Report Title:

Real Property; Covenants

Description:

Prohibits a deed restriction or covenant that requires a transferee of real property to pay a transfer fee to the person imposing the deed restriction or covenant, in connection with a transfer of real property.

THE SENATE	S.B. NO.	1241
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO REAL PROPERTY TRANSACTIONS.

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

     SECTION 1.  Chapter 518, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§518-   Prohibition on transfer fees; covenants. (a)  A deed restriction or other covenant running with the land applicable to the sale of residential real property that requires a transferee of residential real property, or the transferee's heirs, successors, and assigns, to pay to a declarant or other person imposing a deed restriction or covenant on the property or a third party designated by a transferor of the property, a fee in connection with a future transfer of the property shall be prohibited and unenforceable.  A deed restriction or other covenant running with the land that violates this section, or a lien purporting to encumber the land to secure a right under a deed restriction or other covenant running with the land that violates this section is void and unenforceable.

(b)  This section shall not apply to a deed restriction or other covenant running with the land that requires a fee associated with the conveyance of property that is payable to a government entity."

     SECTION 2.  Chapter 518, Hawaii Revised Statutes, is amended by amending its title to read as follows:

"COVENANTS IN [LEASES] REAL PROPERTY TRANSACTIONS"

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

INTRODUCED BY:

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