Bill Text: HI SB508 | 2019 | Regular Session | Introduced

Hawaii Senate Bill 508 (Prior Session Legislation)

Introduced

Bill Title: Relating To Transfer Fees.

Spectrum: Moderate Partisan Bill (Democrat 8-1)

Status: (Introduced - Dead) 2019-02-07 - The committee on CPH deferred the measure. [SB508 Detail]

Download: Hawaii-2019-SB508-Introduced.html

THE SENATE	S.B. NO.	508
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII

A BILL FOR AN ACT

relating to TRANSFER FEES.

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

SECTION 1. The legislature finds that condominium associations, homeowners associations, other housing cooperative entities, and property management companies may charge a transfer fee to cover the expenses of the necessary transitioning activities and paperwork from the seller to the buyer during a real estate transaction. The association or property management company is responsible for providing accurate and current information to an escrow company in a timely manner and collecting all amounts due upon closing. The transfer fee may include the costs of providing: liability for information provided; verification of account balance; identification of any past due or outstanding amounts; research to verify identification of the selling party, as needed; identification of any outstanding covenant violations or fines; identification of any outstanding architectural review issues or violations; determination of working capital, if applicable; and any other information pertinent to the closing and transfer of property at a particular community.

The purpose of this Act is to require an itemized accounting of the services covered by transfer fees to increase transparency in the transaction of real estate managed by homeowners associations and property management companies.

SECTION 2. Section 501-232, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) This section shall not apply to the following fees or charges required by a deed restriction or other covenant running with the land in connection with the transfer of real property:

(1) Any interest, charge, fee, or other amount payable by a borrower to a lender pursuant to a loan secured by real property, including any fee payable to the lender for consenting to an assumption of the loan or transfer of the real property, for providing an estoppel letter or certificate, or for any shared appreciation interest or profit participation or other consideration payable to the lender in connection with the loan;

(2) Any fee, charge, assessment, or fine payable to an association as defined in section 514B-3, a cooperative housing corporation as described in section 421I-1, a limited-equity housing cooperative as defined in section 421H-1, or a planned community association as defined in section 607-14 and described in chapter 421J, pursuant to a declaration, covenant, or law applicable to such association or corporation, including a fee or charge to change the association or corporation's records as to the owner of the real property or to provide an estoppel letter or certificate[;], to the extent that the fee, charge, assessment, or fine includes an itemized accounting of services rendered and covered by the fee, charge, assessment, or fine;

(3) Any fee or charge payable to a lessor under a lease of real property, including a fee or charge payable to the lessor for consenting to an assignment of the lease, for providing an estoppel letter or certificate, or to change the lessor's records as to the holder of the lessee's interest in the lease;

(4) Any consideration payable to the holder of an option to purchase an interest in real property or the holder of a right of first refusal or first offer to purchase an interest in real property for waiving, releasing, or not exercising the option or right upon transfer of the real property to another person;

(5) Any fee, charge, shared appreciation interest, profit participation, or other consideration, payable by:

(A) A person engaged in the business of the development of real property for resale to others and not for the person's own use or the use of the person's parent, affiliates, subsidiaries, or relatives;

(B) A person who acquires the real property for the purpose of engaging in the business of the development of real property for resale to others or for the purpose of reselling the real property to a person engaged in the business of the development of real property for resale to others; or

(C) A person who purchases real property initially transferred at a price below the then prevailing market value of the real property pursuant to an affordable housing program established by the seller; provided that such fee, charge, shared appreciation interest, profit participation, or other consideration becomes payable, if ever, within ten years of the recording of the deed restriction or other covenant running with the land imposing the fee or charge on the real property;

(6) Any fee or charge payable to a government entity;

(7) Any fee, charge, assessment, or other amount payable pursuant to a deed restriction or other covenant running with the land, regardless of when filed or recorded, that was required by a litigation settlement that was approved by a court of competent jurisdiction before June 22, 2010;

(8) Any reasonable fee payable to a qualified organization for:

(A) The qualified organization's management, stewardship, or enforcement of a qualified real property interest in the real property, granted exclusively for a conservation purpose; or

(B) Educating new owners of the real property on the restrictions imposed by the qualified real property interest granted exclusively for a conservation purpose.

As used in this paragraph, "qualified real property interest", "qualified organization", and "conservation purpose" have the same meaning as in section 170(h)(2), (3), and (4), respectively, of the Internal Revenue Code."

SECTION 3. Section 502-112, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) This section shall not apply to the following fees or charges required by a deed restriction or other covenant running with the land in connection with the transfer of real property:

(5) Any fee, charge, shared appreciation interest, profit participation, or other consideration, payable by:

(6) Any fee or charge payable to a government entity;

(7) Any fee, charge, assessment, or other amount payable pursuant to a deed restriction or other covenant running with the land, regardless of when recorded or filed, that was required by a litigation settlement that was approved by a court of competent jurisdiction before June 22, 2010; or

(8) Any reasonable fee payable to a qualified organization for:

(A) The qualified organization's management, stewardship, or enforcement of a qualified real property interest in the real property, granted exclusively for a conservation purpose; or

(B) Educating new owners of the real property on the restrictions imposed by the qualified real property interest granted exclusively for a conservation purpose.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

Real Property Transfer Fee; Itemized Accounting

Description:

Requires real property transfer fees assessed by a condominium association, a cooperative housing corporation, a limited-equity housing cooperative, or a planned community association to include an itemized accounting of services rendered and covered by the transfer fees.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.