REPORT TITLE:
Public Lands

DESCRIPTION:
Provides flexibility in assigning leases to family members of a
deceased lease holder. (HB755 HD2)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        755
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC LANDS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that existing homestead
 
 2 lessees are unable to secure financing to improve their leasehold
 
 3 properties because of the descendant provision contained in
 
 4 section 171-99(e), Hawaii Revised Statutes.  This has resulted in
 
 5 homestead lessees having to live in substandard conditions and
 
 6 being unable to secure loans to renovate or replace their
 
 7 dwellings.  The legislature also finds that the descendant
 
 8 provisions contained in section 171-99(e), Hawaii Revised
 
 9 Statutes, are overly restrictive and can prevent the orderly
 
10 transfer of homestead leases.  Some homestead leases have
 
11 terminated due to the inability of the lessee to comply with
 
12 these descendant provisions.
 
13      The purpose of this Act is to:
 
14      (1)  Allow lenders to accept the leased property as security
 
15           for loans by setting aside the succession provision of
 
16           the lease for the duration of the loan; and
 
17      (2)  To make the leases more freely available to members of
 
18           the lessee's family.
 
19      SECTION 2.  Section 171-99, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "§171-99  Continuation of rights under existing homestead
 
 2 leases, certificates of occupation, right of purchase leases, and
 
 3 cash freehold agreements.(a)  Issuance of land patents to
 
 4 occupier or lessee of homestead lands.  A fee simple patent shall
 
 5 be issued to every existing occupier under a certificate of
 
 6 occupation issued heretofore, and to every lessee under a nine
 
 7 hundred and ninety-nine year homestead lease issued heretofore,
 
 8 of public lands, where the lands have been improved under the
 
 9 certificate or lease, or have been used as a place of residence
 
10 by the occupier or lessee for an aggregate continuous period of
 
11 not less than ten years upon payment to the board of land and
 
12 natural resources of a fair market price, disregarding the value
 
13 of the improvements made by the occupier or lessee, which price
 
14 shall be determined by appraisal as provided for in this chapter;
 
15 provided that the board may exclude from [such] these patents
 
16 areas required as roadways to other lots.
 
17      (b)  Issuance of patent, lessee of right of purchase lease.
 
18 The lessee of any existing right of purchase lease [shall], at
 
19 [such] a time and under [such] conditions [as] that are contained
 
20 in the lease, shall be entitled to a land patent from the board
 
21 conveying to the lessee a fee simple title to the land described
 
22 in the lessee's lease upon the payment of the fair market price
 
23 of the land as determined by appraisal as provided for in this
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 chapter[,]; provided that the lessee has reduced to cultivation
 
 2 twenty-five per cent of the premises and has resided thereon not
 
 3 less than two years and has substantially performed all other
 
 4 conditions of the lessee's lease.
 
 5      (c)  Cash freeholds, agreement, patent, conditions.  At the
 
 6 end of three years from the date of the payment of the first
 
 7 installment, the holder of a freehold agreement is entitled to a
 
 8 land patent for the premises described therein, if the following
 
 9 conditions, in addition to those set forth herein, have been
 
10 substantially performed:
 
11      (1)  Payment of the balance of the purchase price in equal
 
12           installments, in one, two, and three years
 
13           respectively, from the date of the freehold agreement
 
14           with interest annually at the rate of four per cent;
 
15           provided that the freeholder may pay the installment
 
16           before it is due[,] and thereby stop the corresponding
 
17           interest;
 
18      (2)  Cultivation of not less than twenty-five per cent of
 
19           the area of the premises, and the planting and care of
 
20           not less than an average of ten timber, shade, or fruit
 
21           trees per acre, if agricultural land, at any one time
 
22           before the end of the third year, or fencing in the
 
23           [same] premises if pastoral land within [such] that
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           time; provided that if the premises are classed as
 
 2           pastoral-agricultural land, the foregoing alternative
 
 3           conditions shall apply respectively to the two kinds of
 
 4           land; 
 
 5      (3)  Maintenance by the freeholder of the freeholder's home
 
 6           on the premises from the end of the first to the end of
 
 7           the third year;
 
 8      (4)  Conditions for the prevention of waste, the planting of
 
 9           trees or the protection of trees growing or to be
 
10           planted on the premises, or for the destruction of
 
11           vegetable pests that may be on [such] the premises or
 
12           the prevention of the future introduction of [such]
 
13           pests thereon;
 
14      (5)  Payment of all taxes that may be due on account of the
 
15           premises.
 
16      The holder of a freehold agreement shall allow the land
 
17 agents to enter and examine the premises at all reasonable times
 
18 to see that the conditions are being performed.  The holder shall
 
19 not assign or sublet, conditionally or otherwise, the holder's
 
20 interest or any part thereof, under the freehold agreement,
 
21 without the written consent of the board indorsed on the
 
22 agreement; and provided further that freeholders having the whole
 
23 interest in a freehold agreement [may], at any time when all the
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 conditions thereof to be performed by the freeholder up to [such]
 
 2 that time shall have been substantially performed, may surrender
 
 3 to the government the interest by delivery of the freehold
 
 4 agreement to the land agent, with the intention to surrender the
 
 5 [same] interest clearly indorsed thereon[,] and signed by them
 
 6 and duly attested.  The surrender shall release the freeholders
 
 7 from all further duty or performance of the conditions of the
 
 8 instrument surrendered.  But no [such] surrender shall be
 
 9 permitted if any freeholders are under the age of eighteen years,
 
10 unless the minors are represented by statutory guardians; and
 
11 provided further that any freeholder over the age of eighteen may
 
12 assign the freeholder's interest to the freeholder's cotenants.
 
13      (d)  Right of purchase lease; termination, forfeiture, or
 
14 surrender.  Upon the termination of a right of purchase lease by
 
15 lapse of time, or upon the forfeiture or surrender of the lease
 
16 or a freehold agreement, the board [may], in its discretion and
 
17 within the limit of its authority, may open the premises or any
 
18 part thereof for disposition in the manner or for [such] the uses
 
19 as provided in this chapter.  Before the disposition, the fair
 
20 market value thereof shall be established by appraisal.  The
 
21 value attributable to the improvements in the appraisal shall be
 
22 paid to the surrendering lessees or freeholders, upon resale of
 
23 the premises, and the director of finance shall pay the amount of
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 the valuation upon the requisition of the board out of [such] the
 
 2 funds.
 
 3      (e)  [Interests, descent, certificate of occupation or
 
 4 homestead lease.  In case of the death of any occupier or lessee
 
 5 under an existing certificate of occupation or existing homestead
 
 6 lease, all the interest of the occupier or lessee, any
 
 7 conveyance, devise, or bequest to the contrary notwithstanding,
 
 8 in land held by the decedent by virtue of such certificate of
 
 9 occupation or homestead lease shall vest in the relations of the
 
10 decedent as follows:
 
11      (1)  In the widow, widower, or reciprocal beneficiary;
 
12      (2)  If there is no widow, widower, or reciprocal
 
13           beneficiary, then in the children;
 
14      (3)  If there are no children, then in the widows, widowers,
 
15           or reciprocal beneficiaries of the children;
 
16      (4)  If there are no such widows, widowers, or reciprocal
 
17           beneficiaries, then in the grandchildren;
 
18      (5)  If there are no grandchildren, then in the parents or
 
19           surviving parent;
 
20      (6)  If there are no parents or surviving parent, then in
 
21           the sisters and brothers;
 
22      (7)  If there are no sisters and brothers, then in the
 
23           widowers, widows, or reciprocal beneficiaries of the
 
24           sisters and brothers;
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (8)  If there are no such widowers, widows, or reciprocal
 
 2           beneficiaries, then in the nieces and nephews;
 
 3      (9)  If there are no nieces or nephews, then in the
 
 4           widowers, widows, or reciprocal beneficiaries of the
 
 5           nieces and nephews;
 
 6     (10)  If there are no such widowers, widows, or reciprocal
 
 7           beneficiaries, then in the grandchildren of the sisters
 
 8           and brothers;
 
 9     (11)  If there are no grandchildren of any sister or brother,
 
10           then in the State.
 
11      All the successors, except the State, shall be subject to
 
12 the performance of the unperformed conditions of the certificate
 
13 of occupation, or the homestead lease in like manner as the
 
14 decedent would have been subject to the performance if the
 
15 decedent had continued alive; provided that if a widow, widower,
 
16 or reciprocal beneficiary, in whom the interest shall have
 
17 vested, shall thereafter marry again and decease leaving a
 
18 widower, widow, or reciprocal beneficiary and a child or children
 
19 of the first marriage surviving, the interest of the deceased
 
20 shall vest in such child or children; and provided further that
 
21 in case two or more persons succeed together to the interest of
 
22 any occupier or lessee, according to the foregoing provisions,
 
23 they shall hold the same by joint tenancy so long as two or more
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 shall survive, but upon the death of the last survivor, the
 
 2 estate shall descend as provided above.] Assignment; certificate
 
 3 of occupation or homestead lease.  No existing certificate of
 
 4 occupation or existing homestead lease, or fractional interest
 
 5 thereof, shall be transferable or assignable except by
 
 6 conveyance, devise, bequest, or intestate succession and with the
 
 7 prior approval of the board of land and natural resources;
 
 8 provided that transfer or assignment by conveyance, devise, or
 
 9 bequest shall be limited to a member or members of the occupier's
 
10 or lessee's family.
 
11      For the purposes of this section, "family" means the spouse,
 
12 reciprocal beneficiary, children, parents, siblings,
 
13 grandparents, grandchildren, nieces, and nephews of the occupier
 
14 or lessee.
 
15      All the successors shall be subject to the performance of
 
16 the unperformed conditions of the certificate of occupation or
 
17 the homestead lease.
 
18      (f)  Option of cotenant to compel others to buy or sell.  In
 
19 case two or more persons become cotenants under any existing
 
20 right of purchase lease, certificate of occupation, or homestead
 
21 lease by inheritance or otherwise, any one or more of [such] the
 
22 persons, less than the whole number, may file in the office of
 
23 the land agent an offer to the remainder of the persons to buy
 

 
Page 9                                                     755
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 their interest in the premises or to sell them their own interest
 
 2 therein at a stated price, according to the proportion of the
 
 3 respective interest in question, and may deposit with the land
 
 4 agent the amount of the offered price in money, with a fee of
 
 5 $10.  The land agent shall thereupon notify the persons to whom
 
 6 the offer is made of the nature of the offer and order them to
 
 7 file with the land agent their answer within sixty days whether
 
 8 they will buy or sell according to the offer.  If the persons to
 
 9 whom the offer is made file with the land agent within sixty days
 
10 of the time of their receiving the notification, their answer
 
11 stating that they will sell their interest according to the terms
 
12 of the offer, the land agent shall indorse the fact of the sale
 
13 with the amount of the consideration on the lease and pay to
 
14 [such] the persons the amount of the consideration deposited with
 
15 the land agent according to their individual interest; and the
 
16 interest of [such] the persons shall thereupon vest in the
 
17 persons making the offer.  The fact of the transfer shall be
 
18 properly recorded in the official records of the land agent and
 
19 indorsed upon the lease held by the lessee.
 
20      If, however, the persons to whom the offer is made fail to
 
21 answer within sixty days from the time of their being notified of
 
22 the offer or within sixty days from the time the notice of the
 
23 offer mailed to their last known place or places of abode, or
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 shall answer within sixty days that they will buy the interest of
 
 2 the persons making the offer on the terms offered, but fail
 
 3 within sixty days after the notification to deposit the amount
 
 4 representing the value of the interest according to the terms
 
 5 offered, their interest shall vest in the persons making the
 
 6 offer and the amount of the consideration shall be paid by the
 
 7 land agent of them individually or their respective
 
 8 representatives upon application.  In such case, the fact of the
 
 9 transfer shall be recorded and indorsed as above provided.
 
10      In the event that any funds held by the land agent hereunder
 
11 [may] are not [be] paid to the persons to whom properly payable,
 
12 because of the inability of the land agent to locate [such] those
 
13 persons, the funds [shall], after the expiration of one year,
 
14 shall be deposited in the department of budget and finance of the
 
15 State and there abide the claim of any person thereto lawfully
 
16 entitled; provided that no claim to the funds shall be allowed
 
17 unless the claim is made within five years after the deposit.
 
18 Payment of any claim duly filed may be made if the department of
 
19 budget and finance and the board concur in finding the claim
 
20 valid and proper, but if the claimant fails to obtain concurrency
 
21 of the department of budget and finance and the board within
 
22 sixty days of the filing of the claimant's claim, the claimant
 
23 may present a petition to the circuit court of the first judicial
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 circuit in that behalf, notice whereof shall be given to the
 
 2 attorney general, who may appear and defend on behalf of the
 
 3 State, and if the court renders a judgment in favor of the
 
 4 claimant, the department of budget and finance shall pay the
 
 5 amount due without interest.
 
 6      But if the persons to whom the offer is made [shall], within
 
 7 sixty days from the time of the notification, shall make answer
 
 8 to the land agent that they will buy the interest of the offering
 
 9 parties and shall deposit within sixty days with the land agent
 
10 the amount required for the purpose according to the terms of the
 
11 offer, the land agent shall indorse and record the fact of the
 
12 sale as above provided, and pay to the offering parties the
 
13 amount according to their individual interest; and the interest
 
14 of the offering parties shall thereupon vest in the answering
 
15 parties.  In such case, the consideration money deposited by the
 
16 offering parties shall be returned to them.
 
17      (g)  Forfeiture; existing certificate of occupation or
 
18 homestead lease.  The violation of any of the conditions of any
 
19 existing certificate of occupation or homestead lease shall be
 
20 sufficient cause for the board, upon failure of the occupier or
 
21 lessee within a reasonable period of time to remedy the default,
 
22 after notice thereof in the manner provided in section 171-20, to
 
23 take possession of the demised premises without demand or
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 previous entry, with or without legal process, and thereby,
 
 2 subject to section 171-21, terminate the estate created.
 
 3      (h)  Forfeiture; cash freeholds.  In the case of default in
 
 4 the payment of any of the installments due on any cash freehold
 
 5 agreement for thirty days after the [same] installments are due,
 
 6 or failure of performance of any other conditions, the board may
 
 7 take possession of the premises, upon failure of the freeholder
 
 8 within a reasonable period of time to remedy the default, after
 
 9 notice thereof in the manner provided in section 171-20, without
 
10 demand or previous entry, with or without legal process, and
 
11 thereby subject to section 171-21, terminate the estate created.
 
12      (i)  Mortgage of homestead leases.  Whenever an existing
 
13 homestead lease is mortgaged pursuant to section 171-22, the
 
14 consent to mortgage from the board of land and natural resources
 
15 may contain a condition exempting the lease from subsection (e)
 
16 for the duration of the mortgage."
 
17      SECTION 3.  Statutory material to be repealed is bracketed.
 
18 New statutory material is underscored.
 
19      SECTION 4.  This Act shall take effect upon its approval.