§171-99  Continuation of rights underexisting homestead leases, certificates of occupation, right of purchaseleases, and cash freehold agreements.  (a)  Issuance of land patents tooccupier or lessee of homestead lands.  A fee simple patent shall be issued toevery existing occupier under a certificate of occupation issued heretofore,and to every lessee under a nine hundred and ninety-nine year homestead leaseissued heretofore, of public lands, where the lands have been improved underthe certificate or lease, or have been used as a place of residence by theoccupier or lessee for an aggregate continuous period of not less than tenyears upon payment to the board of land and natural resources of a fair marketprice, disregarding the value of the improvements made by the occupier orlessee, which price shall be determined by appraisal as provided for in thischapter; provided that the board may exclude from these patents areas requiredas roadways to other lots.

(b)  Issuance of patent, lessee of right ofpurchase lease.  The lessee of any existing right of purchase lease, at a timeand under conditions that are contained in the lease, shall be entitled to aland patent from the board conveying to the lessee a fee simple title to theland described in the lessee's lease upon the payment of the fair market priceof the land as determined by appraisal as provided for in this chapter;provided that the lessee has reduced to cultivation twenty-five per cent of thepremises and has resided thereon not less than two years and has substantiallyperformed all other conditions of the lessee's lease.

(c)  Cash freeholds, agreement, patent,conditions.  At the end of three years from the date of the payment of thefirst installment, the holder of a freehold agreement is entitled to a landpatent for the premises described therein, if the following conditions, inaddition to those set forth herein, have been substantially performed:

(1)  Payment of the balance of the purchase price inequal installments, in one, two, and three years respectively, from the date ofthe freehold agreement with interest annually at the rate of four per cent;provided that the freeholder may pay the installment before it is due andthereby stop the corresponding interest;

(2)  Cultivation of not less than twenty-five per centof the area of the premises, and the planting and care of not less than anaverage of ten timber, shade, or fruit trees per acre, if agricultural land, atany one time before the end of the third year, or fencing in the premises ifpastoral land within that time; provided that if the premises are classed aspastoral-agricultural land, the foregoing alternative conditions shall applyrespectively to the two kinds of land;

(3)  Maintenance by the freeholder of the freeholder'shome on the premises from the end of the first to the end of the third year;

(4)  Conditions for the prevention of waste, theplanting of trees or the protection of trees growing or to be planted on thepremises, or for the destruction of vegetable pests that may be on the premisesor the prevention of the future introduction of pests thereon;

(5)  Payment of all taxes that may be due on accountof the premises.

The holder of a freehold agreement shall allowthe land agents to enter and examine the premises at all reasonable times tosee that the conditions are being performed.  The holder shall not assign orsublet, conditionally or otherwise, the holder's interest or any part thereof,under the freehold agreement, without the written consent of the board indorsedon the agreement; and provided further that freeholders having the wholeinterest in a freehold agreement, at any time when all the conditions thereofto be performed by the freeholder up to that time shall have been substantiallyperformed, may surrender to the government the interest by delivery of thefreehold agreement to the land agent, with the intention to surrender theinterest clearly indorsed thereon and signed by them and duly attested.  Thesurrender shall release the freeholders from all further duty or performance ofthe conditions of the instrument surrendered.  But no surrender shall bepermitted if any freeholders are under the age of eighteen years, unless theminors are represented by statutory guardians; and provided further that anyfreeholder over the age of eighteen may assign the freeholder's interest to thefreeholder's cotenants.

(d)  Right of purchase lease; termination,forfeiture, or surrender.  Upon the termination of a right of purchase lease bylapse of time, or upon the forfeiture or surrender of the lease or a freeholdagreement, the board, in its discretion and within the limit of its authority,may open the premises or any part thereof for disposition in the manner or forthe uses as provided in this chapter.  Before the disposition, the fair marketvalue thereof shall be established by appraisal.  The value attributable to theimprovements in the appraisal shall be paid to the surrendering lessees orfreeholders, upon resale of the premises, and the director of finance shall paythe amount of the valuation upon the requisition of the board out of the funds.

(e)  Assignment; certificate of occupation orhomestead lease.  No existing certificate of occupation or existing homesteadlease, or fractional interest thereof, shall be transferable or assignableexcept by conveyance, devise, bequest, or intestate succession and with theprior approval of the board of land and natural resources; provided thattransfer or assignment by conveyance, devise, or bequest shall be limited to amember or members of the occupier's or lessee's family.

For the purposes of this section,"family" means the spouse, reciprocal beneficiary, children, parents,siblings, grandparents, grandchildren, nieces, nephews, a parent's siblings,children of a parent's siblings, and grandchildren of a parent's siblings, ofthe occupier or lessee.

All the successors shall be subject to theperformance of the unperformed conditions of the certificate of occupation orthe homestead lease.

(f)  Option of cotenant to compel others to buyor sell.  In case two or more persons become cotenants under any existing rightof purchase lease, certificate of occupation, or homestead lease by inheritanceor otherwise, any one or more of the persons, less than the whole number, mayfile in the office of the land agent an offer to the remainder of the personsto buy their interest in the premises or to sell them their own interesttherein at a stated price, according to the proportion of the respectiveinterest in question, and may deposit with the land agent the amount of theoffered price in money, with a fee of $10.  The land agent shall thereuponnotify the persons to whom the offer is made of the nature of the offer andorder them to file with the land agent their answer within sixty days whetherthey will buy or sell according to the offer.  If the persons to whom the offeris made file with the land agent within sixty days of the time of theirreceiving the notification, their answer stating that they will sell theirinterest according to the terms of the offer, the land agent shall indorse thefact of the sale with the amount of the consideration on the lease and pay tothe persons the amount of the consideration deposited with the land agentaccording to their individual interest; and the interest of the persons shallthereupon vest in the persons making the offer.  The fact of the transfer shallbe properly recorded in the official records of the land agent and indorsedupon the lease held by the lessee.

If, however, the persons to whom the offer ismade fail to answer within sixty days from the time of their being notified ofthe offer or within sixty days from the time the notice of the offer [is]mailed to their last known place or places of abode, or shall answer withinsixty days that they will buy the interest of the persons making the offer onthe terms offered, but fail within sixty days after the notification to depositthe amount representing the value of the interest according to the termsoffered, their interest shall vest in the persons making the offer and theamount of the consideration shall be paid by the land agent of themindividually or their respective representatives upon application.  In suchcase, the fact of the transfer shall be recorded and indorsed as aboveprovided.

In the event that any funds held by the landagent hereunder are not paid to the persons to whom properly payable, becauseof the inability of the land agent to locate those persons, the funds, afterthe expiration of one year, shall be deposited in the department of budget andfinance of the State and there abide the claim of any person thereto lawfullyentitled; provided that no claim to the funds shall be allowed unless the claimis made within five years after the deposit.  Payment of any claim duly filedmay be made if the department of budget and finance and the board concur infinding the claim valid and proper, but if the claimant fails to obtainconcurrency of the department of budget and finance and the board within sixtydays of the filing of the claimant's claim, the claimant may present a petitionto the circuit court of the first judicial circuit in that behalf, noticewhereof shall be given to the attorney general, who may appear and defend onbehalf of the State, and if the court renders a judgment in favor of theclaimant, the department of budget and finance shall pay the amount due withoutinterest.

But if the persons to whom the offer is made,within sixty days from the time of the notification, shall make answer to theland agent that they will buy the interest of the offering parties and shalldeposit within sixty days with the land agent the amount required for thepurpose according to the terms of the offer, the land agent shall indorse andrecord the fact of the sale as above provided, and pay to the offering partiesthe amount according to their individual interest; and the interest of theoffering parties shall thereupon vest in the answering parties.  In such case,the consideration money deposited by the offering parties shall be returned tothem.

(g)  Forfeiture; existing certificate ofoccupation or homestead lease.  The violation of any of the conditions of anyexisting certificate of occupation or homestead lease shall be sufficient causefor the board, upon failure of the occupier or lessee within a reasonableperiod of time to remedy the default, after notice thereof in the mannerprovided in section 171-20, to take possession of the demised premises withoutdemand or previous entry, with or without legal process, and thereby, subjectto section 171-21, terminate the estate created.

(h)  Forfeiture; cash freeholds.  In the caseof default in the payment of any of the installments due on any cash freeholdagreement for thirty days after the installments are due, or failure ofperformance of any other conditions, the board may take possession of thepremises, upon failure of the freeholder within a reasonable period of time toremedy the default, after notice thereof in the manner provided in section171-20, without demand or previous entry, with or without legal process, andthereby subject to section 171-21, terminate the estate created.

(i)  Mortgage of homestead leases.  Whenever anexisting homestead lease is mortgaged pursuant to section 171-22, the consentto mortgage from the board of land and natural resources may contain acondition exempting the lease from subsection (e) for the duration of themortgage. [L 1962, c 32, pt of §2; am L 1963, c 114, §1; Supp, §103A-93; HRS§171-99; am L 1980, c 17, §1; am L 1981, c 15, §1; gen ch 1985; am L 1997, c383, §36; am L 2000, c 166, §2; am L 2004, c 187, §1]

 

Case Notes

 

  Fee simple interest may be purchased under subsection (a) bypayment of "fair market price", which, under this section and §171-79,requires appraisers to ignore both the value of improvements erected on thepremises and the lease encumbrances.  85 H. 217, 941 P.2d 300.