Enforceability Status
Hawaii does not have a specific statute addressing monthly payment suppression in builder marketing. Hawaii's Unfair and Deceptive Acts or Practices statute (UDAP) provides a framework for challenging misleading business practices. Hawaii's unique property tax system, high insurance costs, and mandatory maintenance fees in many developments make payment suppression a significant concern.
Legal Analysis
Monthly payment suppression in Hawaii is particularly impactful because of the state's high costs of living. In addition to property taxes, buyers in Hawaii often face maintenance fees, community association fees, and high homeowners insurance costs that can substantially exceed amounts common on the mainland. Hurricane and flood insurance may also be required in certain areas.
Hawaii's Unfair and Deceptive Acts or Practices statute, HRS Section 480-2, prohibits unfair or deceptive acts or practices in the conduct of any trade or commerce. This statute has been interpreted broadly by Hawaii courts. A builder advertising a monthly payment that omits substantial recurring costs could face liability under this statute.
Hawaii's property tax system is administered at the county level, with each of the four counties (Honolulu, Maui, Hawaii, Kauai) setting its own rates and exemptions. Property taxes include different rates for owner-occupied versus non-owner-occupied residences. Honolulu, for example, provides a homeowner's exemption under the Revised Ordinances of Honolulu Chapter 8.
Hawaii's condominium and community association laws under HRS Chapter 514B (Condominium Property Act) and HRS Chapter 421J (Planned Community Associations) require disclosure of association fees and assessments, but these disclosures typically occur at the contract stage rather than during initial marketing.
Federal TILA and RESPA requirements apply to lender disclosures but do not directly regulate builder marketing materials.
Relevant Hawaii Law
Prohibits unfair or deceptive acts or practices in trade or commerce. Broadly interpreted with strong remedies including treble damages.
Governs condominium associations and requires disclosure of association fees and assessments to prospective buyers.
Governs planned community associations and requires disclosure of association obligations to prospective buyers.
Federal law requiring creditors to disclose credit terms when advertising credit. Applies primarily to creditors rather than home builders.
Builders in Hawaii Using This Clause
What Hawaii Buyers Should Know
- Ask about all recurring fees Hawaii developments frequently have maintenance fees, community association fees, and other recurring charges. Ask the builder for a complete list of all monthly and annual fees associated with the property.
- Verify the applicable property tax rate Hawaii property tax rates differ by county and by property classification (owner-occupied versus non-owner-occupied). Confirm the correct rate and any homeowner's exemption applicable to your situation.
- Determine insurance requirements Hawaii properties may require hurricane insurance, flood insurance, or both in addition to standard homeowners insurance. Ask the builder for estimated insurance costs and confirm whether these are included in any advertised payment.
- Request a total monthly cost breakdown Before signing a purchase agreement, obtain a written breakdown including principal, interest, property taxes, all association and maintenance fees, homeowners insurance, hurricane and flood insurance if applicable, and any other recurring fees.