[§201H-51]  Corporation's right torepurchase or rent real property; authority to seek recovery.  (a) Notwithstanding any provisions to the contrary, during the period in which therestrictions in section 201H-47 are in effect, the following provisions shallapply when dwelling units developed, constructed, financed, purchased, or soldpursuant to Act 105, Session Laws of Hawaii 1970, as amended, are found to havea substantial construction defect, or when vacant lands developed, financed,purchased, or sold pursuant to Act 105, Session Laws of Hawaii 1970, asamended, are found to have a substantial soil defect:

(1)  The corporation shall have the right, but not theobligation, to repurchase a dwelling unit or land that has a defect, regardlessof whether or not the owner wishes to sell; provided that those repurchasesshall be in accordance with the following provisions:

(A)  The corporation may repurchase a dwellingunit or land if:

(i)  The dwelling unit or land is deemed unsafeby the county building department;

(ii)  The defects are irreparable; or

(iii)  In the opinion of the corporation, thedefect is of such magnitude that it will take longer than one year to repair;

(B)  The corporation's purchase price shall bebased on the formula set forth in section 201H‑47(a)(1);

(C)  After repairs to the unit or land arecompleted, the former owner shall have the first right of refusal to repurchasethe real property;

(D)  The corporation shall give preference inall other projects of the corporation to all owners whose real property isrepurchased by the corporation under this subsection, and the corporation maywaive certain eligibility requirements for these owners; and

(E)  If the corporation exercises its right torepurchase defective real property against an owner's wishes pursuant to thisparagraph, the corporation shall provide relocation assistance to that owner asprovided in chapter 111;

(2)  If the corporation does not opt to repurchasedefective real property, the corporation shall also have the right, but not theobligation, to enter into a contract to repair a dwelling unit which has aconstruction defect or land which has a soil defect.  During the period thatthe real property is being repaired, the corporation shall rent that real propertyfrom the owner for an amount not to exceed the owner's present mortgagepayments; and

(3)  If the corporation does not execute either acontract to repurchase the real property or an agreement to repair and rent thereal property within ninety days after written notice is given to thecorporation of a construction defect, the owner may pursue any other availablelegal remedies.

For the purposes of this section:

"Substantial construction defect"includes but is not limited to:

(1)  Structural defects such as shifting foundationsand bearing walls;

(2)  Structural deficiencies due to the use ofdefective or undersized materials; and

(3)  Defects affecting the health and safety ofoccupants.

"Substantial soil defect" meansshifting, sliding, or sinking ground of such degree as to affect the dwellingunit on the land or the health and safety of the occupants of the land.

(b)  If moneys are expended by the corporationpursuant to subsection (a)(1) and (2), the corporation shall have the authorityto take necessary legal action against the developer, co‑developer,general contractor, and their subcontractors, consultants, and other partiesnotwithstanding chapter 657.

(c)  If real property developed, constructed,financed, purchased, or sold pursuant to Act 105, Session Laws of Hawaii 1970,as amended, is found to have a substantial construction or soil defect, thecorporation shall have the right, but not the obligation, to file or cause tobe filed a legal action on behalf of or by the owner or lessee of the realproperty for the recovery of damages or for injunctive relief against thedeveloper, co-developer, general contractor, and their subcontractors,consultants, and other parties notwithstanding chapter 657.  Additionally,notwithstanding any provision of rule 23 of the Hawaii rules of civilprocedure, the corporation may file or cause to be filed a legal action broughtunder this subsection as a class action on behalf of or by at least two ownersor lessees of real property that have similar substantial construction or soildefects.

(d)  Nothing in this chapter shall be construedto diminish the rights or remedies of the corporation otherwise provided undercommon law, by law, or by contract.

(e)  The corporation shall adopt rules pursuantto chapter 91 necessary for the purposes of this section.

(f)  This section shall not apply to aparticular real property and shall not apply after subsequent transfers oftitle of that real property if the corporation releases the restrictions whenthe real property is financed under a federally subsidized mortgage program.

(g)  If any subsection, sentence, clause, orphrase of this section, or its application to any person or transaction orother circumstances, is for any reason held to be unconstitutional or invalid,the remaining subsections, sentences, clauses, and phrases of this section, orthe application of this section to other persons or transactions orcircumstances, shall not be affected.  The legislature hereby declares that itwould have passed this section and each subsection, clause, or phrase thereof,irrespective of the fact that any one or more subsections, sentences, clauses,or phrases of this section, or its application to any person or transaction orother circumstance, may be declared unconstitutional or invalid. [L 2006, c180, pt of §3]