§514A-62  Copy of public report to be
given to prospective purchaser.  (a)  The developer (or any other person
offering any apartment in a condominium project prior to completion of its
construction) shall not enter into a contract or agreement for the sale or
resale of an apartment that is binding upon any prospective purchaser until:



(1)  The commission has issued an effective date for
either a contingent final public report or a final public report on the
project, and the developer has delivered, or caused to be delivered, to the
prospective purchaser, either personally or by registered or certified mail
with return receipt requested, a true copy of either the contingent final
public report or the final public report together with a true copy of all prior
public reports on the project, if any, that have not been previously delivered
to such prospective purchaser; except that such prior public reports need not
be delivered to the prospective purchaser if the contingent final public report
or the final public report supersedes such prior public reports.  If, prior to
the entering into of such contract or agreement for sale or resale, the
commission, subsequent to its issuance of an effective date for the contingent
final public report or the final public report, has issued an effective date
for a supplementary public report on the project, then a true copy of such
supplementary public report shall also be delivered to such prospective
purchaser in the same manner as the contingent final public report or the final
public report, except that if the supplementary public report supersedes all
prior public reports on the project, then only the supplementary public report
need be delivered to the prospective purchaser;



(2)  The prospective purchaser has been given an
opportunity to read the report or reports; and



(3)  The prospective purchaser (A) executes the form
of the receipt and notice set forth in subsection (d); and (B) waives the
prospective purchaser's right to cancel; provided that if the prospective
purchaser does not execute and return the receipt and notice within thirty days
from the date of delivery of such reports, or if the apartment is conveyed to
the prospective purchaser prior to the expiration of such thirty-day period,
the prospective purchaser shall be deemed to have receipted for the reports and
to have waived the prospective purchaser's right to cancel.



(b)  The receipts and notices taken hereunder
shall be kept on file in possession of the developer (or such other person as
may offer any apartment in a condominium project prior to completion of its
construction), and shall be subject to inspection at a reasonable time by the
commission or its deputies, for a period of three years from the date the
receipt and notice was taken.



(c)  Unless such right has previously been
waived pursuant to subsection (a), a prospective purchaser shall have the right
to cancel any agreement for the purchase or reservation of an apartment at any
time prior to the earlier of:



(1)  The conveyance of the apartment to the
prospective purchaser; or



(2)  Midnight of the thirtieth day following the date
of delivery of the first of either the contingent final public report or the
final public report to such purchaser,



and, upon any such cancellation, shall be entitled
to a prompt and full refund of all moneys paid, less any escrow cancellation
fee and other costs associated with the purchase, up to a maximum of $250.



(d)  Whenever a contingent final public report,
final public report, or supplementary public report is delivered to a
prospective purchaser pursuant to subsection (a), two copies of the receipt and
notice set out below shall also be delivered to such purchaser, one of which
may be used by the purchaser to cancel the transaction.  Such receipt and
notice shall be printed in capital and lower case letters of not less than
twelve-point type on one side of a separate statement.  The receipt and notice
shall be in the following form:



"RECEIPT
FOR PUBLIC REPORT(S) AND



NOTICE OF
RIGHT TO CANCEL



I acknowledge receipt of
the Developer's (Preliminary, Contingent Final, Final, and Supplementary)
Public Report(s) and Disclosure Abstract, contained in the public report, in
connection with my purchase of apartment(s) (insert apartment numbers) in the
(insert name of condominium project) condominium project.



I understand that I
have a legal right under Hawaii law to cancel my purchase, if I desire to do
so, without any penalty or obligation within thirty days from the date the
above Public Report or Reports were delivered to me.  If I cancel, I understand
that I will be entitled to receive the refund of any downpayment or deposit,
less any escrow cancellation fees and other costs, up to $250.



If I decide to cancel,
I understand that I can do so by notifying (insert name of seller) at (insert
address of seller) by mail or telegram sent before:  (1) the conveyance of my
apartment(s) to me; or (2) midnight of the thirtieth day after delivery of the
Public Report(s) to me, whichever is earlier.  If I send or deliver my written
notice some other way, it must be delivered to the above address no later than
that time.  I understand that I can use any written statement that is signed
and dated by me and states my intention to cancel, or I may use this notice by
checking the appropriate box and by signing and dating below.



I understand that if I
do not act within the above thirty-day period or if the apartment is conveyed
to me within the above thirty-day period, I will be considered to have executed
this receipt and to have waived my right to cancel my purchase.  I also
understand that I can waive my right to cancel by checking the appropriate box,
by signing and dating below, and by returning this notice to (insert name of
seller).  I HAVE RECEIVED A COPY OF:



(1)  THE DEVELOPER'S (PRELIMINARY, CONTINGENT FINAL,
FINAL, AND SUPPLEMENTARY) PUBLIC REPORT(S) ON (insert name of condominium
project); AND



(2)  THE DISCLOSURE ABSTRACT CONTAINED IN THE PUBLIC
REPORT.



_______________________ ______________________



Purchaser's
signature Date



 



__________________________________________



__________________________________________



 



I HAVE HAD AN OPPORTUNITY TO READ THE PUBLIC
REPORT(S) AND



[  ] I WAIVE MY RIGHT TO CANCEL.



[  ] I HEREBY EXERCISE MY RIGHT TO CANCEL.



_______________________ _____________________



Purchaser's
signature Date"



 



(e)  No obligation to purchase an apartment
under any agreement for the purchase or reservation of an apartment entered
into prior to the purchaser's receipt of either a contingent final public
report or a final public report is enforceable against the purchaser under such
agreement.



(f)  Where a developer has delivered to a
purchaser a contingent final public report and the purchaser has previously
waived the purchaser's right to cancel the purchaser's agreement for the
purchase or reservation of an apartment pursuant to this section:



(1)  The issuance of an effective date for a final
public report prior to the expiration of the contingent final public report
shall not affect the enforceability of the purchaser's obligations under the
purchaser's agreement for the purchase of an apartment;



(2)  The developer shall not be required to deliver to
the purchaser the final public report for the project and receipt and notice
set forth in subsection (d); and



(3)  The developer shall promptly deliver to the
purchaser a disclosure statement informing them that the commission has issued
an effective date for the final public report and containing all information
contained in the final public report that is not contained in the contingent
final public report.



(g)  Notwithstanding any other provision to the
contrary, this section shall not apply to a time share project duly registered
under chapter 514E if, with regard to that time share project:



(1)  A copy of the disclosure statement required by
chapter 514E is required to be delivered to the purchaser or prospective
purchaser; or



(2)  Pursuant to section 514E-30, a copy of the
disclosure statement required by chapter 514E is not required to be delivered
to the purchaser or prospective purchaser because the offer and sale of the
time share interest is made outside of Hawaii. [L 1977, c 98, pt of §2; am L
1977, c 193, §7; am L 1984, c 58, §5; gen ch 1985; am L 1986, c 295, §§6, 7; am
L 1991, c 44, §§22, 23; am L 1997, c 135, §10; am L 1998, c 11, §25; am L 2001,
c 237, pt of §3; am L 2002, c 204, §5]



 



Case Notes



 



  Binding contracts; effect of supplementary reports.  50 H.
540, 445 P.2d 109.



  Buying option rights to purchase apartments at discounted
price, through separate letter agreement, and not the rights to purchase
apartments themselves, placed buyers outside the class of buyers protected by
this section.  80 H. 159, 907 P.2d 745.