§441-12  Mortgages and liens; consumer
contracts; sales prohibited.  (a)  Cemetery authorities may secure
pecuniary obligations by mortgage or lien upon their property, whether or not
the property has been set aside for interment purposes, and may sell plots,
crypts, niches, or contracts containing pre-need interment services subject to
such mortgage or lien within the limitations and conditions imposed by this
chapter.



(b)  All mortgages and other liens of any
nature hereafter contracted for and recorded on the property which has been and
was, at the time of the perfection of the lien, dedicated to cemetery purposes
pursuant to this chapter, shall not affect or impair the dedication of the
property to cemetery use, or the title of any plot, crypt, or niche contract,
or the obligation of the cemetery authority to fully perform any contract
containing pre-need interment services, but the mortgage or other lien shall be
subject and subordinate to the dedication and title of any plot, crypt, or
niche contract and the obligation of the cemetery authority to fully perform
any contract containing pre-need interment services, and any and all sales made
upon foreclosure, insolvency, or federal bankruptcy proceeding shall be subject
and subordinate to the dedication and title of any plot, crypt, or niche
contract and  the obligation of the cemetery authority to fully perform any
contract containing pre-need interment services.



(c)  A statutory lien is created, without
recordation of the lien, upon all real and personal property held by a pre-need
funeral authority upon the filing with the department of audited financial
statements, audited by an independent certified public accountant, that
indicate that its pre-need funeral trusts are not fully funded as required by applicable
law.  The amount of the lien shall be equal to the amount that the pre-need
funeral trusts are underfunded.  This lien shall have priority over all
subsequent real property mortgages, security interests, and liens created upon
the real and personal property of the pre-need funeral authority and shall
terminate at the time when the pre-need funeral trusts are properly funded, as
evidenced by records and certification of the trustee and subsequent assurance
from the independent certified public accountant that the underfunding was
corrected.



(d)  Notwithstanding any other language to the
contrary, sales by a cemetery or pre-need funeral authority of accounts
receivables from contracts containing pre-need interment, pre-need funeral, or
perpetual care services shall be prohibited.  Sales made in violation of this
subsection shall be void.



(e)  Any transfer of pre-need funeral trust
funds and the obligations related thereto shall be to another person subject to
section 441-20 or 441-30.5.  Any transfer of pre-need funeral trust funds and
pre-need funeral contracts and obligations related thereto in accordance with
this section shall include the transfer of pre-need funeral contracts made,
entered into, or purchased by the pre-need funeral authority prior to the
transfer. [L 1967, c 199, pt of §1; HRS §441-12; am L 2007, c 188, §3]