MauiLifeStyleBlog

This article was meant for Realtors® and comes from REALTOR.org/healthreform.  but found it was really simply explained for anybody

Health Care Reform: What's the Impact on You?
Now that health insurance reform is signed into law, what is the impact on real estate brokers and sales associates?

First, if you are an individual who buys your own coverage and have a policy you like, your coverage would be “grandfathered” and would be considered “qualified coverage.” If you are an employer who already offers health insurance to your salaried workers, you may continue to offer the plan you have. Your existing plan is “grandfathered” and you are deemed in compliance with the new employer mandate. You may continue to enroll new employees and terminate those employees who leave the firm without jeopardizing this grandfathered status.

Second, the law creates a uniform, national set of insurance ratings and underwriting standards. These new rules spell out the criteria that insurers can use when evaluating an application. The goal of the new standards is to create a set of rules that more closely resemble what most folks think of as the rules that apply to a group policy.

Insurers can charge different premiums based on policy holders' factors such as age, the type of policy purchased, and geographic area. Insurers can't, however, deny coverage or base premiums on an applicant's preexisting condition, claims history or gender. This is a significant change from the current rules in the great majority of states.

Second, the law will seek to expand the individual and small-business insurance markets, which are the markets through which real estate brokers and sales associates principally shop for coverage.

The goal is to increase access to affordable coverage by increasing competition among insurers, in part by expanding the pools of insureds (with a new requirement for all individuals to have coverage), encouraging insurers to enter new markets, and by allowing markets to cross state lines, among other things. The eventual goal is to merge the individual and small group markets into one larger market. In either case, independent contractors will be able to shop for coverage in both the individual and the small-business markets, so their options will be increased.

Third, the law creates the insurance exchanges that received so much attention in the media. The exchanges are in effect the new insurance marketplaces through which individuals and small employers will shop for coverage. Because insurance ratings and underwriting standards are made more uniform under the law, shopping for coverage through the exchange’s online services or through an insurance broker is simplified, at least in theory, because comparison between plans is made easier.

Fourth, the law requires individuals to buy health insurance and gives incentives businesses to make health insurance available to their employees. That means practitioners will have to buy coverage if they don't already have it or face a penalty unless they can show they can't get coverage for less than a certain percentage of their income--10 percent--or or would otherwise face a financial hardship. If they can't get an exemption for one of these reasons, they pay a fine.

The employer mandate covers businesses with more than 50 employees. Most real estate brokerages, as small businesses with fewer than 50 employees (the sales associates, as independent contractors, don't count against the employee total), are expected to be exempted from the mandate. Large employers subject to the mandate that fail to comply face a penalty. Affordability credits, to help offset costs, are available to both individuals and very small employers, including very small nonprofit associations that are employers.

10 Best Places for Second Homes

By STEVEN M. SEARS      Wall Street Journal 3-9-2010

At long last, the market for luxury real estate is coming back to life.

 Hale O'Ola, Makena(Maui)

Prices for primary residences, which plunged at least 20% from the peak in 2007, appear to have bottomed. In some of the snappiest locations, scattered bidding wars are breaking out and prices are turning upward.

In Greenwich, Conn., realty brokers say, the final months of 2009 were almost record-setters for sales volume, as two years of pent-up demand was unleashed. Even the megadeal is back. In Beverly Hills, film producer Jeffrey Katzenberg just plunked down $35 million for an 8,700-square-foot home on six acres.

There's nothing like a stabilized economy and a huge rebound in stocks to send folks looking for the perfect manse. The return of hefty Wall Street bonuses hasn't hurt, either.

With all that in mind, and with summer just around the corner, Barron's sized up the market for upscale second homes, one of the greatest luxuries of all. We scoped out dozens of deluxe enclaves across the country, speaking with brokers, homeowners and others.

Prices are way down–40% off the peak in some locations. Seemingly at or near bottom, they are starting to attract the first wave of bargain hunters–and not just families in need of R&R.

Hard-nosed investors also are on the prowl, says Jan Reuter, head of residential real estate at U.S. Trust Bank of America Private Wealth Management: "We've seen an uptick in buying in just the last couple of months."

Hard-nosed investors also are on the prowl, says Jan Reuter, head of residential real estate at U.S.

To help you in the hunt, Barron's has selected the 10 best places in America for second homes. These alluring locales have it all: gorgeous houses, spectacular views, world-class golf, fishing and skiing, fine dining and great shopping. You'll find the complete range of lifestyles, from peaceful and easy to vigorously social.

Some warnings: 1) Our selections are every bit as subjective as tastes in homes themselves. 2) The prices cited are based mainly on conversations with locals, because hard data isn't available. 3) Your plush new retreat may take some time to rise in value. Serious appreciation will require a better economy and, quite possibly, another big rally in stocks.

But hey, you could do worse than marking time in paradise.

1. Maui Consistently rated the "Best Island in the World" by travel experts, this Hawaiian beauty underwent a growth spurt during the past decade that some critics bemoaned as excessive. But the southern coast, anchored by the hamlet of Wailea, has weathered it all well. One of the first master-planned resort communities in the nation, it's a balanced blend of understated gated communities, luxury resort hotels, three excellent golf courses, a tennis center and, of course, several crescent sandy beaches. Wailea has 500 single-family homes, and their views are stunning: lush, verdant hills, brilliantly blue ocean and, after the steamy sun showers, rainbows over the horizon.

Median Price: $1.5 million     Drop From Peak: 27%      Neighbor: Oprah Winfrey

2. Kiawah Island, S.C. Languid elegance defines South Carolina's coast, and Kiawah, just off Charleston, may be its ideal expression. The island has one developer, Kiawah Development Partners, and an architectural review board that protects the 4,500 or so properties from the excesses often seen when wealth meets water. It has 10 miles of hard-sand beaches and abundant wildlife: bobcats, gray foxes, loggerhead turtles and more. Its Ocean Course has long been favorite of golfers; it hosted the 2007 Senior PGA Championship. Want to tee up some culture? Charleston is just 45 minutes away.

Median Price: $1.4 million     Drop From Peak: 21%      Neighbor: Dan Marino

3. The Hamptons Long the favored retreat of high-powered New Yorkers, the Hamptons are a just now experiencing a fresh jump in home sales, realty brokers say. Credit the revival in Wall Street bonuses. Southampton, bastion of old money, is known for its grand estates, but lovely homes can be found in what not long ago were potato fields. In chic East Hampton, the choicest real estate is on Georgica Pond. Alas, most of the area's finest properties never come to market. Once you own a home in the Hamptons, you own it forever.

Median Price: $1.5 million     Drop from Peak: 30%      Neighbor: Steven Spielberg

4. Park City, Utah Skiers love Park City for its powdery winters, but homeowners relish the summers, too. The crowds thin out, life slows down and the tall aspens lining the nearby Wasatch range shimmer in the breeze. The one-street Old West downtown is dotted with classic Victorian houses, while Deer Valley, an understated year-round resort community, sits on the eastern edge. Its namesake ski hill has been crowned by readers of Ski Magazine as North America's top ski resort for three years running. For $100,000, you can join the nearby Talisker Club, with links designed by PGA Tour Champion Mark O'Meara. Bonus: Salt Lake City International Airport, a Delta Air Lines hub, has direct flights to the East and West Coasts.

Median Price: $1 million      Drop From Peak: 45%      Neighbor: Robert Redford

5. Aspen, Colo. Aspen isn't just a year-round playground; it's also a cultural oasis, the home to the Aspen Institute think tank, a world-class symphony, and dance and art festivals. The four major ski hills speak for the themselves. The Maroon Creek Club includes a challenging golf course designed by Tom Fazio. The city's West End has a mix of 19th-century Victorians and modern abodes not far from the "beachfront"–downtown neighborhoods within walking distance of the lift. The posh shopping is so good that some folks never find their way up to the trails.

Median Price: $5.6 million       Drop From Peak: 6%      Neighbor: Jack Nicholson

6. Pebble Beach, Calif. Golfer Jack Nicklaus once said that if he had one last round to play before he died, it would be at Pebble Beach. The site of four U.S. Opens, The Links are rated the No. 1 public course in America by Golf Digest for 2009-10. There are several other public and private golf courses within the guarded gates of the verdant Del Monte Forest, which surrounds the community of Pebble Beach. Stunning estates not far from the first tee offer sweeping views of Monterey Bay. Duffers who buy in can play the Golden Bear's dream course every day.

Median Price: $1.1 million      Drop Since Peak: 20%      Neighbor: Clint Eastwood.

7. Palm Beach This Florida island hovers above reality, and at $30 million-plus, so do its finest pads. Oodles of socialites and tycoons wouldn't have it any other way. Neither would Jimmy Buffett, Rush Limbaugh and too many other boldface names to mention. In addition to the never-ending social whirl, residents like the shopping on Worth Avenue and the beauty of Addison Mizner's Mediterranean-style architecture. Mortals can enjoy the town by buying "over the moat"– in Jupiter, North Palm Beach, Palm Beach Gardens and Delray Beach.

Median Price: $3.5 million      Drop From Peak: 11%      Neighbor: Henry Kravis

8. Captiva/Sanibel Island, Fla. Sitting off the coast of Fort Myers, a nerve center of America's foreclosure crisis, the barrier islands of Captiva and Sanibel are the very picture of laid-back living. Linked by a bridge at Sanibel's northern point, the islands are renowned for their pristine beaches and abundant seashells. Then there are the hiking trails; half the island is a nature preserve. The late Robert Rauschenberg is, even in death, one of the largest landowners. His 35-acre spread, complete with studio, is intact on Captiva's northern end.

Median Price: $3.5 million     Drop From Peak: 40%      Neighbor: Ted Koppel

9. Asheville, N.C. Nestled in the mountains of North Carolina, Asheville offers a four-seasons lifestyle with just enough culture and good restaurants to keep urban-withdrawal pangs at bay. Some homebuyers come from the Northeast, and many come from Florida to beat the heat. The locals call them "halfbacks," since Asheville is halfway up the East Coast. The town has a university and a thriving art scene. We like the 1920s-vintage Tudor homes in the Biltmore Forest district, once part of the adjacent Biltmore Estate. The funky Grove Park neighborhood is also worth a look.

Median Price: $700,000      Drop From Peak: 38%      Neighbor: Andie McDowell

10. Gasparilla Island, Fla. Katherine Hepburn used to rent a beach house here, and it's easy to see why. The small island off Florida's southwest coast has been lovingly preserved: The Gasparilla Act, a state law passed in 1980, put a tight lid on population density, building heights and commercial development. Golf carts -- some customized to resemble '57 Chevys -- are the favored mode of transportation. The historic downtown has gracious homes, and the waters around the island are renowned for tarpon fishing. To check it out, check into the plush Gasparilla Inn.

Median Price: $1.8 million. Drop From Peak: 18% Neighbor: Harrison Ford, frequent visitor.

It was worth to be seen during the early morning scuba dive cruise leaving from Maalaea (Maui) Hawaii in early February 2010

http://www.youtube.com/watch?v=DfqHmbOMWwI   by Lei

 Compliments of
Alan Zukerkorn
Hawaii Mortgage Company Inc.

PHONE:  (808) 988-6622     alan@hawaiimortgage.net

Your Rights as a Consumer

There has been a lot of confusion about the new 2010 Good Faith Estimate (GFE) and what a consumer is “promised” over the phone.  One of the main reasons HUD (Federal Dept. of Housing & Urban Development) made such a drastic change to how the lending industry works is due to lenders “low-balling” rates, providing inaccurate closing costs, and hard-selling uneducated consumers into loans they would normally not consider.  All this done solely to put more money in the pockets of greedy mortgage lenders.

On January 1^st, the new 2010 GFE was mandated by the Federal Government.  It gives the consumer an honest picture of the type of loan being offered, the fees associated with the loan, and their total closing costs.  Although I personally have many complaints as to how the new form provides the information, and the difficulty most consumers have in reading it, it has resulted in one important change:  If a consumer is provided one by a lender, they have received an honest rate quote.

Consumers must change the way they shop for a loan.  Calling around and getting verbal rate quotes is no longer (and has never been) a good way of picking a lender.  There is no way the government can regulate what a dishonest lender says to a consumer.  That is why the written and binding 2010 GFE is so important when considering a lender.  After you receive the 2010 GFE you as the consumer have specific rights.  The lender is bound to the fees, and most importantly, what they will be compensated for your loan.  Even if you complete your “shopping” several days later and rates have changed, the origination fees disclosed by the lender on your original quote are fixed, and not subject to change.  The GFE is also provided to the closing agent, and any fees that do not match, are not allowed to be added at closing.  There are a few exceptions, but in general, what you are promised at the beginning, must be the same at the end.

Remember these simple rules:  Always ask for a 2010 GFE.  When shopping, give each lender the same loan scenario.  Make sure the rate they quote you is for the same loan commitment (lock) period.  As a service to consumers, if you are uncertain of how to read the new form, please give me a call for a honest hassle-free review.

I am pleased to announce that I teamed up with Misha Sofianos, owner of Aloha Interior Maintenance Inc. who provided 33+ years of first class cleaning to satisfied Maui home owners and Developers.

Call Misha at 808-879-5953  or  283-3465  for a free estimate.

Why don't we have curbside recycling programs on Maui yet?

4.6 lbs of waste per person per day is way too much!!!

Recycling codes: What they mean?

By Michelle D. Alderson

According to the Environmental Protection Agency (EPA) (http://www.epa.gov), in 2006, the U.S. produced more than 251 million tons of garbage -- approximately 4.6 pounds of waste per person per day. Of that, recycling diverted 82 million tons of material away from disposal. In short, Americans are putting plastics into their recycling bins.

Many of us recycle without knowing if something is actually recyclable. Have you ever wondered what those numbers mean on plastic bottles? Below we explain what the seven different codes found on plastics mean and what they are recycled into. Check to see which plastics are accepted in your city; every city has different curbside recycling programs.

1. Polyethylene Terephtalate (PET, PETE): PET is a clear plastic found in soft drinks, water, juice, sports drinks, and condiments bottles; food jars for such products as peanut butter and jelly; and in frozen food packaging.

PET is recycled into fiber for carpets, clothing, and tote bags. It can also be re-used for food and beverage bottles. PET is the most common-used plastic due to its inexpensive and easy-to-recycle features, and is widely accepted by most curbside recycling programs.

2. High Density Polyethylene (HDPE): HDPE is resistant to most solvents and is used for food products with a shorter shelf life such as bottled milk. Because it's more chemical-resistant than PET, it's also used for household cleaners including laundry detergent, shampoo, and plastic grocery bags.

HDPE is recycled into bottling for non-food items, such as motor oil and antifreeze, plastic lumber, flowerpots, and recycling bins. It's accepted by most curbside recycling programs.

3. Polyvinyl Chloride (PVC, Vinyl): You won't find this recycling symbol on household items. PVC is chemical-resistant so it's used to make packaging products, shrink-wrap, window frames, fencing, and decking. PVC is recycled into pipes, fencing, decking, floor tiles, traffic cones, garden hoses, and packaging products. It's not commonly accepted by curbside recycling programs.

4. Low Density Polyethylene (LDPE): A tougher and more flexible plastic, LDPE is used for dry cleaning bags, newspapers, breads, frozen food, shrink-wrap, container lids for hot and cold beverages, and toys. It's most common use is for plastic shopping bags.

LDPE is recycled into envelopes, garbage can liners, trashcans, paneling, and floor tile. LPDE is not commonly accepted by curbside recycling programs, but plastic bags are now readily accepted at supermarkets.

5. Polypropylene (PP): PP is also strong and chemical-resistant, which is good for hot-fill liquids. It's used for takeout food, yogurts, margarine, and bottle caps.

PP is recycled into automobile parts, such as turn signal lights; brooms; bicycle racks; and trays. Some recycling curbside recycling programs accept PP.

6. Polystyrene (PS): PS is more versatile than the other plastics and is used in many food items such as cutlery, plates, cups, and containers. It's also used for those pesky packing peanuts, as well as foam packaging for electronics and furniture.

PS is recycled into mouldings, thermometers, and license plate frames. Some recycling curbside recycling programs accept PS.

7. Other: An item with this marking means that it is made with a different resin other than the six listed above. These items can include oven-baking bags, some juice and ketchup bottles, and packaging materials. It's recycled into bottles and plastic lumber and is not commonly accepted by curbside recycling programs.

For more info: http://www.americanchemistrycouncil.com

From the Maui News.

Crushers have been silenced, but hundreds of tons leave island By EDWIN TANJI, City Editor

More than 1,000 tons of redeemable glass and similar kinds of bottles have been shipped out of Maui to be remanufactured since the state imposed a new standard for handling bottles in the HI-5 redemption program.

Roger Yamagata with Maui Disposal said the company ships out between 20 and 30 containers a month, while Tom Reed of Aloha Glass Recycling said his company shipped out 20 containers over five weeks. Each container is loaded with 20 to 22 tons of glass.

Both are still handling glass beverage containers, paying consumers the 5-cent redemption value for each container. In turn, the state is paying the businesses 4 cents for each glass container shipped to a Mainland processor. It's meant an increase in effort for handling glass, Yamagata said.

Like Aloha Glass, Maui Disposal had begun crushing glass for reuse on the island, he said. But the crusher has been shut down while the company focuses on preparing glass containers for shipping to Mainland companies that remanufacture the glass.

Maui Disposal handles the glass recycling bins at county drop-box centers but now needs to remove some of the glasslike products that are mixed in with the bottles.

"When it's shipped to the Mainland, it's reused instead of recycled. What we have to be careful of is the removal of ceramic plates and window glass. That is a different kind of material and it can't be remanufactured in the same way," he said.

As it is, he said, Maui Disposal has to "ground sort" the glass products to remove contaminants. The work was described as hazardous, with crews having to pick out glass products by hand from a mass of intact and broken bottles.

Yamagata said the market for crushed glass in Hawaii is difficult to access. State law requires road-paving companies to accept crushed glass as an alternative to gravel, when the material is available. But Yamagata said there were strict standards that the glass supplier had to follow.

"The process to get to the end user is difficult and the timing of it becomes a problem. And when the Department of Health increased the handling fee to ship the glass off island, we found it more economically feasible to ship it," he said.

At Aloha Glass, the Health Department decision to encourage redemption handlers to ship out the bottles led the company to shut down its crusher and take only container glass. The Health Department decision reduced the handling fee to 2 cents if the bottles remained on Maui as crushed glass.

"The window glass and dishes we used to take was such a small part of what we handled and the foundry operation that takes the glass bottles can't use the other material," Reed said.

Aloha Glass is handling redeemable beverage containers by the ton and will accept wine bottles, pickle jars, jelly jars and other kinds of glass food containers that can be remanufactured into other glass products. "But no window glass and no broken dishes," Reed said.

While contractors can still dump broken windows at a contractors landfill, the other materials are going into the county landfill. While Reed said it represented only a small part of the materials Aloha Glass previously was turning into crushed glass, it can be a significant amount of waste materials.

"When we were taking glass from the cruise ships, it seemed like a couple of tons of broken dishes were unloaded every time they came into Kahului," he said. Both Reed and Yamagata said they are not able to sort the glass containers by color, which can help to increase the resale value for remanufacturing.

According to www.recycle.net, the average price for clear glass is $24 a ton for a truckload, while mixed glass is $4.50. Yamagata said his company has limited space to handle the materials. On the Mainland, companies are using optical scanners to separate glass materials, but the cost of hundreds of thousands of dollars is so high "there's not enough glass on Maui to justify that kind of technology."

Maui Disposal, Aloha Glass and Reynolds Recycling are the primary operators handling beverage containers from a dozen redemption centers on Maui. Several independent businesses - Aloha Shell in Kahului, Hasegawa General Store in Hana, Zitro Recycling in Kihei and Lahaina International Market - also are redeeming containers. Information on the HI-5 program and redemption centers can be found online at hi5deposit.com.

The Maui News November 12, 2008  

Study: Maui's emissions top rate of growth 'Global Warming Solutions Act' will require reductions to 1990 levels HONOLULU -

A 2007 state law requiring limits on businesses, systems and devices that produce greenhouse gases may have its heaviest impact on the Maui, which is estimated to have the largest increase in production of greenhouse gases since 1990.

The law, Hawaii Revised Statutes 342B or Act 234, will allow the state health director to impose fees on emitters of greenhouse gases, with a goal of getting emissions in the state down to 1990 levels by 2020. As a first step, the Department of Business, Economic Development & Tourism must determine what the levels of greenhouse gases are now and what they were in 1990.  The inventory of the gases is referred to as GHG for greenhouses gases, but primarily carbon dioxide.

Maui is likely to be the most affected island because preliminary figures show an 81 percent increase in GHG emissions took place on the Valley Isle, well ahead of the other Neighbor Islands. GHG are measured in the equivalent in carbon dioxide. DBEDT calculates that total emissions rose only slightly from 1990 to 2007 - from 19.77 million metric tons of carbon dioxide or equivalent gases to 20.40 mmt. Oahu output dropped from 18.12 million metric tons in 1990 to 16.39 mmt in 2007. The Neighbor Islands all rose, and Maui County surpassed the more populous Big Island. The estimates of the changes from 1990 to 2007 are Hawaii County, from 2.02 mmt to 2.78 mmt; Maui County from 1.60 mmt to 2.88 mmt (Maui island from 1.45 mmt to 2.63 mmt); and Kauai 0.69 mmt to 1.10 mmt.

Not surprisingly, the largest source of GHG is transportation, although emissions levels are down from 12.53 mmt in 1990 to 11.5 mmt in 2007. Emissions from electric power generation are up, from 6.89 mmt in 1990 to 7.36 mmt in 2007, according to the draft report. Maui island's growth in emissions were from energy uses, including transportation and electric power, from 1.22 mmt in 1990 to 2.3 mmt in 2007; from waste handling, including landfills and wastewater treatment, from 0.05 mmt to 0.13 mmt; and form industrial processing, from 0.01 mmt to 0.07 mmt.

At Thursday's hearing at the Capitol, there will be presentations on the law's provisions for monitoring, a permitting system and penalties to be imposed on producers of GHG, including autos. Act 234 establishes a GHG emissions reductions task force that will propose regulations for "the maximum practically and technically feasible and cost-effective reductions." The law specifies that "cost-effective" means least cost per unit of gas eliminated, not other costs. The task force will have 10 members, only four of whom will be from "affected business sectors," which are electric utilities, refineries, ground transportation and maritime business. The regulatory plan must be submitted by Dec. 31, 2009. These will include "all verifiable and enforceable voluntary actions" and "market-based compliance mechanisms," with mandatory emissions reporting.

Although the statute does not use the words "cap-and-trade," that is what it means. Sources that want to emit gases would have to compete with each other to buy rights. The law also calls for a "schedule of fees to be paid by the sources," apparently a penalty for excessive emissions that will go into a Clean Air Special Fund. The proposals are to be debated in the 2010 Legislature and by the end of 2011 the health director will adopt rules to implement the law. Mandatory reporting is to begin in 2012. The Legislature appropriated $1 million for administering the act in the current and next fiscal years. For information on the program, including a copy of the draft report, go to hawaii.gov/dbedt/info/energy/greenhouse/.

If your property is listed in Hawaii, please read and BEWARE that there are some websites out there by illegitimate entities that propose to help you

NARRATIVE SUMMARY

AND

FREQUENTLY ASKED QUESTIONS

REGARDING

ACT 137 – MORTGAGE RESCUE FRAUD PREVENTION ACT

[Wayne M. Pitluck, General Counsel]

9/16/08

Printable Version (PDF)

INTRODUCTION

Act 137, the Mortgage Rescue Fraud Prevention Act (“the Act”), was passed by the legislature this past session, and signed into law by the Governor on June 3, 2008.  The purpose of the Act was “to protect Hawaii consumers from persons who prey on homeowners who face property foreclosures, liens, or encumbrances.”

The Act seeks to fulfill its purpose by:   (1) establishing definitions for a new and special kind of residential real estate transaction to be called a “Distressed Property Conveyance”, and (2) establishing notice and disclosure obligations and other restrictions on all such transactions.  Although the purpose of the Act was clearly to address scams and fraudulent schemes by persons with a criminal intent, the broad language of the Act cuts across a large number of legitimate transactions in the current market.

For that reason, it is essential that every real estate licensee familiarize himself or herself with the Act, and that every Brokerage Firm develop a clear policy for dealing with the Act, and provide education for their associates.  HAR is providing this narrative summary and list of FAQs to assist in that regard.  However, every Brokerage Firm is strongly advised to seek Hawaii legal counsel to advise how best to reduce the risk of violation of the Act.

[IMPORTANT NOTE:  This Narrative Summary and Frequently Asked Questions replaces any and all information related to Act 137 previously published on this web site, with the exception of the newly published Distressed Property addenda and the introductory notice published with such forms.  All such previously published information should be disregarded.  Similarly, any publications of NAR or any other mainland resource dealing with either short sales or distressed property transactions should not be used without consulting with Hawaii legal counsel, due to the fact that such publications may not be in compliance with Act 137.]

THE ACT

The New Defined Terms

The Act defines new and important terms, without knowledge of which, one cannot hope to interpret the Act:

The term “Distressed Property” is defined as any residential real property that:

1. Is in foreclosure or at risk of foreclosure because payment of any loan that is secured by the residential real property is more than sixty days delinquent;
2. Had a lien or encumbrance charged against it because of nonpayment of any taxes, lease assessments, association fees, or maintenance fees;
3. Is at risk of having a lien or encumbrance charged against it because the payment of any taxes, lease assessments, association fees, or maintenance fees are more than ninety days delinquent;
4. Secures a loan for which a notice of default has been given; or
5. Secures a loan that has been accelerated.

The term “Distressed Property Consultant” is defined as any person who performs or makes any solicitation, representation, or offer to perform any of the following relating to a Distressed Property:

1. Stop or postpone the foreclosure sale or loss of any Distressed Property due to the nonpayment of any loan that is secured by the Distressed Property;
2. Stop or postpone the charging of any lien or encumbrance against any Distressed Property or eliminate any lien or encumbrance charged against any Distressed Property for the nonpayment of any taxes, lease assessments, association fees, or maintenance fees;
3. Obtain any forbearance from any beneficiary or mortgagee, or relief with respect to a tax sale of the Distressed Property;
4. Assist the owner to exercise any cure of default arising under Hawaii law;
5. Obtain any extension of the period within which the owner may reinstate the owner's rights with respect to the Distressed Property;
6. Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a Distressed Property or contained in the mortgage;
7. Assist the owner in foreclosure, loan default, or post-tax sale redemption period to obtain a loan or advance of funds;
8. Avoid or ameliorate the impairment of the owner's credit resulting from the recording or filing of a notice of default or the conduct of a foreclosure sale or tax sale; or
9. Save the owner's residence from foreclosure or loss of home due to nonpayment of taxes.

The term “Distressed Property Consultant Contract” is defined as any agreement or obligation between an owner or agent of an owner of a Distressed Property and a Distressed Property Consultant.

The term “Distressed Property Conveyance” is defined as the transfer of any interest in a Distressed Property effected directly or indirectly by or through a Distressed Property Consultant.

The term “Distressed Property Conveyance Contract” is defined as any agreement or obligation affecting a Distressed Property Conveyance.

The term “Distressed Property Purchaser” is defined as any person who acquires any interest in a Distressed Property directly or indirectly through a Distressed Property Conveyance Contract.

What The Act Does

Although it is always a risk to try to summarize a statute as comprehensive and complex as this, it is safe to say that the major focus of the Act is to protect owners of Distressed Property.  In very general terms, the Act does this by requiring the following:

1. Whenever a residential real estate transaction involves a Distressed Property, as defined by the Act, any person providing any of the services described with respect to assisting the owner with any foreclosure, liens or encumbrances on the property will be considered to be a Distressed Property Consultant.  A Distressed Property Consultant cannot provide such services without entering into a separate Distressed Property Consultant Contract with the seller, the specific terms and conditions of which are set forth in the Act.  Thus, it is no longer possible for a real estate licensee (or anyone else, for that matter, unless they are specifically exempted from the Act) to assist or even coach an owner of Distressed Property with regard to lien holders, without entering into a Distressed Property Consultant Contract, which specifically defines notices that must be given, obligations and restrictions placed upon services to be rendered, and a limitation on the charges that can be made for such services.
2. Whenever a residential real estate transaction involves a Distressed Property and services provided by a Distressed Property Consultant, the transaction can only be completed using a Distressed Property Conveyance Contract, the specific terms and conditions of which are set forth in the Act.  Such specific terms and conditions include, among other things, requirements of notice, disclosures, limitations on services, and rights of cancellation.  Thus, whenever there is a Distressed Property Conveyance, any Purchase Contract then existing must be amended or replaced with a Distressed Property Conveyance Contract, or the transaction is null and void.
3. None of the provisions of the Act may be waived by the property owner.
4. Any person violating the Act shall be deemed to have engaged in an unfair or deceptive act or practice within the meaning of Section 480-2, Hawaii Revised Statutes, thereby subjecting the person to government prosecution and private civil actions for treble damages and attorneys' fees.

Frequently Asked Questions (FAQs)

1. How does the Act affect a real estate licensee?  A real estate licensee becomes affected by the Act if, at any time during the course of engaging in the marketing for, solicitation of, or the providing of services for, a residential real estate transaction, the property becomes a Distressed Property under the Act.  If that occurs, the licensee cannot perform any services related to dealing with, or coaching the owner to deal with, lien holders without entering into, and abiding by, a Distressed Property Consultant Contract.  In addition, if there is both a Distressed Property and services provided by a Distressed Property Consultant, there cannot be a conveyance of the property without a Distressed Property Conveyance Contract, the terms and conditions of which are specified by the Act.
2. How does a Brokerage Firm protect itself from inadvertently violating the Act?  You should consult with legal counsel and develop a policy to deal with this issue.  Any such policy should include (1) requiring the owner client to notify the Brokerage Firm immediately if their property becomes a Distressed Property under the Act; and (2) a determination of whether licensees associated with the Brokerage Firm are permitted to perform services of a Distressed Property Consultant.  Should the Brokerage Firm's policy not allow performance of such services, addenda to the Exclusive Right-To-Sell Listing Agreement and the Purchase Contract should be used to establish an agreement with the property owner recognizing that such services will not be provided.  [NOTE:  HAR has developed, and just published, Standard Form addenda for this purpose.]  Should the Brokerage Firm consider adopting a policy to allow such services to be performed by their associated licensees, the Brokerage Firm is strongly advised to consider all legal implications of such a policy, and only put  the policy in place with the advice of Hawaii legal counsel.  Adoption of such a policy will necessitate the development by the Brokerage Firm of a Distressed Property Consultant Contract, a Distressed Property Conveyance Contract, and policies and other forms connected therewith.
3. Does every residential sale transaction involving a Distressed Property require a Distressed Property Conveyance Contract?  According to the language of the Act, a Distressed Property Conveyance requiring a Distressed Property Conveyance Contract only exists where there is a Distressed Property and someone (the real estate licensee or anyone else) is providing the services of a Distressed Property Consultant.  Thus, if there is a Distressed Property, but no Distressed Property Consultant, there is no need for a Distressed Property Conveyance Contract.
4. Should a Brokerage Firm put a Distressed Property Addendum on every Exclusive Right-To Sell Listing Agreement?  That is a matter for determination by the Brokerage Firm.  Such a policy might be governed, in part, by a determination that a property being listed with no liens or encumbrances or only small liens or encumbrances may not be subject to becoming a Distressed Property.  However, the Brokerage Firm should be aware that a Distressed Property can be created if the Property is at risk of having a lien or encumbrance charged against it because the payment of any taxes, lease assessments, association fees, or maintenance fees are more than 90 days delinquent, even if such charges are in dispute.
5. Are all short sale transactions subject to the Act?  No.  The Act only covers those short sale transactions which involve a property which falls within the definition of a Distressed Property under the Act.
6. Are there any services that a Brokerage Firm can perform to help a seller of a Distressed Property with his or her lien holders?  Any services of any kind which would involve communication with the lien holder can arguably fall within the Act.  In addition, the language of the Act is so broad as to prevent any advice or “coaching” for a seller of a Distressed Property who wants to personally deal with the lien holder.

link to the FULL Act 137 

http://www.hawaiirealtors.com/download/GM779.pdf