(a) Prior to the registration of the project by the developer with the commission, the issuance of an effective date for the developer’s public report by the commission, and the delivery of the developer’s public report to prospective purchasers, and subject to the limitations set forth in subsection (b), the developer may solicit prospective purchasers and enter into nonbinding preregistration agreements with the prospective purchasers with respect to units in the project. As used in this section, “solicit” means to advertise, to induce, or to attempt in whatever manner to encourage a person to acquire a unit.
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Terms Used In Hawaii Revised Statutes 514B-85

  • Commission: means the real estate commission of the State. See Hawaii Revised Statutes 514B-3
  • Contract: A legal written agreement that becomes binding when signed.
  • 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
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Person: means an individual, firm, corporation, partnership, association, trust, or other legal entity, or any combination thereof. See Hawaii Revised Statutes 514B-3
  • Project: means a real estate condominium project; a plan or project whereby a condominium of two or more units located within the condominium property regime are created. See Hawaii Revised Statutes 514B-3
  • 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) The solicitation activities authorized under subsection (a) shall be subject to the following limitations:

(1) Prior to registration of the project with the commission and the issuance of an effective date for the developer’s public report, the developer shall not collect any moneys from prospective purchasers or anyone on behalf of prospective purchasers, whether or not the moneys are to be placed in an escrow account, or whether or not the moneys would be refundable at the request of the prospective purchaser; and
(2) The developer shall not require or request that a prospective purchaser execute any document other than a nonbinding preregistration agreement. The preregistration agreement may, but need not, specify the unit number of a unit in the project to be reserved and may, but need not, include a price for the unit. The preregistration agreement shall not incorporate the terms and provisions of the sales contract for the unit and, by its terms, shall not become a sales contract. Notwithstanding anything contained in the preregistration agreement to the contrary, the preregistration agreement may be canceled at any time by either the developer or the prospective purchaser by written notice to the other. The commission may prepare a form of preregistration agreement for use pursuant to this section, and use of the commission-prepared form shall be deemed to satisfy the requirements of the preregistration agreement as provided in this section.
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