HAR §15-307-53. Required conditions of agreements

If the corporation determines that the proposed project is primarily designed for lower income housing, and the corporation desires to enter into an agreement with the eligible developer, the agreement with the eligible developer for the development of housing projects shall include the following conditions: (1) That the eligible developer may furnish a performance or material house bond, issued by sureties that shall be satisfactory to the corporation, in favor of the corporation, to assure the timely and complete performance of the housing project; 307-31 (2) That the plans and specifications of the housing project provide for the rental of units to eligible tenants or the sale of units in fee simple or in leasehold either to the corporation or to the purchaser. In the case of for-sale projects, the sale of the units shall be subject to all of the provisions in sections 201H-47, 201H-49, and 201H-50, HRS, including the shared appreciation equity program, except for units which are to be sold at market prices; and (3) That the housing project encompasses the use of lands adequately suited to size, design, and types of occupancies designated for projects primarily designed for lower income housing, properly located for occupancy by the groups for which the development is designed, or appropriate in its situation and surroundings for more intensive or denser zoning. [Eff 12/04/10; comp 4/28/17; comp 1/15/22; comp ] (Auth: HRS §§201H-4, 201H-33) (Imp: HRS §201H-41) §15-307-54 Conditions imposed at discretion of corporation. The corporation may include such conditions as it may deem to be appropriate, to assure that the project will be developed and the units sold or rented primarily as lower income housing. By agreement, the corporation may provide that all or a portion of the housing to be placed under the control of the corporation, is to be rented or sold by the corporation or to be sold to the corporation upon completion of all or a portion of the units. [Eff 12/04/10; comp 4/28/17; comp 1/15/22; comp ] (Auth: HRS §§201H-4, 201H-33) (Imp: HRS §201H-41) §15-307-55 Processing of proposal; agreement with eligible developer. Processing of proposals and agreements with eligible developers shall be in accordance with sections 15-307-27 and 15-307-28. 307-32 [Eff 12/04/10; comp 4/28/17; comp 1/15/22; comp ] (Auth: HRS §§201H-4, 201H-33) (Imp: HRS §201H-42) §15-307-56 Alternative exemption pathway under section 201H-38(a)(2), HRS. (a) A proposed housing project may qualify for exemptions from applicable statutes, charter provisions, ordinances, and rules pursuant to section 201H-38(a)(2), HRS, if the project additionally satisfies the requirements of this section; provided that projects qualifying under this section remain subject to all other applicable provisions of this chapter unless expressly exempted. (b) The project shall: (1) Set aside one hundred per cent of the dwelling units exclusively for qualified residents as defined by 201H-32, HRS. (2) Not be required to provide units that are subject to affordability restrictions because of being processed under this section. (c) The project shall be subject to a recorded declaration of land use restrictive covenants against the fee simple interest in the land, which shall not be subordinated to any other interest, including but not limited to any lender’s mortgage interest, and shall guarantee compliance with subsection (b) for the lifetime of the project. (d) The lifetime of the project shall extend until its demolition, except that if the project is demolished and rebuilt in-kind due to casualty, its lifetime shall continue uninterrupted, and the exemptions granted pursuant to section 201H-38, HRS, and restrictions imposed by this section shall remain in effect. (e) Upon the end of the lifetime of the project, including through demolition that is not followed by in-kind reconstruction pursuant to subsection (d), and upon actual demolition of the project, the project owner may request a release of the declaration of land use restrictive covenants. Upon approval of the request and recording of the release, the project shall no longer be subject to this section and shall 307-33 no longer be entitled to the exemptions granted pursuant to section 201H-38, HRS. (f) The corporation may establish compliance monitoring procedures which the project must comply with and may charge a fee for such monitoring. The corporation may perform an audit at least once per year and shall have access to all books and records upon notice to the project owner. (g) If the corporation determines that the project is in noncompliance with this section, the corporation may pursue any and all remedies including, but not limited to: specific performance, foreclosure, other legal action, or termination of the exemptions granted pursuant to section 201H-38, HRS. (h) The corporation shall notify the project owner of any noncompliance and provide sixty calendar days to cure the violation. The corporation may extend the cure period for good cause, provided that the total cure period, including any extension, shall not exceed six months. (i) Noncompliance with section 15-307-56 or section 15-307-57, or with section 201H-38(a)(2), HRS, shall incur a penalty fee due and payable to the corporation of: (1) in the case of a unit rented or occupied in violation, up to $10,000 per dwelling unit per month, assessed against the owner(s) of the non- complying dwelling unit(s); and (2) in the case of a unit resold in violation, the greater of $10,000 or 50% of the net appreciation realized by the seller, assessed against the seller. Interest on unpaid penalty fees at a 5% annual rate, compounded monthly, shall be added to the amount due as an additional penalty fee. The corporation may waive or reduce penalty fees in its sole discretion. [Eff __ ] (Auth: HRS §§201H-4, 201H-38) (Imp: HRS §201H-38) §15-307-57 Additional requirements for for-sale projects under section 201H-38(a)(2), HRS. (a) For- sale projects qualifying under section 15-307-56 shall be subject to the requirements set forth in this section, in addition to any other requirements 307-34 established by the corporation. These provisions shall apply to the extent determined appropriate by the corporation to ensure compliance with section 201H- 38(a)(2), HRS. (b) Units shall be sold subject to deed restrictions guaranteeing occupancy by qualified residents for the lifetime of the project. (c) The corporation shall have the right to foreclose on dwelling units whose owners are in violation of the applicable deed restrictions or other requirements of this section. (d) The corporation or the corporation’s designee shall determine eligibility to purchase dwelling units and may apply relevant provisions of chapter 15-308 for the lifetime of the project, including but not limited to: (1) Subchapter 2, relating to eligibility and preferences to purchase dwelling units, except that income restrictions shall not apply; (2) Subchapter 5, relating to repurchase of dwelling units when an owner seeks to transfer title; (3) Subchapter 7, relating to owner-occupancy waivers; and (4) Subchapter 8, relating to preferences for qualified residents in the initial sale of dwelling units, which shall apply to all units in the initial sale without time limitation. (e) For the lifetime of the project, the corporation shall have the right to repurchase dwelling units when an owner seeks to transfer title, regardless of whether the transfer is a sale or another form of conveyance. [Eff __ ] (Auth: HRS §§201H-4, 201H-38) (Imp: HRS §201H-38) SUBCHAPTER 4 -- REPEALED [