Haw. Code R. § 15-308-106 - Permitted transfers

(a) The following permitted transfers shall not result in the corporation's percentage share of the net appreciation becoming due and payable. However, the corporation's consent for the following transfers shall be required:

(1) Creation of a lien or encumbrance which does not affect rights of occupancy provided that the total amount of liens and encumbrances cannot be greater than the sum of eighty per cent of the owner's original purchase price and the owner's share of net appreciation. In the case where a house lot was purchased and the owner contributed his labor to construct the dwelling, the then fair market value of the dwelling shall be included as part of the owner's share of net appreciation. In extreme hardship cases involving health and safety, the corporation may allow up to an additional twenty per cent of the owner's original purchase price and the owner's share of net appreciation provided that the lien or encumbrance would be a loan for capital improvement purposes only;

(2) Transfer by devise, descent, or operation-of law upon the death of a joint tenant or tenant by the entirety;

(3) Transfer to a relative who meets eligibility requirements upon death of owner;

(4) Transfer to spouse or children who meet eligibility requirements;

(5) Transfer due to a property settlement whereby the spouse who meets eligibility requirements becomes owner;

(6) Transfer into an inter vivos trust in which the owners remain the primary beneficiary and does not affect their rights of occupancy; or

(7) Transfer into or from a community land trust or other non-profit organization established to maintain or sustain long-term housing affordability.

(b) If the corporation's rights under this subchapter are derived from the sale of a vacant lot by the corporation, the use of the land as security for a loan to be used by the owner to purchase the land or to finance the construction of a principal residence is a permitted transfer to which the corporation's consent is not required. The corporation shall consent in writing to the subordination of its lien or contingent lien rights under this subchapter to the lien of any mortgage placed on the property to finance the construction of a principal residence or the purchase of the vacant lot.

Notes

Haw. Code R. § 15-308-106

[Eff 1/15/2022] (Auth: HRS § 201H-4) (Imp: HRS § 201H-47) Am and comp 12/10/2022