HAR Chapters 119.1 through 119.8 – Condominiums (effective 3/26/26)

CHAPTER 119.5

CONDOMINIUMS - SALES TO OWNER-OCCUPANT

§16-119.5-1 Exclusions §16-119.5-2 Sales exempt from owner-occupant requirements §16-119.5-3 Fifty per cent of units §16-119.5-4 Offers of sale of residential units §16-119.5-5 Publication of announcement §16-119.5-6 Extenuating circumstances affecting an owner-occupant's compliance §16-119.5-7 Sample copies of forms §16-119.5-8 Failure to comply §16-119.5-9 Owner-occupant affidavit

§16-119.5-1 Exclusions. The following are not included in the definition of "residential unit" in section 514B-95, HRS: (1) Time share units built in a county zoned or designated hotel or resort use; (2) Leasehold fee interests offered for sale or sold to the unit owners who occupied the unit immediately prior to the leasehold conversion or leasehold fee interests being offered to the association of unit owners; and

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(3) The sale of units in a project consisting of nonresidential units where one of the units is a residential unit. [Eff MAR 2 6 2025 (Auth: HRS §§514B-61, 514B-98.5) (Imp: HRS §514B-95)

§16-119.5-2 Sales exempt from owner-occupant requirements. Residential projects built in a county zoned or designated hotel or resort area shall be exempt from the provisions of part V(B), Sales to Owner-Occupants, of chapter 514B, HRS, except residential projects situated in Waikiki shall not be exempt from the provisions of part V(B), Sales to Owner-Occupants, of chapter 514B, HRS. [Eff MAR 26 2026 ] (Auth: HRS §§514B-6, 514B-61, 514B-98.5) (Imp: HRS §514B-95)

§16-119.5-3 Fifty per cent of units. Two units in a three-unit residential condominium project shall be designated as the units for sale to prospective owner-occupants. [Eff MAR 2 6 2026 ] (Auth: HRS §§514B-61, 514B-98.5) (Imp: HRS §514B-96)

§16-119.5-4 Offers of sale of residential units. (a) At any time after issuance of an effective date for a developer's public report and after designating at least fifty per cent of the units for sale to prospective owner-occupants, the developer may offer for sale the non-designated owner-occupant units prior to or concurrently with offering to sell to prospective owner-occupants. (b) A developer that uses either a chronological system or a lottery system may use, where applicable, the methods permitted by chapter 489E, HRS, Uniform Electronic Transactions Act, that are consistent with chapter 514B, HRS, and chapters 16-119.1 through

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16-119.8 and as required by the commission. (c) In computing any required time for offering the residential units to prospective owner-occupants, the first day of the publication is excluded and the last day is included unless the last day is a Sunday or holiday in which case the last day shall be the next day which is not a Sunday or holiday. [Eff MAR 26 2026 ] (Auth: HRS §§514B-61,514B-98.5) (Imp: HRS §§514B-95, 514B-95.5, 514B-96.5, 514B-98)

§16-119.5-5 Publication of announcement. "General circulation" as used in section 514B-95.5, HRS, includes a newspaper that is published daily and distributed to all segments of the population and that reports national and statewide news and information of a general nature and interest. A newspaper published in the county includes a newspaper that is published at least weekly and distributed to all segments of the population and that reports national and statewide news and information of a general nature and interest. [Eff MAR 2 6 2026 (Auth: HRS §514B-61) (Imp: HRS §514B-95.5)

16-119.5-6 Extenuating circumstances affecting an owner-occupant's compliance. (a) Any person who executes an owner-occupant affidavit pursuant to part V(B) of chapter 514B, HRS, may request that the commission: (1) Issue an informal non-binding interpretation that an extenuating circumstance exists as specified in section 514B-98.5, HRS; and (2) Issue a "no action" letter for any violation of this subpart based on the existence of an extenuating circumstance described in the request with the commission reserving its right to initiate future action should new information substantiate possible violation.

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(b) The request shall be made on a form approved by the commission. A copy of an executed owner- occupant affidavit shall be attached to the request. (c) The commission may consider the following in determining the existence of an extenuating circumstance as provided in section 514B-98.5, HRS: (1) For a serious illness, a certified statement by the treating United States-licensed physician of the affiant or the person who was to have occupied the unit that the illness: (A) Arose after the date of the execution of the owner affidavit; (B) Was not previously known; (C) Is serious; (D) Is likely to exist for at least the remainder of the required owner- occupant period; and (E) Is of such a nature and scope the specifics of which prevent such person from occupying the unit. (2) For an unforeseeable job or military transfer, a certification by the owner- occupant affiant of the following: (A) Date of first knowledge of transfer; (B) Date of transfer; (C) Address of new job location; and (D) Duration of transfer. An employer executed document supporting the certification shall be attached to the commission approved request form. (3) For an unforeseeable change in marital status or change in parental status, a certification by the owner-occupant affiant of the following: (A) Date of marriage or date of separation or divorce (if applicable); (B) Date of birth of the newborn child (if applicable); (C) Date of change in legal custody of child or children and address on the date of taking custody or date custody

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of child or children taken (if applicable); (D) Date that the owner-occupant affiant and family moved into the owner- occupant unit (if applicable); and (E) An explanation detailing specific reasons why the change in marital or parental status prevents the affiant from complying with the terms of the owner-occupant affidavit. Third party, government, or court documents supporting the certification shall be attached to the commission approved request form. (4) For any other unforeseeable change, a certification by the owner-occupant affiant of the following: (A) Chronological statement of the unforeseeable occurrence; (B) Specific reasons supporting how the unforeseeable occurrence affects compliance with the executed owner- occupant affidavit; and (C) Date of first knowledge of the unforeseeable occurrence. Supporting documents substantiating the date of first knowledge of the unforeseeable change by the owner-occupant shall be attached to the commission approved request form. The commission may require the owner- occupant to submit to the commission other additional information and documents in support of the extenuating circumstance request. ( d) Commission staff shall issue a "no action" letter on behalf of the commission where the existence of any of the extenuating circumstances of section 514B-98.5(b), HRS, is supported and is prima facie evidenced by the individual's request. All other requests for a "no action" letter shall be determined by the commission. [Eff MAR 2 6 2026 (Auth: HRS

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§§436B-B(b), 514B-61, 514B-98.5) (Imp: HRS §514B-98.5)

§16-119.5-7 Sam.p1e copies of forms. Upon request by the commission, the developer shall provide a sample copy of the following forms: (1) Affidavit of intent to become an owner-occupant of a residential unit; and (2) Reservation agreement between the developer and an owner-occupant of a residential unit. [Eff MAR 2 6 2026 l (Auth: HRS §514B-61) (Imp: HRS §514B-98)

§16-119.5-8 Failure to comply. (a) Should a developer fail to comply with the requirements of section 514B-95.5, HRS, or this section, the developer shall immediately cease any sales offering, unless otherwise approved by the commission, and: (1) Refund all monetary deposits to persons on the reservation list; (2) Cancel all executed affidavits; (3) Cancel all executed sales contracts; and (4) Republish the owner-occupant announcement in accordance with section 514B-95.5, HRS. (b) Subsection (a) applies to a developer exempt from but who elects to comply with and fails to comply with the Rrovisions of part V(B) of chapter 514B, HRS. [Eff MAR 26 2026 ] (Auth: HRS §514B-61) (Imp: HRS §514B-95.5)

§16-119.5-9 Owner-occupant affidavit. For purposes of part V(B) of chapter 514B, HRS, a non- owner-occupant may share title with an owner-occupant subject to the following conditions:

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(1) The developer has received written confirmation that the owner-occupant's mortgage lender requires it; and (2) During the first three hundred sixty-five days of ownership, should the non-owner- occupant decide to convey or transfer their interest, the transfer or conveyance shall only be made to the owner-occupant on title. [Eff MAR 26 2026 ] (Auth: HRS §514B-61) (Imp: HRS §514B-97)

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HAWAII ADMINISTRATIVE RULES

TITLE 16

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS