A purchaser‘s funds, negotiable instruments, and purchase money contracts may be released from escrow without a closing as follows:

(1) If a purchaser or developer gives a valid notice of cancellation of the contract pursuant to § 514E-8, all of the purchaser’s funds and any negotiable instruments and purchase money contracts made by the purchaser shall be returned to the purchaser within fifteen days after the notice of cancellation is received.
contract signature

Need help reviewing a real estate contract?
Have it reviewed by a lawyer, get answers to your questions and move forward with confidence.
Connect with a lawyer now

Terms Used In Hawaii Revised Statutes 514E-17

  • Contract: A legal written agreement that becomes binding when signed.
  • Developer: means any person that creates a time sharing plan or is in the business of selling time share units. See Hawaii Revised Statutes 514E-1
  • Director: means the director of commerce and consumer affairs. See Hawaii Revised Statutes 514E-1
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Project: means :

    (1) An individual condominium project;

    (2) Two or more contiguous condominium projects that have been merged and for administrative purposes operate as a single condominium project;

    (3) An individual cooperative housing project;

    (4) An individual subdivision of single-family homes subject to one or more project instruments; or

    (5) An individual subdivision of townhomes subject to one or more project instruments. See Hawaii Revised Statutes 514E-1

  • Purchaser: means any person who has contracted to acquire a time share interest. See Hawaii Revised Statutes 514E-1
  • Time share plan: means any plan or program in which the use, occupancy, or possession of one or more time share units circulates among various persons for less than a sixty-day period in any year, for any occupant. See Hawaii Revised Statutes 514E-1
(2) If a purchaser or developer properly terminates a contract pursuant to its terms, or if a developer or prospective purchaser terminates a reservation agreement, all of the purchaser’s funds and any negotiable instruments and purchase money contracts made by the purchaser or prospective purchaser shall be delivered in accordance with the contract or reservation agreement.
(3) If the purchaser defaults in the performance of the purchaser’s obligations under the contract, all of the purchaser’s funds and any negotiable instruments or purchase money contracts made by the purchaser under the contract shall be delivered in accordance with the contract.
(4) If purchaser’s funds are to be used for construction the funds may be disbursed by the escrow agent from time to time to pay for:

(A) Construction costs of the buildings and improvements in proportion to the valuation of the work completed by the contractor in accordance with the contract documents, as certified by a registered architect or engineer and approved for payment by the construction lender;
(B) Architectural, engineering, and interior design service fees in proportion to the services performed within each phase of services, as approved by the construction lender;
(C) The costs of purchasing furnishings and fixtures for the time share units, as approved by the construction lender; and
(D) Finance and legal fees, and other incidental expenses of constructing the time share units or developing the time share plan as approved by the construction lender;

provided that no such disbursements shall be made unless the developer first deposits with the director (i) a copy of the executed construction contract, (ii) a copy of executed performance and labor and material payment bonds in an amount which is not less than one hundred per cent of the cost of construction and covering any changes to the contract which do not in the aggregate increase the amount of the construction contract by more than ten per cent, (iii) a verified statement showing all costs involved in completing the project, and (iv) satisfactory evidence acceptable to the director of funds sufficient to cover the total costs of constructing, furnishing, and completing the project from purchaser’s funds, equity funds, interim or permanent loan commitments or other sources.

  Previous
Next  
 Chapter 514E Contents