(a) A developer right created or reserved under this chapter may be transferred only by a recorded instrument evidencing the transfer. The instrument is not effective unless executed by the transferee.
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Terms Used In Hawaii Revised Statutes 514B-136

  • Affiliate of a developer: means a person that directly or indirectly controls, is controlled by, or is under common control with, the developer. See Hawaii Revised Statutes 514B-3
  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • Condominium: means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions. See Hawaii Revised Statutes 514B-3
  • Declaration: means any instrument, however denominated, that creates a condominium, including any amendments to the instrument. See Hawaii Revised Statutes 514B-3
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Developer: means a person who undertakes to develop a real estate condominium project, including a person who succeeds to the interest of the developer by acquiring a controlling interest in the developer or in the project. See Hawaii Revised Statutes 514B-3
  • Development rights: means any right or combination of rights reserved by a developer in the declaration to:

    (1) Add real estate to a condominium;

    (2) Create units, common elements, or limited common elements within a condominium;

    (3) Subdivide units, combine units, or convert units into common elements;

    (4) Withdraw real estate from a condominium;

    (5) Merge projects or increments of a project; or

    (6) Otherwise alter the condominium. See Hawaii Revised Statutes 514B-3

  • Fiduciary: A trustee, executor, or administrator.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, firm, corporation, partnership, association, trust, or other legal entity, or any combination thereof. See Hawaii Revised Statutes 514B-3
  • Property: includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water. See Hawaii Revised Statutes 514B-3
  • recording: means to record in the bureau of conveyances in accordance with chapter 502, or to register in the land court in accordance with chapter 501. See Hawaii Revised Statutes 514B-3
  • Trustee: A person or institution holding and administering property in trust.
  • Unit: means a physical or spatial portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described in the declaration or pursuant to § 514B-35, with an exit to a public road or to a common element leading to a public road. See Hawaii Revised Statutes 514B-3
(b) Upon transfer of any developer right, the liability of a transferor developer is as follows:

(1) A transferor is not relieved of any obligation or liability arising before the transfer, and remains liable for warranty obligations imposed upon the transferor by this chapter, if any. Lack of privity does not deprive any unit owner of standing to maintain an action to enforce any obligation of the transferor;
(2) If a successor to any developer right is an affiliate of a developer, the transferor is jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the condominium;
(3) If a transferor retains any developer rights, but transfers other developer rights to a successor who is not an affiliate of the developer, the transferor is liable for any obligations or liabilities imposed on a developer by this chapter or by the declaration relating to the retained developer rights and arising after the transfer; and
(4) A transferor has no liability for any act or omission or any breach of a contractual or warranty obligation arising from the exercise of a developer right by a successor developer who is not an affiliate of the transferor.
(c) Unless otherwise provided in a mortgage instrument or other agreement creating a security interest, in case of foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale, or sale under bankruptcy code or receivership proceedings, of any units owned by a developer or real estate in a condominium subject to development rights, a person acquiring title to all the property being foreclosed or sold, but only upon request, succeeds to all developer rights related to that property held by that developer. The judgment or instrument conveying title must provide for the transfer of only the developer rights requested.
(d) Upon foreclosure of a security interest, sale by a trustee under an agreement creating a security interest, tax sale, judicial sale, or sale under bankruptcy code or receivership proceedings, of all interests in a condominium owned by a developer:

(1) The developer ceases to have any developer rights; and
(2) The period of developer control under section 514B-106(d) terminates unless the judgment or instrument conveying title provides for transfer of all developer rights held by that developer to a successor developer.
(e) The liabilities and obligations of a person who succeeds to developer rights are as follows:

(1) A successor to any developer right who is an affiliate of a developer is subject to all obligations and liabilities imposed on the transferor by this chapter or by the declaration;
(2) A successor to any developer right, other than a successor described in paragraph (3) or (4) or a successor who is an affiliate of a developer, is subject to the obligations and liabilities imposed by this chapter or the declaration:

(A) On a developer which relate to the successor’s exercise or nonexercise of developer rights; or
(B) On the transferor, other than:

(i) Misrepresentations by any previous developer;
(ii) Warranty obligations on improvements made by any previous developer, or made before the condominium was created;
(iii) Breach of any fiduciary obligation by any previous developer or the developer’s appointees to the board; or
(iv) Any liability or obligation imposed on the transferor as a result of the transferor’s acts or omissions after the transfer;
(3) A successor to only a right reserved in the declaration to maintain models, sales offices, and signs, and who may not exercise any other developer right, is not subject to any liability or obligation as a developer, except the obligation to provide a public report, any liability arising as a result thereof, and the obligations under part IV; and
(4) A successor to all developer rights held by a transferor who succeeded to those rights pursuant to a deed or other instrument of conveyance in lieu of foreclosure or a judgment or instrument conveying title under subsection (c), may declare in a recorded instrument the intention to hold those rights solely for transfer to another person. Thereafter, until transferring all developer rights to any person acquiring title to any unit or real estate subject to development rights owned by the successor, or until recording an instrument permitting exercise of all those rights, that successor may not exercise any of those rights other than any right held by the transferor to control the board in accordance with section 514B-106(d) for the duration of any period of developer control, and any attempted exercise of those rights is void. So long as a successor developer may not exercise developer rights under this subsection, the successor developer is not subject to any liability or obligation as a developer other than liability for the developer’s acts and omissions under section 514B-106(d).
(f) Nothing in this section subjects any successor to a developer right to any claims against or other obligations of a transferor developer, other than claims and obligations arising under this chapter or the declaration.

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