§206-9  Disposition of lands.  (a) Generally.  It shall be the policy of the board of land and natural resourcesto encourage insofar as possible the widespread fee simple ownership ofresidential lots of modest size and price.  Where necessary or desirable, theboard may issue residential leases or leases with an option to purchase the feein any development area upon such reasonable terms and conditions as may bedetermined by the board.  Disposition of lands shall be by such public methodas shall most likely carry out the purposes of this chapter.

(b)  Land disposed of by private developers. Land disposed of through private developers shall be sold in accord with theterms prescribed by the board.  A reasonable developer's profit shall beallowed, but the board shall reserve the right to inspect books, records, andconstruction, take necessary precautions against speculation by the privatedeveloper in lands acquired under this chapter and renegotiate any contract toprevent unconscionable profit by the private developer.

An unconscionable profit means any profit orreturn in excess of what the board considers as reasonable.  The board maysurvey the prevailing rates of profit for developers in determining areasonable rate.

(c)  Land disposed of by the board.  To beeligible to purchase or lease a residence lot from the board, the buyer shallfurnish satisfactory evidence to the board, under oath, and otherwise asrequired by the board, that the buyer:

(1)  Is a citizen of the United States or a declarantalien who has resided in the State for a period of five years or more;

(2)  Is at least eighteen years of age;

(3)  Is a bona fide resident of the State and has abona fide intent to reside in the development area concerned, if successful inpurchasing or leasing a lot in the area under this chapter; and

(4)  Has a gross income sufficient to meet the cost ofthe land being disposed of by the board.  The board shall develop policieswhereby those most deserving of housing shall be given preference.  Indeveloping the policies, the board shall consider the applicant's householdincome, the number of dependents, and other factors that the board may deempertinent.

Any person whom the board finds to be withinone of the following classes, shall not be eligible to become an originalpurchaser or lessee of a resident lot, to wit:

(A)  A person who oneself or whose husband orwife or both (when husband and wife are living together) owns or own in feesimple lands suitable for residential purposes within the political subdivisionand in or reasonably near the place of residence or place of business of theperson; and

(B)  A person who oneself or whose husband orwife (when husband and wife are living together) has pending an unrefusedapplication to purchase a lot in a development area under this chapter from theboard.

Any person, firm, association, or corporationmay purchase business lots within a development project for business necessaryto service the project.  The lots shall be sold at public auction to thehighest bidder for cash.

The board shall require all applicants for thepurchase or lease of residence lots to make application therefor under oath,and may require additional testimony or evidence under oath in connection withany application.  The determination of any applicant's eligibility under thischapter by the board shall be conclusive as to all persons thereafter dealingwith the property; but the making of any false statement knowingly by theapplicant or other person to the board in connection with any application shallconstitute perjury and be punishable as perjury.

When a development project or projects has orhave been sufficiently completed to be suitable for disposition to individualpurchasers or lessees, the board shall sell or lease the lots therein toeligible purchasers or lessees and shall give public notice of the dispositionon the island of Oahu.  The notice shall state in general terms the size,location, and prices or rental of lots to be sold or leased, the terms of saleor lease, and the last date on which application will be received by the board,which date shall not be less than thirty days after the first notice.  Thenotice shall also state the times and places at which more detailed informationwith respect to the sale or lease may be secured by interested persons.  Notmore than one lot shall be sold or leased to each applicant.

The purchaser at the purchaser's option may paythe purchase price in full on delivery of a deed or pay not less than ten percent of the purchase price and execute with the board an agreement of saleunder the terms of which the unpaid balance is to be paid in monthlyinstallments and over a period that the board determines, with interest onunpaid balances at a rate not to exceed six and one-half per cent, payablemonthly, deed to be delivered on final payment; provided that not less thanone-half of one per cent on account of principal shall be required by theagreement to be paid each month.  Taxes shall be prorated as of the date of deliveryof deed in the case of a cash sale and as of the date of execution of theagreement of sale in the case of a sale in other cases.  Each agreement of saleshall provide that the whole or any part of the unpaid balance of the purchaseprice plus accrued interests may be paid at any time. [L 1961, c 6, pt of §10;am L 1965, c 157, pt of §4; Supp, pt of §98J-10; HRS §206-9; am L 1972, c 2,§4; gen ch 1985; am L 1998, c 2, §64]