the lease is described above in Section One of this summary. 2. MANAGING AGENT. Apartment Owner, through the Assoc ation, will appoint a managing agent for the Project. The managing agent will be responsible for the management of the Project and the maintenance and repair of the common elements. Apartment Owner will remain directly liable to Lessor for payments or other obligations under the lease even though a managing agent is involved. 3. IMPROVEMENTS REQUIRED BY LAW. Apartment Owner, through the Association, will build and maintain fences, sewers, drains, sidewalks, walls and other improvements required by law. 4. PAYMENT OF COMMON EXPENSES. Apartment Owner, individually or through the Association, will pay the expenses of the Project. These expenses include (a) Apartment Owner's proportionate share of common expenses, (b) assessments made by the Association, (c) utilities, and (d) any charges against the Project made by governmental authorities. If Apartment Owner fails to pay Apartment Owner's share of common expenses, this will not be considered a default entitling Lessor to exercise a power of sale, provided that the Association diligently forecloses any lien it may have against Apartment Owner's interest in the Project. 5. PAYMENT OF TAXES AND ASSESSMENTS. Apartment Owner will pay all real property taxes and assessments whether they are imposed on Lessor, Apartment Owner, or the property and improvements NON-TRANSFERABLE 6. PAYMENT OF GROSS INCOME TAX. Apartment Owner will pay general excise taxes, or similar taxes, imposed on Lessor as a result of the receipt of Apartment Owner's rental or other payments. 7. CONSTRUCTION OF IMPROVEMENTS. Apartment Owner, individually or through the Association, will not construct any building or other improvements, or alter any existing buildings or other improvements, or place signs on any buildings without complying with the provisions of this section of the lease. In most cases any construction or alteration will require the approval of Lessor, the Board of Directors of the Association, and a majority of the apartment owners, including all owners who may be affected by the construction or alteration. 8. BOND. Apartment Owner, or the Association, must provide Lessor with evidence that a bond has been secured before any improvements costing more than $5, may be constructed on the Project. The bond protects Lessor against claims and insures that the construction will be properly completed. Page 3 of 6
34 CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs V 9. OBSERVANCE OF LAWS. Apartment Owner will keep the land and apartment in a clean and sanitary condition. Apartment Owner will observe all laws, ordinances, rules and regulations made by any governmental authority that apply to the apartment or Project. Apartment Owner will defend and protect Lessor against all claims resulting from the failure to observe all laws, ordinances, rules, regulations and other provisions of this section of the lease. 10. INDEMNITY AND LIABILITY INSURANCE. Apartment Owner, through the Association, will obtain general liability insurance of the type and in the amount specified in this section of the lease. Liability insurance protects against claims resulting from the use or occupancy of the Project. The limits of the insurance must be reviewed at least annually by the Board of Directors of the Association. Apartment Owner, as a member of the Association, will not vote to lower the insurance limits. 11. ASSIGNMENT AND SUBLETTING. Apartment Owner may assign, mortgage or sublet Apartment Owner's interest in the Project without Lessor's consent. The assignment or sublease document must contain a provision which states that the party receiving the assignment or sublease promises to perform all of Apartment Owner's obligations under the lease. After an assignment or sublease, Apartment Owner is not released from any obligations under the lease unless Lessor consents in writing. Apartment Owner must deliver a true copy of any assignment, mortgage or sublease to Lessor. 12. LESSOR'S COSTS AND EXPENSES. Apartment Owner will pay all costs and expenses, including reasonable attorneys fees, which Lessor incurs by (a) enforcing Apartment Owner's agreements in the lease, (b) remedying any failure of Apartment Owner to perform Apartment Owner's agreements in the lease, (c) recovering possession of the property, (d) collecting lease rent or other payments from Apartment Owner, or (e) being made a party to any litigation involving Apartment Owner (except condemnation or any proceeding affecting Lessor's title) in which Lessor is not at fault. 13. INDEMNITY FOR CLAIMS. Apartment Owner will indemni y Lessor against all claims resulting from any accident that occurs on the property, any nuisance on the property, or the failure of Apartment Owner to maintain the property in a safe condition 14. NO LIENS. Apartment Owner will not allow any claims against Apartment Owner's interest in the Project other than permitted mortgages. 15. WASTE AND UNLAWFUL USE. Apartment Owner will not misuse or destroy any part of the land of the Project, or use the land for any unlawful, improper or offensive purpose. 16. SURRENDER. This section of the lease is described above in Section One of this summary. MUTUAL COVENANTS A. APPRAISAL This section of the lease is described above in Section One of this summary. NON-TRANSFERABLE B. CONDOMINIUM STATUS. The property was established as a condominium project under Hawaii law. Apartment Owner has the rights and obligations of an apartment owner as described in the Declaration and Bylaws. Apartment Owner agrees to perform, individually or through the Association, all of the provisions of the Declaration and Bylaws relating to the land of the Project. Apartment Owner's vote on certain matters of the Project specified in this section of the lease will not be effective without Lessor's consent. Apartment Owner will exert all reasonable efforts to cause the Association and the Managing Agent to observe the provisions of the Declaration and Bylaws and maintain the land in good condition. C. CONDEMNATIONS. Taking of property by a governmental authority for a public purpose is known as a "condemnation. The governmental authority must pay compensation to the owner of any property that is condemned and taken. If the whole or any part of Apartment Owner's interests in the Project is condemned, or is sold to the authority because the authority threatens to condemn Apartment Page 4 of 6
35 Owner's interests, Apartment Owner's interest in the land of the Project will be terminated. Apartment Owner will not have a claim against Lessor or others for the loss of Apartment Owner's leasehold interest. CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs If only a portion of the Project is condemned, (1) the Project may be terminated, or (2) the remaining land and improvements of the Project may be reconstituted as a new condominium project. The compensation for the taking of the land will be paid to Lessor. The compensation for the taking of the improvements will be paid to Apartment Owner and the other apartment owners and their mortgage lenders, if any, in accordance with the provisions of this section of the lease. The condemnation of Apartment Owner's leasehold interest does not excuse Apartment Owner from any obligations under the lease that Apartment Owner is able to perform after the condemnation, including the obligation to pay lease rent. Apartment Owner may make a claim against the governmental authority for compensation. D. CASUALTY INSURANCE. Apartment Owner, through the Association, will obtain insurance which insures the Project against fire and other casualties. The insurance must be of the type and in the amount specified in this section of the lease. Any insurance proceeds received due to an insured casualty must be used by the Association to rebuild or repair the damaged improvements unless rebuilding is not permissible under applicable laws and regulations. Apartment Owner must pay a proportionate share of any difference between the cost of rebuilding or repair and the amount of the insurance proceeds. If the damaged improvements are not repaired or rebuilt, Apartment Owner will receive a portion of the insurance proceeds. E. CONSENT TO MORTGAGE. Apartment Owner may mortgage the lease to an established lending institution without Lessor's further consent. A true copy of the mortgage must be delivered to Lessor. F. NOTICE. Notices to Lessor or Apartment Owner must be sent by registered or certified mail. G. PROTECTION OF MORTGAGE. Mortgage lenders are given certain rights specified in this section of the lease. These rights include: 1. Lessor will not terminate the lease if Apartment Owner is in default without first giving notice of the default to the lender, and allowing the lender a specified time period to cure the default or promise to cure the default. 2. If the lender diligently commences foreclosure proceedings and pays Apartment Owner's lease rent, Lessor will allow dditional time for the lender to cure certain defaults by Apartment Owner. H. DEFEASANCE. Apartment Owner is in default under the lease if (1) Apartment Owner fails to pay lease rent within 30 days after it is due, or (2) Apartment Owner fails to keep any agreements in the lease for a period of 30 days after Lessor gives written notice of the failure to Apartment Owner, or (3) Apartment Owner abandons the property, or (4) Apartment Owner is bankrupt, insolvent or makes an assignment for the benefit of creditors, or Apartment Owner's interests in the Project are taken by a court to satisfy a judgement against Apartment Owner. NON-TRANSFERABLE If Apartment Owner is in default, Lessor will have a lien with a power of sale on Apartment Owner's interest in the Project and may foreclose and sell the apartment and Apartment Owner's interest in the land by public auction. The proceeds from the sale would first be used to pay Lessor's costs of the sale, including attorney's fees, and to pay all lease rent and other payments then due. Apartment Owner would receive any remaining proceeds. I. DEFINITIONS. Terms used in the lease are defined in this section of the lease. Page 5 of 6
36 NOTES CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs CER Leasehold Docs 1. A condominium conveyance document has the following characteristics: (a) The Grantor transfers title to the apartment and an undivided percentage interest in the common elements to the Grantee (Apartment Owner). (b) The Lessor leases an undivided percentage interest in the land of the Project to the Lessee (Apartment Owner). (c) The Grantor and the Lessor may be the same or different persons or entities. The Grantee and the Lessee are the same person or entity. (d) The interests in the apartment, common elements, and land must always be transferred together. NON-TRANSFERABLE Page 6 of 6
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