2023 Hawaii Revised Statutes › Title 12. Conservation and Resources › 171. Public Lands, Management and Disposition of › 171-73 Term, rent, and other conditions of residential leases.

§171-73 Term, rent, and other conditions of residential leases.
Residential leases made by the board of land and natural resources may be for an initial term of fifty-five years with the privilege of extension to meet Federal Housing Administration requirements, provided the aggregate of the initial terms and extension shall in no event exceed seventy-five years. It may contain such terms and conditions as the board may in its discretion determine, except that the following shall in any event be complied with in each residential lease:
(1) Rent and taxes. The annual rent shall be not less than an amount representing a fair return on the value of the premises at the inception of the rental period under the lease, which value shall be determined by appraisers. The lessee shall pay all real property taxes, assessments for the lessee's pro rata share of the costs of the improvements of the tract in which the land is located, and such other charges made against or levied upon the lessee's premises. "Value of premises" as used in this section means the fair market value of the raw land, including in such value the pro rata share of the cost of improvements only if the lessee has not already been assessed or has not already paid the lessee's pro rata share thereof or if the State has not assumed the costs.
(2) Construction of residence. Each residential lease shall contain requirements that the lessee construct a residence upon the premises, pursuant to plans and specifications approved by the board and using a licensed contractor, within such time and having such minimum value or ground floor area as may be determined by the board in its discretion.
(3) Use. Upon the completion of improvements upon the premises, the lessee shall use and occupy the premises as the lessee's residence and shall not rent or use for any business purposes the whole or any part of the premises, except with the written consent of the board.
(4) Alienation. Each residential lease shall contain conditions prohibiting the lessee from subletting or parting with the possession of the whole or any part of the premises and from selling, assigning, transferring, or otherwise disposing of or encumbering, except by way of mortgage as hereinafter permitted, any interest in the lease or any improvements erected on the premises, except with the written consent of the board.
(5) Right of purchase. Each residential lease shall also state that no right or privilege of purchasing the fee title to the land demised shall be created by the lease, except as provided in section 171-79, notwithstanding any other provision of the law to the contrary.
(6) Construction and mortgages. Each residential lease shall provide that the lessee may mortgage the lease and improvements only for the purpose of financing the construction of a residence upon the premises or, after the requirement of construction of a residence upon the premises has been fulfilled, for the purpose of financing the purchase of the lease and improvements. The mortgages shall be made only to recognized lending institutions and may provide for foreclosure and for sale at the foreclosure to any purchaser, without regard to whether the purchaser at the sale is qualified or disqualified to take a residential lease under this part. The mortgagee's interest in any such mortgage shall be freely assignable.
(7) Mortgage qualification. The foregoing provisions to the contrary notwithstanding, the board is authorized from time to time, upon the issuance of any such lease to adopt or modify or eliminate any provision contained in sections 171-70 to 171-83, to the extent necessary to qualify the lease for mortgage lending or guaranty purposes with the Federal Housing Administration, Federal National Mortgage Association, and Department of Veterans Affairs, and their respective successors and assigns. [L 1962, c 32, pt of §2; Supp, §103A-69; HRS §171-73; gen ch 1985; am L 2017, c 12, §1]