New Dept. of Planning and Permitting Condominium Conversion Rules

New Dept. of Planning and Permitting Condominium Conversion Rules

Condominium developers should be aware of the new rules that the Department of Planning and Permitting of the City and County of Honolulu ("DPP") has implemented for converting existing structures to condominium status in the City and County of Honolulu ("City").

Under Section 514B-84(a)(2) of the Hawaii Revised Statutes, a developer's public report for a condominium project containing any existing structures being converted to condominium status must contain a verified statement signed by an appropriate county official that: (A) the structures are in compliance with all zoning and building ordinances and codes applicable to the project at the time it was built, and specifying, if applicable: (i) any variances or other permits that have been granted to achieve compliance; (ii) whether the project contains any legal nonconforming uses or structures as a result of the adoption or amendment of any ordinances or codes; and (iii) any violations of current zoning or building ordinances or codes and the conditions required to bring the structure into compliance; or (B) based on the available information, the county official cannot make a determination with respect to matters described in clause (A).

Customarily, in the City, to obtain this "Verified Statement," a condominium developer would send a letter to the DPP requesting the Verified Statement, accompanied by the condominium conversion inspection fees ($300 per parcel). The DPP would then assign an inspector to review the DPP's records relating to the existing structures, conduct an on-site inspection, and allow the developer to remedy any violations found during the inspection before issuing the Verified Statement.

The DPP, however, has recently implemented new "Procedures and Documentation Necessary to Obtain a CPR Clearance," effective July 11, 2022, setting forth additional requirements and procedures ("New Condo Conversion Rules"). Below is a summary of the changes to the requirements and procedures for obtaining a Verified Statement from the DPP under the New Condo Conversion Rules.

Increase in Fees: The non-refundable inspection fees have been increased to $500 per parcel, and in all zoning districts other than residential, there is an additional fee of $50 per unit or structure. Additionally, as discussed below, developers will need to pay additional fees for the Zoning Verification application.

New Zoning Verification Requirement: Developers now need to complete a Zoning Verification prior to requesting the Verified Statement. The Zoning Verification application form can be found here, and costs $300 per TMK if requesting a confirmation of legality (i.e., conforming or nonconforming).

New Required Submittals: Developers also now need to include with their request for a Verified Statement the following items ("Required Submittals"):

1. Payment of the inspection fees;
2. One (1) scaled and detailed site plan survey on 24"x36" (minimum) sized paper;
3. One (1) scaled and detailed floor plan(s) of area(s) to be inspected on 24"x36"(minimum) sized paper;A draft condominium map and all other supporting maps;
4. The completed Zoning Verification;
5. A notarized letter of authorization from the fee owner(s); and
6. A verification letter from the fee owner(s) that the property pins are easily visible and accessible.

New On-Site Inspection Procedures: The New Condo Conversion Rules set forth the following procedures and rules for the on-site inspection:

• Once all of the Required Submittals have been received, reviewed, and verified as complete by the DPP, a DPP inspector will call the owner with an on-site inspection time. If the owner is not available, the inspection time will be adjusted at the discretion of the inspector.
• All structures and property pins must be accessible and easily visible for inspection and verification.
• Any zoning, permitting, or use issues must be resolved prior to the On-site inspection.
• If the DPP's inspection identifies any violations with the property, a Notice of Violation ("NOV") will be issued, a certification inspection report will be issued, the file will be closed, and the owner will need to reapply (and pay the inspection fees again) for the Verified Statement after satisfying the NOV(s).

With these new procedures in place, developers should take extra care to ensure that there are not any zoning, permitting, or use issues existing with the property before submitting a request for a Verified Statement. Any issues that may slip through the cracks could require the developer to re-start the Verified Statement process, thereby losing valuable time in the development process.