USA – HAWAII Law and Practice Contributed by: Jon Pang, Lisa Broulik and Matthew Cohen, Case Lombardi, A Law Corporation
tions of land being owned by large trusts or estates established through the former Hawaiʻian monarchy or companies with ties to Hawaiʻi’s plantation era. 2.2 Laws Applicable to Transfer of Title The Hawaiʻi laws generally applicable to the transfer of title to real property include the following: • the conveyance of real property registered in the Land Court (Torrens) system (HRS Chapter 501) (see 2.3 Effecting Lawful and Proper Transfer of Title ); • the recordation of deeds in the Regular (Abstract) system (HRS Chapter 502) (see 2.3 Effecting Law - ful and Proper Transfer of Title ); • the presumption of a tenancy in common unless a joint tenancy with the right of survivorship or a tenancy by the entirety is expressly created in the instrument of conveyance (HRS Section 509-1); and • the payment of conveyance taxes (see 2.10 Taxes Applicable to a Transaction ) upon recordation (HRS Chapter 247). While the application of these laws may differ based on the type of ownership interest (such as fee simple, leasehold, easements, etc), such application generally does not differ based on specific uses of real property (eg, residential, industrial, office, retail or hotel). 2.3 Effecting Lawful and Proper Transfer of Title Transfer Instruments Transfers of fee simple title to real property in Hawaiʻi generally occur upon the execution and delivery of a written instrument, typically a deed, establishing the grantor’s present intent to convey. The form of deeds differs according to the warranties given (such as general warranty deeds, limited warranty deeds, and quitclaim deeds) and the real property interest con - veyed. For example, an apartment deed may contain provisions relating to the condominium unit conveyed and its condominium project, and a deed conveying a lot located within a master planned development may contain reciprocal easements, reserved rights to facili - tate the completion of such development and restric - tions, and other provisions to preserve and further
the characteristics and standards of such planned development. Effectiveness Hawaiʻi has historically maintained two parallel sys - tems for real property registration: the “Regular” or “Abstract” system and the “Land Court” system, with the latter being a traditional “Torrens” system using state-backed certificates of title to evidence land own - ership. For properties registered in the “Land Court” system, conveyance instruments do not bind the registered land until such instruments are “registered” by recor - dation in the Office of the Assistant Registrar of the Land Court. However, such instruments are effective as a contract between the parties thereto upon their execution and delivery. The Land Court system is a “pure race” system, with the first to record having priority over unrecorded or subsequently recorded interests, notwithstanding having prior notice of such interests absent fraud. For “Regular System” properties, conveyance instru - ments are recorded to provide constructive notice thereof. Under this “race-notice” system, a good faith purchaser for value without actual notice of a prior unrecorded conveyance of the same interest has pri - ority over such unrecorded interest. Title insurance is common for all real estate in Hawaiʻi (residential and commercial) for properties in both sys - tems. 2.4 Real Estate Due Diligence Due diligence involves the investigation of a title review of the subject property coupled with an inves - tigation of the property’s existing physical condition, prior and existing uses, zoning, building code and other regulatory authorisations, permits, approvals, limitations and compliance, its environmental con - dition or hazardous substances contamination, and the presence of ancient Hawaiʻian burials and cultural and archaeological artifacts and features. A buyer may gather such information through commissioning stud - ies, tests, research of applicable laws and document review.
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