§206-10  Restrictions on sale and use of
residential lots by purchaser.  (a)  For a period of five years after the
date of purchase of any lot under this chapter (which date shall be deemed to
be the date of the agreement of sale or deed under which the lot was originally
purchased or agreed to be purchased) the lot shall not be sold by the original
purchaser thereof unless the same, together with the improvements thereon has
first been offered in writing to the board of land and natural resources under the
option reserved by this chapter and the board has either refused or failed
within the time required by this section to exercise the option.



(b)  Any original purchaser intending to sell
such lot and improvements within the five-year period shall first notify the
board in writing of the original purchaser's intention.  The notice shall
specify the original purchaser's address and shall expressly offer to sell such
property to the board at a price which shall not exceed the sum of (1) the
original cost of the land, and (2) the replacement value, less depreciation at
the rates used for real property tax purposes, of all buildings and
improvements thereon, to be determined by three appraisers; one appointed by
the board, one appointed by the owner, and the third by the two appraisers so
appointed, the cost to be borne equally by the parties.  Within thirty days
after the receipt of the notice, the board shall in writing notify the original
purchaser at the address so specified whether it elects to exercise the
option.  If the board refuses, or fails within the thirty-day period, to reply
to the offer, the original purchaser may sell the property to any other person
free from any price restrictions, provided that if the board elects to
purchase, the board shall thereupon use its best efforts to redispose of it as
soon as practicable subject to the lien of any mortgage, to a qualified and
responsible person who will assume the obligation of mortgage and debt secured
thereby.



(c)  The board may resell any lot and
improvements so purchased at a price not to exceed the actual cost thereof to
the board, with the addition of a reasonable amount to cover overhead and
estimated and actual expenses.



(d)  Any original deed or original agreement of
sale from the board to any original purchaser of a residence lot shall contain
a covenant running with the land (and shall, whether or not the condition is
contained in the instrument, be subject to the requirement) that the original
purchaser shall erect on the lot, within two years following the date of
purchase, a suitable residence building to conform to the terms set forth in
the instrument, with a proviso that the board may, on application of the
original purchaser, extend the period from time to time for good cause shown. 
Other reasonable restrictions designed to prevent the lots from becoming slum
areas may be established by the board for any development project and included
in the agreement of sale or deeds as covenants running with the land for a term
of twenty-one years.



(e)  No residence lot shall be used for any
purpose other than residence purposes for a period of twenty-one years
following the date of the first sale of such lot by the board; provided that in
the event the lot is zoned or rezoned by governmental authority for
nonresidence purposes, the restriction shall be relaxed to the extent permitted
by the zoning laws or regulations.



(f)  Subsections (a) and (b) of this section
shall not be applicable to a sale under foreclosure by a mortgagee of any lot,
or to the transfer of title by a mortgagee after foreclosure or otherwise to
any agency of the United States government pursuant to the terms of any
insurance or guarantee of mortgage loan by such agency, or to any subsequent
purchaser. [L 1961, c 6, pt of §10; am L 1965, c 157, pt of §4; Supp, pt of
§98J-10; HRS §206-10; gen ch 1985]