(a) The lien payment deposit shall consist of either:

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-25

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means the time share owners association. See Hawaii Revised Statutes 514E-1
  • Blanket lien: means any mortgage, deed of trust, option to purchase, master lease, vendor's lien or interest under a contract or agreement of sale, or any other lien or encumbrance that (i) affects more than one time share interest either directly or by reason of affecting an entire time share unit or the property upon which the time share unit to be used by the purchasers is located, and (ii) secures or evidences the obligation to pay money or to sell or convey the property and that authorizes, permits, or requires the foreclosure and sale or other defeasance of the property affected; provided that for the purpose of this chapter, the following shall not be considered blanket liens:

    (1) The lien of current real property taxes;

    (2) Taxes and assessments levied by public authority and that are not yet due and payable;

    (3) A lien for common expenses under chapter 514B or a lien on an individual time share unit for similar expenses in favor of a homeowners or community association;

    (4) An apartment lease or condominium conveyance document conveying or demising a single condominium unit or a lease of a single cooperative apartment; and

    (5) Any lien for costs or trustee's fees charged by a trustee holding title to time share units pursuant to a trust created under § 514E-19; provided that the costs or trustee's fees are not yet due and payable. See Hawaii Revised Statutes 514E-1

  • 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
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • 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

  • 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
  • Time share unit: means the actual and promised accommodations, and related facilities, which are the subject of a time share plan. See Hawaii Revised Statutes 514E-1
  • Trustee: A person or institution holding and administering property in trust.
(1) Nondelinquent purchase money contracts from purchasers of time share interests in the time share plan; or
(2) Other assets deposited into trust by the developer and approved by the director.
(b)

(1) The purchase money contracts shall have an aggregate remaining principal balance of not less than, and any other assets deposited shall have a liquidated value of not less than, one hundred ten per cent of the difference between:

(A) The aggregate remaining principal balance owing under blanket liens against the time share unit or time share interests in it, including any prepayment penalties, release prices, and similar charges; and
(B) The amount of money, or its equivalent, in the trust and available at any time to be applied to the reduction of the principal balance of the blanket lien.

The developer shall have the burden of establishing, to the satisfaction of the director, the liquidated value of assets other than purchase money contracts from purchasers in the time share plan.

(2) If the blanket lien payment deposit consists of purchase money contracts, the payments required to be made by purchasers under the contracts shall:

(A) Be due on or before the dates on which payments become due on the blanket liens;
(B) If paid when due, be equal to at least one hundred ten per cent of the amount required to be paid on the blanket liens on that date; and
(C) Be sufficient to pay, in full, during the term of those contracts:

(i) All amounts secured by the blanket liens, including prepayment penalties and release prices, if any; and
(ii) All service charges payable to the trustee, any collection agent, and any other servicing agent pursuant to the trust instrument.
(3) If the developer proposes to deposit into trust assets other than purchase money contracts, those assets shall be sufficient to pay debt service installments on the blanket lien as they become due and to create a sinking fund or other arrangement adequate to extinguish the debt secured by the blanket lien at its maturity.
(c)

(1) In lieu of the requirements of subsection (b), the developer may elect to follow the requirements of paragraphs (2), (3), (4), and (5) if the following requirements are met:

(A) The developer owns or leases under a lease for a term of not less than thirty years all the noncommercial portions of a hotel, condominium, cooperative, or other project;
(B) No more than seventy-five per cent of the appraised value of the project is subject to a mortgage or other lien. The appraised value shall be based on the use of the project prior to the creation of the time share plan;
(C) As security for the obligations of the developer to the owners:

(i) The developer executes and records a mortgage in favor of the trustee under the lien payment trust or the association, in either case as trustee on behalf of the owners, twenty-five per cent of the appraised value of the project; or
(ii) The developer conveys or transfers the project to a trust meeting the requirements of §§ 514E-22 and 514E-23, and under the terms of the trust instrument the twenty-five per cent of the beneficial interest in the trust is held for the benefit of, or conveyed or transferred to, the association, acting as trustee for the owners; and
(D) The developer files a verified statement of the program of financing, acceptable to the director, containing a cash flow analysis showing that the developer has adequate funds to pay the debt service installments on the blanket liens on the project during the sales period and to extinguish the debt secured by the blanket lien at its maturity, whether from sales proceeds, loan commitments, income from operations of the project, or other sources.
(2) The purchase money contracts shall have an aggregate remaining principal balance of not less than, and any other assets deposited shall have a liquidated value of not less than, one hundred ten per cent of the difference between:

(A) A pro rata share of the aggregate remaining principal balance owing under blanket liens against the time share unit or time share interests in it, including any prepayment penalties, release prices, and similar charges; and
(B) A pro rata share of the amount of money, or its equivalent, in the trust and available at any time to be applied to the reduction of the principal balance of the blanket lien.

The developer shall have the burden of establishing, to the satisfaction of the director, the liquidated value of assets other than purchase money contracts from purchasers in the time share plan.

(3) If the blanket lien payment deposit consists of purchase money contracts, the payments required to be made by purchasers under the contracts shall:

(A) Be due on or before the dates on which payments become due on the blanket liens;
(B) If paid when due, be equal to at least one hundred ten per cent of a pro rata share of the amount required to be paid on the blanket liens on that date; and
(C) Be sufficient to pay, in full, during the term of those contracts:

(i) A pro rata share of all amounts secured by the blanket liens, including prepayment penalties and release prices, if any; and
(ii) All service charges payable to the trustee, any collection agent, and any other servicing agent pursuant to the trust instrument.
(4) If the developer proposes to deposit into trust assets other than purchase money contracts, those assets shall be sufficient to pay a pro rata share of the debt service installments on the blanket lien as they become due and to create a sinking fund or other arrangement adequate to extinguish the debt secured by the blanket lien at its maturity.
(5) For purposes of this subsection, the term “pro rata share” means a share proportionate to the ratio that the number of time share units in which the sale of time share interests have been closed bears to the total number of time share units in the project. No more than fifty-one weeks of use annually may be attributed to each time share unit in determining the pro rata share.
(6) The developer may elect to terminate the use of the provisions of this subsection upon satisfying all of the requirements of either subsection (b) or section 514E-26(c).
(d) For purposes of this section, a purchase money contract is deemed delinquent when an installment payment is more than fifty-nine days past due.

  Previous
Next  
 Chapter 514E Contents