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



(b)  Issuance of patent, lessee of right of
purchase lease.  The lessee of any existing right of purchase lease, at a time
and under conditions that are contained in the lease, shall be entitled to a
land patent from the board conveying to the lessee a fee simple title to the
land described in the lessee's lease upon the payment of the fair market price
of 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 the
premises and has resided thereon not less than two years and has substantially
performed 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 the
first installment, the holder of a freehold agreement is entitled to a land
patent for the premises described therein, if the following conditions, in
addition to those set forth herein, have been substantially performed:



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



(2)  Cultivation of not less than twenty-five per cent
of the area of the premises, and the planting and care of not less than an
average of ten timber, shade, or fruit trees per acre, if agricultural land, at
any one time before the end of the third year, or fencing in the premises if
pastoral land within that time; provided that if the premises are classed as
pastoral-agricultural land, the foregoing alternative conditions shall apply
respectively to the two kinds of land;



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



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



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



The holder of a freehold agreement shall allow
the land agents to enter and examine the premises at all reasonable times to
see that the conditions are being performed.  The holder shall not assign or
sublet, conditionally or otherwise, the holder's interest or any part thereof,
under the freehold agreement, without the written consent of the board indorsed
on the agreement; and provided further that freeholders having the whole
interest in a freehold agreement, at any time when all the conditions thereof
to be performed by the freeholder up to that time shall have been substantially
performed, may surrender to the government the interest by delivery of the
freehold agreement to the land agent, with the intention to surrender the
interest clearly indorsed thereon and signed by them and duly attested.  The
surrender shall release the freeholders from all further duty or performance of
the conditions of the instrument surrendered.  But no surrender shall be
permitted if any freeholders are under the age of eighteen years, unless the
minors are represented by statutory guardians; and provided further that any
freeholder over the age of eighteen may assign the freeholder's interest to the
freeholder's cotenants.



(d)  Right of purchase lease; termination,
forfeiture, or surrender.  Upon the termination of a right of purchase lease by
lapse of time, or upon the forfeiture or surrender of the lease or a freehold
agreement, 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 for
the uses as provided in this chapter.  Before the disposition, the fair market
value thereof shall be established by appraisal.  The value attributable to the
improvements in the appraisal shall be paid to the surrendering lessees or
freeholders, upon resale of the premises, and the director of finance shall pay
the amount of the valuation upon the requisition of the board out of the funds.



(e)  Assignment; certificate of occupation or
homestead lease.  No existing certificate of occupation or existing homestead
lease, or fractional interest thereof, shall be transferable or assignable
except by conveyance, devise, bequest, or intestate succession and with the
prior approval of the board of land and natural resources; provided that
transfer or assignment by conveyance, devise, or bequest shall be limited to a
member 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, of
the occupier or lessee.



All the successors shall be subject to the
performance of the unperformed conditions of the certificate of occupation or
the homestead lease.



(f)  Option of cotenant to compel others to buy
or sell.  In case two or more persons become cotenants under any existing right
of purchase lease, certificate of occupation, or homestead lease by inheritance
or otherwise, any one or more of the persons, less than the whole number, may
file in the office of the land agent an offer to the remainder of the persons
to buy their interest in the premises or to sell them their own interest
therein at a stated price, according to the proportion of the respective
interest in question, and may deposit with the land agent the amount of the
offered price in money, with a fee of $10.  The land agent shall thereupon
notify the persons to whom the offer is made of the nature of the offer and
order them to file with the land agent their answer within sixty days whether
they will buy or sell according to the offer.  If the persons to whom the offer
is made file with the land agent within sixty days of the time of their
receiving the notification, their answer stating that they will sell their
interest according to the terms of the offer, the land agent shall indorse the
fact of the sale with the amount of the consideration on the lease and pay to
the persons the amount of the consideration deposited with the land agent
according to their individual interest; and the interest of the persons shall
thereupon vest in the persons making the offer.  The fact of the transfer shall
be properly recorded in the official records of the land agent and indorsed
upon the lease held by the lessee.



If, however, the persons to whom the offer is
made fail to answer within sixty days from the time of their being notified of
the 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 within
sixty days that they will buy the interest of the persons making the offer on
the terms offered, but fail within sixty days after the notification to deposit
the amount representing the value of the interest according to the terms
offered, their interest shall vest in the persons making the offer and the
amount of the consideration shall be paid by the land agent of them
individually or their respective representatives upon application.  In such
case, the fact of the transfer shall be recorded and indorsed as above
provided.



In the event that any funds held by the land
agent hereunder are not paid to the persons to whom properly payable, because
of the inability of the land agent to locate those persons, the funds, after
the expiration of one year, shall be deposited in the department of budget and
finance of the State and there abide the claim of any person thereto lawfully
entitled; provided that no claim to the funds shall be allowed unless the claim
is made within five years after the deposit.  Payment of any claim duly filed
may be made if the department of budget and finance and the board concur in
finding the claim valid and proper, but if the claimant fails to obtain
concurrency of the department of budget and finance and the board within sixty
days of the filing of the claimant's claim, the claimant may present a petition
to the circuit court of the first judicial circuit in that behalf, notice
whereof shall be given to the attorney general, who may appear and defend on
behalf of the State, and if the court renders a judgment in favor of the
claimant, the department of budget and finance shall pay the amount due without
interest.



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



(g)  Forfeiture; existing certificate of
occupation or homestead lease.  The violation of any of the conditions of any
existing certificate of occupation or homestead lease shall be sufficient cause
for the board, upon failure of the occupier or lessee within a reasonable
period of time to remedy the default, after notice thereof in the manner
provided in section 171-20, to take possession of the demised premises without
demand or previous entry, with or without legal process, and thereby, subject
to section 171-21, terminate the estate created.



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



(i)  Mortgage of homestead leases.  Whenever an
existing homestead lease is mortgaged pursuant to section 171-22, the consent
to mortgage from the board of land and natural resources may contain a
condition exempting the lease from subsection (e) for the duration of the
mortgage. [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, c
383, §36; am L 2000, c 166, §2; am L 2004, c 187, §1]



 



Case Notes



 



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