| 47 | | - | SECTION 1. The legislature finds that under the current land court system, any amendment to the documents governing a condominium or planned community must be noted on the certificate of title for each unit. Authorizing the use of a master certificate of title that lists encumbrances of general application will permit certificates of title for individual units to incorporate by reference the encumbrances on the master certificate of title. This will eliminate the need to change the certificate of title for each unit to reflect any changes in the encumbrances of general application to the condominium or planned community. Accordingly, the purpose of this Act is to simplify and streamline the operation of the land court by authorizing the use of a master certificate of title for new common interest communities. SECTION 2. Chapter 501, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows: "§501- New common interest communities. (a) Upon the recording of a declaration creating a common interest community, the assistant registrar shall: (1) Prepare a master certificate of title for the common interest community, assign a certificate number to it, and index it in the same manner as for other certificates of title. The name of the owner shall be determined by the assistant registrar and will incorporate the name of the new common interest community; (2) Issue separate certificates of title for each unit in the common interest community, including any common area established as a unit of a planned community; provided that the assistant registrar shall not be required to issue separate certificates of title for the units of a planned community if the subdivision of the registered land of the planned community has not taken place; and (3) Endorse the certificate of title for each unit in the common interest community with the following statement: "subject to encumbrances, liens, and interests noted on master certificate of title no. .". (b) In addition to the requirements under subsection (a), upon the recording of a declaration creating a common interest community in a condominium, the assistant registrar shall include the following statement in the description of the land on the certificate of title for each unit: "an undivided percentage interest in the registered land of the condominium equal to the common interest appurtenant to unit , as set forth in the declaration establishing the condominium or other percentage interest as hereafter established for said condominium unit by any amendment of the declaration establishing the condominium or pursuant to any declaration of merger effecting a legal merger of two or more condominium projects into a single condominium project.". §501- Effect of master certificate of title. (a) The entry of a notation on the master certificate of title shall have the same effect as if the notation was entered on the certificates of title for the individual units of the common interest community as of the date and time shown on the master certificate of title. (b) Any documents or instruments listed on the master certificate of title for a planned community shall be deemed deleted from the certificate of title for the individual units of that planned community; provided that it shall not be necessary for the assistant registrar to delete the notation of the documents and instruments from the certificate of title for the individual units. In the event of a conflict between the documents and instruments listed on the master certificate of title for a planned community and the certificate of title for an individual unit, the master certificate of title shall govern unless the court determines that there has been an error in the preparation of the master certificate of title. If the court determines that there has been an error, the assistant registrar shall correct the master certificate of title in accordance with the determination of the court. (c) Nothing in this section shall in any way be construed to alter or otherwise affect the validity or order of priority of documents and instruments registered prior to, in conjunction with, or after the issuance of a master certificate of title. §501- Content of master certificate of title. (a) A master certificate of title shall not state or note a lien or encumbrance that pertains solely or principally to the interest of an individual owner in the common interest community, including but not limited to: (1) The interest of the individual unit owners of a condominium project or planned community; (2) An apartment lease, unit lease, or condominium conveyance document; (3) A deed or agreement of sale of an individual unit; (4) A mortgage, deed of trust, or other lien or encumbrance made by an individual owner on the individual owner's interest in a common interest community; (5) A lien or notice of lien in favor of an association against an individual owner's interest in a common interest community; (6) A judgment, decree, order of court, attachment, writ, or other process against an individual owner's interest in a common interest community; (7) A mechanic's or materialman's lien upon an individual owner's interest in a common interest community; (8) A lis pendens, notice of pendency of action, notice, affidavit, demand, certificate, execution, copy of execution, officer's return, or other instrument relating to an individual owner's interest in a common interest community and required to be registered in connection with the enforcement or foreclosure of any lien, whether by way of power of sale pursuant to chapter 667, or otherwise; (9) A power of attorney not reserved in the governing documents and given by an individual owner of an interest in a common interest community or by the vendor or vendee under an agreement of sale for the sale of the owner's unit, a mortgagee or other lienor having a mortgage or lien upon the owner's interest in the common interest community, or another party holding a claim or encumbrance against or an interest in an individual owner's unit; or (10) An instrument assigning, extending, continuing, dissolving, discharging, releasing in whole or in part, reducing, canceling, extinguishing, or otherwise modifying or amending any of the foregoing instruments. (b) After issuance of the master certificate of title, the following documents and instruments shall be noted on the master certificate of title, and not on the owner's certificate of title for the individual unit: (1) Any additional governing documents, including but not limited to any amendment or supplement to the existing governing documents and any declaration of annexation or deannexation; (2) Any instrument evidencing the transfer of any special developer or declarant rights under the governing documents of the common interest community; (3) Any easement, license, common element lease, or common area lease encumbering or in favor of the registered land of a condominium project; (4) Any lien against the common elements of a condominium project, but only to the extent permitted by chapter 514B or permitted by any predecessor condominium statute during the period in which the predecessor statute was in effect; and (5) Any instrument assigning, extending, continuing, dissolving, discharging, releasing in whole or in part, reducing, canceling, extinguishing, or otherwise modifying or amending any of the documents or instruments noted on the master certificate of title." SECTION 3. Section 501-20, Hawaii Revised Statutes, is amended by adding five new definitions to be appropriately inserted and to read as follows: ""Association" means the association of owners of a condominium, a planned community association as defined in section 607-14, or the association of a planned community governed by chapter 421J. "Common interest community" means a condominium created in this State, whether established pursuant to chapter 514B or any predecessor statute, or a planned community governed by chapter 421J. "Governing documents" means any documents or instruments registered pursuant to this chapter that create or govern a common interest community or its association as determined by the assistant registrar. Examples of the term include: a declaration of a planned community, as defined under chapter 421J; the declaration establishing a condominium, by whatever name denominated; the bylaws of an association of owners of a condominium; a condominium map; a declaration of merger of condominium phases; any instrument effecting a merger of condominium phases; an assignment of developer's or declarant's rights; and any amendment or supplement to or restatement of any of the foregoing instruments. "Master certificate of title" means a certificate of title that: (1) Lists the governing documents of a common interest community; (2) In the case of a condominium, describes the registered land of the condominium and all easements, rights, and interests appurtenant to the registered land of the project as established or evidenced by instruments registered in the office of the assistant registrar; and (3) Lists the documents and instruments of general application to the registered land of the common interest community as determined by the assistant registrar; provided that a master certificate of title need not list documents and instruments noted in another master certificate of title, such as a master declaration of covenants, conditions, and restrictions governing multiple planned communities. "Unit" means: (1) In the case of a condominium, a condominium unit in the condominium; and (2) In the case of a planned community, a unit as that term is defined in chapter 421J." SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 2050. |
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| 47 | + | SECTION 1. The legislature finds that under the current land court system, any amendment to the documents governing a condominium or planned community must be noted on the certificate of title for each unit. Authorizing the use of a master certificate of title that lists encumbrances of general application will permit certificates of title for individual units to incorporate by reference the encumbrances on the master certificate of title. This will eliminate the need to change the certificate of title for each unit to reflect any changes in the encumbrances of general application to the condominium or planned community. Accordingly, the purpose of this Act is to simplify and streamline the operation of the land court by authorizing the use of a master certificate of title for common interest communities. SECTION 2. Chapter 501, Hawaii Revised Statutes, is amended by adding four new sections to be appropriately designated and to read as follows: "§501- New common interest communities. (a) Upon the recording of a declaration creating a common interest community, the assistant registrar shall: (1) Prepare a master certificate of title for the common interest community, assign a certificate number to it, and index it in the same manner as for other certificates of title. The name of the owner shall be "homeowners"; (2) Issue separate certificates of title for each unit in the common interest community, including any common area established as a unit of a planned community; provided that the assistant registrar shall not be required to issue separate certificates of title for the units of a planned community if the subdivision of the registered land of the planned community has not taken place; and (3) Endorse the certificate of title for each unit in the common interest community with the following statement: "subject to encumbrances, liens, and interests noted on master certificate of title no. .". (b) In addition to the requirements under subsection (a), upon the recording of a declaration creating a common interest community in a condominium, the assistant registrar shall include the following statement in the description of the land on the certificate of title for each unit: "an undivided percentage interest in the registered land of the condominium equal to the common interest appurtenant to unit , as set forth in the declaration establishing the condominium or other percentage interest as hereafter established for said condominium unit by any amendment of the declaration establishing the condominium or pursuant to any declaration of merger effecting a legal merger of two or more condominium projects into a single condominium project.". If two or more units in a condominium bear identical unit numbers, the assistant registrar may establish a property identification number or other alternate means of identifying the units. §501- Existing common interest communities. (a) Upon the recording of an amendment or supplement to the governing documents of a common interest community, the assistant registrar may: (1) Prepare a master certificate of title for the common interest community, assign a certificate number to it, and index it in the same manner as for other certificates of title. The name of the owner shall be "homeowners"; and (2) Endorse the certificate of title for each unit in the common interest community with the following statement: "subject to encumbrances, liens, and interests noted on master certificate of title no. .". (b) In addition to the requirements under subsection (a), upon the recording of an amendment or supplement to the governing documents of a common interest community in a condominium, the assistant registrar may change the description of the land on the certificate of title for each unit to include the following statement: "an undivided percentage interest in the registered land of the condominium equal to the common interest appurtenant to unit , as set forth in the declaration establishing the condominium, as amended, or other percentage interest as hereafter established for said condominium unit by any further amendment of the declaration establishing the condominium or pursuant to any declaration of merger effecting a legal merger of two or more condominium projects into a single condominium project.". If two or more units in a condominium bear identical unit numbers, the assistant registrar may establish a property identification number or other alternate means of identifying the units. (c) The association of a common interest community, or any owner of a unit in a common interest community, may petition the court for issuance of a master certificate of title for that common interest community. Upon approval of the petition, the assistant registrar shall proceed according to subsection (a) or (b). §501- Effect of master certificate of title. (a) The entry of a notation on the master certificate of title shall have the same effect as if the notation was entered on the certificates of title for the individual units of the common interest community as of the date and time shown on the master certificate of title. (b) Any documents or instruments listed on the master certificate of title for a planned community shall be deemed deleted from the certificate of title for the individual units of that planned community; provided that it shall not be necessary for the assistant registrar to delete the notation of the documents and instruments from the certificate of title for the individual units. In the event of a conflict between the documents and instruments listed on the master certificate of title for a planned community and the certificate of title for an individual unit, the master certificate of title shall govern unless the court determines that there has been an error in the preparation of the master certificate of title. If the court determines that there has been an error, the assistant registrar shall correct the master certificate of title in accordance with the determination of the court. (c) Nothing in this section shall in any way be construed to alter or otherwise affect the validity or order of priority of documents and instruments registered prior to, in conjunction with, or after the issuance of a master certificate of title. §501- Content of master certificate of title. (a) A master certificate of title shall not state or note a lien or encumbrance that pertains solely or principally to the interest of an individual owner in the common interest community, including but not limited to: (1) The interest of the individual unit owners of a condominium project or planned community; (2) An apartment lease, unit lease, or condominium conveyance document; (3) A deed or agreement of sale of an individual unit; (4) A mortgage, deed of trust, or other lien or encumbrance made by an individual owner on the individual owner's interest in a common interest community; (5) A lien or notice of lien in favor of an association against an individual owner's interest in a common interest community; (6) A judgment, decree, order of court, attachment, writ, or other process against an individual owner's interest in a common interest community; (7) A mechanic's or materialman's lien upon an individual owner's interest in a common interest community; (8) A lis pendens, notice of pendency of action, notice, affidavit, demand, certificate, execution, copy of execution, officer's return, or other instrument relating to an individual owner's interest in a common interest community and required to be registered in connection with the enforcement or foreclosure of any lien, whether by way of power of sale pursuant to chapter 667, or otherwise; (9) A power of attorney not reserved in the governing documents and given by an individual owner of an interest in a common interest community or by the vendor or vendee under an agreement of sale for the sale of the owner's unit, a mortgagee or other lienor having a mortgage or lien upon the owner's interest in the common interest community, or another party holding a claim or encumbrance against or an interest in an individual owner's unit; or (10) An instrument assigning, extending, continuing, dissolving, discharging, releasing in whole or in part, reducing, canceling, extinguishing, or otherwise modifying or amending any of the foregoing instruments. (b) After issuance of the master certificate of title, the following documents and instruments shall be noted on the master certificate of title, and not on the owner's certificate of title for the individual unit: (1) Any additional governing documents, including but not limited to any amendment or supplement to the existing governing documents and any declaration of annexation or deannexation; (2) Any instrument evidencing the transfer of any special developer or declarant rights under the governing documents of the common interest community; (3) Any easement, license, common element lease, or common area lease encumbering or in favor of the registered land of a condominium project; (4) Any lien against the common elements of a condominium project, but only to the extent permitted by chapter 514B or permitted by any predecessor condominium statute during the period in which the predecessor statute was in effect; and (5) Any instrument assigning, extending, continuing, dissolving, discharging, releasing in whole or in part, reducing, canceling, extinguishing, or otherwise modifying or amending any of the documents or instruments noted on the master certificate of title." SECTION 3. Section 501-20, Hawaii Revised Statutes, is amended by adding five new definitions to be appropriately inserted and to read as follows: ""Association" means the association of owners of a condominium, a planned community association as defined in section 607-14, or the association of a planned community governed by chapter 421J. "Common interest community" means a condominium created in this State, whether established pursuant to chapter 514B or any predecessor statute, or a planned community governed by chapter 421J. "Governing documents" means any documents or instruments registered pursuant to this chapter that create or govern a common interest community or its association as determined by the assistant registrar. Examples of the term include: a declaration of a planned community, as defined under chapter 421J; the declaration establishing a condominium, by whatever name denominated; the bylaws of an association of owners of a condominium; a condominium map; a declaration of merger of condominium phases; any instrument effecting a merger of condominium phases; an assignment of developer's or declarant's rights; and any amendment or supplement to or restatement of any of the foregoing instruments. "Master certificate of title" means a certificate of title that: (1) Lists the governing documents of a common interest community; (2) In the case of a condominium, describes the registered land of the condominium and all easements, rights, and interests appurtenant to the registered land of the project as established or evidenced by instruments registered in the office of the assistant registrar; and (3) Lists the documents and instruments of general application to the registered land of the common interest community as determined by the assistant registrar; provided that a master certificate of title need not list documents and instruments noted in another master certificate of title, such as a master declaration of covenants, conditions, and restrictions governing multiple planned communities. "Unit" means: (1) In the case of a condominium, a condominium unit in the condominium; and (2) In the case of a planned community, a unit as that term is defined in chapter 421J." SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________ |
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