A real estate agent is vital to the home buying process and can provide a variety of

services in locating a property, negotiating the sale, and advising the buyer. A real estate

agent is generally not qualified to discover defects or evaluate the physical condition of

property; however, a real estate agent can assist a buyer in finding qualified inspectors

and provide the buyer with documents and other resources containing vital information

about a prospective new home.

This advisory is designed to make a buyer’s home purchase as smooth as possible.

Some of the more common issues that a buyer may decide to investigate or verify

concerning a home purchase are summarized in this Advisory. Included in this Advisory

are: (1) common documents a buyer should review; (2) physical conditions in the

property the buyer should investigate; and (3) conditions affecting the surrounding area

that the buyer should investigate. In addition, a buyer must communicate to the real

estate agents in the transaction any special concerns the buyer may have about the

property or surrounding area, whether or not those issues are addressed in this

Advisory.

A listing is an agreement between the seller and the listing agent and authorizes the

listing agent to submit information to the Multiple Listing Service (“MLS”). The MLS

printout is similar to an advertisement and contains various abbreviations and symbols.

Neither the listing agreement nor the printout is a part of the purchase contract between

the buyer and seller. The printout contains a limited description of a property, such as its

size, encumbrances, utilities, amenities, etc. The information was probably secured from

the seller, the builder, or a governmental agency, and could be inaccurate, incomplete or

an approximation. Therefore, the buyer should verify any important information

contained in the MLS.

This statement is required to be given to buyers by the subdivider of a subdivision and

should be read before signing any contract to purchase a new home or land. The

purpose of this document is to point out material information about the development that

a buyer might want to know when making a decision to purchase. The Public Offering

Statement is prepared by the subdivider, could be inaccurate, and should be verified.

Additional information about the Public Offering Statement may be found by contacting

the Hawaii Department of Commerce and Consumer Affairs:

http://www.hawaii.gov/dcca/

Under Hawaii law, a seller is obligated to fully and accurately disclose in writing to a

Buyer any fact, defect or condition, past or present, that would be expected to

measurably affect the value of the property to a reasonable person. This statement is

intended to provide the Buyer with notice concerning the condition of the property and to

assist the buyer in evaluating the property. The buyer should read the seller’s real

property disclosure statement and check every item on it. Ask to see receipts for repairs

to the home. Look behind large pictures on the wall and behind anything on the floor that

conceals large areas.

Look for stains on the ceilings or carpets that might indicate water damage. Read the

Deposit Receipt Offer and Acceptance (DROA) carefully to determine the deadlines for

examining the statement and rescinding the DROA; or for having your own inspections

conducted.

Remember, your review of the Seller’s Real Property Disclosure Statement is not a

substitute for professional inspections.

Usually the appraisal is ordered through the buyer’s lender and is delivered directly to

the lender by the appraiser. Aside from estimating the value of the property the appraisal

may indicate various conditions that could affect the value of the property. If the buyer

pays for an appraisal of the property the buyer has the right to receive a copy of the

appraisal.

Appraisers are regulated by the Hawaii Department of Commerce and Consumer Affairs.

http://www.hawaii.gov/dcca/pvl/areas_real_estate_appraiser.html

The CC&Rs or Deed Restrictions are recorded against the property and generally

empower a former owner, developer or homeowner’s association to control certain

aspects of property use. By purchasing a property the buyer agrees to be bound by the

CC&Rs. Thus, the CC&Rs form an enforceable contract. The association, the

homeowners as a whole, and individual homeowners can enforce the contract. It is

essential that the buyer review and agree to these restrictions prior to purchasing a

home.

You might find some of the CC&Rs are very strict, especially those addressing

landscaping, RV parking, play equipment, satellite antennas, and other common

amenities — particularly if the subdivision is governed by a homeowner organization. A

short but informative document on the purpose and effect of CC&Rs may be read at

uncertain of the application of particular provisions in the CC&Rs.

In addition to CC&Rs, Homeowner Organizations may be governed by Articles of

Incorporation, Bylaws, Rules and Regulations, and often architectural control standards.

The Homeowner Organization is in place to enforce these rules and to preserve the

value of homes in the condominium or planned community. Condominium and planned

community Homeowner Organizations are also regulated by Hawaii statutes.

What makes a development a condominium or planned community? Common area, that

is, community ownership of real estate for use by community residents, is the common

denominator.

In a condominium, the common property is actually deeded as undivided interests to the

condominium owners. In a planned community, the ownership of the common property

vests in the homeowner’s association. If you have questions about your rights and

remedies regarding homeowner’s associations or community associations, please read

If purchasing a home governed by a Homeowners Organization the buyer should review

and approve the Homeowner Organization documents. The Deposit Receipt Offer and

Acceptance (DROA) contains a contingency in which the buyer can request these

documents.

The title report or commitment contains important information and is provided to the

buyer by the title/escrow company or agent. This report or commitment lists documents

that are exceptions to the title insurance (Schedule B Exceptions). Schedule B

Exceptions may include encumbrances, easements, and liens against the property,

some of which may affect the use of the property, such as a future addition or swimming

pool. Make sure you receive and review all of the listed documents.

Questions about the title commitment and Schedule B documents may be answered by

the title or escrow officer, legal counsel, or a surveyor. General information regarding

title/escrow company employed in the transaction.

A home warranty may be part of the sale of the home. Buyers should read the home

warranty document for coverage and limitation information. Be aware that pre-existing

property conditions are generally not covered under these policies.

If the home was built prior to 1978, the seller must provide the buyer with a lead-based

paint disclosure form. More information about lead-based paint may be obtained at:

http://www.hud.gov/offices/lead/

The county assessor’s records contain a variety of valuable information including the

assessed value of the property for tax purposes and some of the physical aspects of the

property, such as the reported square footage (which should always be verified for

accuracy). Information is available on county websites:

For the buyer’s protection, the importance of having a home inspected by a professional

home inspector cannot be over-emphasized. A home inspection is a visual physical

examination, performed for a fee, designed to identify material defects in the home. The

home inspector will generally provide the buyer with a report detailing information about

the home’s condition. The inspector and the report will point out existing problems and

possible potential problems. The buyer should carefully review this report with the

inspector and ask the inspector about any item of concern. Pay attention to the scope of

the inspection and any portions of the property excluded from the inspection.

Additional information on inspections may be found at the American Society of Home

http://www.homeinspections-usa.com/main/insp/home_inspection_organizations/Hawaii

Termites are commonly found throughout Hawaii. Investigating evidence of termites or

other wood infestation is the job of the pest control operator. The Hawaii Department of

Commerce and Consumer Affairs regulates these inspectors.

http://www.hawaii.gov/dcca/pvl/areas_pest_control_faq.html

Free literature about termites in Hawaii is available through the University of Hawaii at

The seller may have made repairs or added a room to the property. For example, the

property may have an obvious improvement, or a lanai or garage may have been

remodeled. The buyer should feel comfortable that the work was properly done or have

an expert evaluate the work. Request copies of any invoices or other documentation

regarding the work performed. The Hawaii Department of Commerce and Consumer

Affairs is the agency responsible for licensing contractors. To determine if a contractor is

licensed or has any complaints against them go to:

http://www.hawaii.gov/dcca/rico/index.html

For information regarding permits, contact the city or county building department.

The home inspector might recommend that you have the roof further inspected by a

licensed roofer. If the roof is 10 years old or older, a roof inspection by a licensed roofer

is highly recommended.

If the home has a pool or a spa, the home inspector might determine that the cleaning

system is not working properly or may exclude the pool or spa from the general

inspection. It would then be necessary to have a pool or spa company inspect the pool

or spa and/or evaluate any problem.

In Hawaii, approximately sixty-one (61) persons - residents, military, and visitors - drown

each year [with an average of thirty-six (36) residents drowning per year] according to

the Hawaii Dept. of Health. Learn more about pool and ocean safety at:

http://www.aloha.com/~lifeguards/kipc.html

Square footage on the MLS printout, an Internet listing or as listed by the county

assessor’s tax records is often only an estimate and generally should not be relied upon

for the exact square footage in a home. An appraiser or architect can measure the

home’s size to verify the square footage.

Contact the Hawaii Department of Commerce and Consumer Affairs

For information about licensed appraisers;

http://www.hawaii.gov/dcca/pvl/areas_real_estate_appraiser.html

And for information about licensed architects;

http://www.hawaii.gov/dcca/pvl/areas_engineer.html

Even if the listing or Seller’s Real Property Disclosure Statement indicates that the home

is connected to the sewer, the connection should be verified by a plumber, home

inspector, or other professional.

The Wastewater Branch of the Hawaii Dept. of Health administers the statewide

engineering and financial functions relating to water pollution control, municipal and

private wastewater treatment works program, individual wastewater systems program

and the water pollution control revolving fund program. The various program activities

include the review and approval of all new wastewater systems including septic tanks

and monitoring of all existing wastewater systems including cesspools. The Wastewater

Branch consists of three sections: the Planning/Design, Construction/Operations, and

the Grants Management Sections. A Hawaii DOH publication on individual wastewater

and lists of wastewater companies can be found at

http://www.hawaii.gov/dcca/dca/water.html

The soil in some areas of Hawaii has “clay-like” tendencies, sometimes referred to as

“expansive soil.” Although it is not very common for homes built on expansive soils to

experience significant movement, it can be a major problem if it does occur. If it has

been disclosed that the home has expansive soil or if the buyer has any concerns about

evidence of cracking, the buyer should secure an independent assessment of the home

and its structural integrity or the quality of the soil on which a home is to be built by a

licensed, bonded, and insured professional engineer.

For information about licensed engineers;

http://www.hawaii.gov/dcca/pvl/areas_engineer.html

A guide to the services of professional engineers can be found at

http://www.hawaii.gov/dcca/pdf/pvl_pamphlet2.pdf

If it is disclosed there has been a fire or flood in the property, a qualified inspector should

be hired to advise you regarding any possible future problems as a result of the fire or

flood damage and/or any subsequent repairs. For example, if the property was not

properly cleaned after a flood, mold issues may result. Your homeowner’s insurance

agent may be able to assist you in obtaining information regarding fire, flood, or other

past damage to the property.

Termites and other pests are common in parts of Hawaii. Fortunately, most pests can be

controlled with pesticides. If the buyer has any concerns or if the Seller’s Real Property

Disclosure Statement indicates problems with insects or other pests you should seek the

advice of a pest control company. For information on licensed pest control operators

contact the Hawaii Department of Commerce and Consumer Affairs

http://www.hawaii.gov/dcca/pvl/areas_pest_control.html

Free literature about termites and other pests in Hawaii is available through the

University of Hawaii at Manoa,

http://www.ctahr.hawaii.edu/ctahr2001/PIO/FreePubs/FreePubs06.asp

The Seller’s Real Property Disclosure Statement asks the seller to disclose any history

of homicides, felonies or suicides that occurred on the property but sellers may not know

of any history of these events.

This information is often difficult to uncover; however, the local law enforcement agency

may be able to assist with information relating to the property address.

Mold has always been with us, and it is a rare home that does not have some mold.

However, over the past few years a certain kind of mold has been identified as a

possible contributor to illnesses. Allergic individuals may experience symptoms related

to mold. Mold growth is found underneath materials where water has damaged surfaces,

or behind walls.

The United States Environmental Protection Agency website contains valuable

More information about mold, the problems it may cause, and how it may be removed

can be found at the Center for Disease Control

www.cdc.gov/nceh/airpollution/mold/default.htm

More information can be found at:

http://www.realtor.org/realtororg.nsf/pages/moldfaq?OpenDocument or

http://www.epa.gov/iaq/molds/moldguide.html

Radon gas and carbon monoxide poisoning are two of the more common and potentially

serious indoor air quality (“IAQ”) concerns. Both of these concerns can be addressed by

the home inspector, usually for an additional fee. As for the many other IAQ concerns,

the EPA has a host of resource materials and pamphlets available at

www.epa.gov/iaq/iaqinfo.html and www.epa.gov/iaq/pubs/index.html

The Island of Hawaii has several active and inactive volcanoes. There are times when

air quality is affected by volcanic emissions known as “Vog.” Vog may affect persons

with respiratory problems and may also affect water catchment systems if precautions

are not taken. The buyer should contact the State of Hawaii, Department of Health

http://www.state.hi.us/doh/index.html

for information about recommended precautions as well as other professionals.

In addition, the U.S. Department of the Interior, Geological Survey, has classified various

“hazard zones” for lava flows. For more information go to:

http://volcanoes.usgs.gov/Hazards/Where/WhereHaz.html#UShazards or

http://www.fema.gov/hazards/volcanoes/

The locations of such hazard zones may affect the availability, limits and costs of

property and/or liability insurance. Other affects of volcanic activity that may occur

include lava tubes and periodic earthquakes.

Property boundaries and corners are always of concern. The Hawaii Association of

REALTORS® Deposit Receipt Offer and Acceptance (DROA) contains provisions for the

seller to either stake the property corners or to provide a survey.

A survey may be advisable if there is a concern about or an obvious use of property by

others (i.e., a well-worn path across a property and/or parked cars on the property) or

fences or structures of adjacent property owners that appear to be built on the property.

The Hawaii Department of Commerce and Consumer Affairs licenses surveyors and

more information can be obtained at

http://www.hawaii.gov/dcca/pvl/areas_engineer.html

If the property is in a flood zone, an additional annual insurance premium of several

hundred dollars may be required. If the property is in an area deemed high risk, the

buyer may be required by the lender to obtain flood hazard insurance through the

National Flood Insurance Program. Some information can be found at The Federal

Emergency Management Association’s (FEMA) Flood Map Service Center:

www.fema.gov/maps or http://www.fema.gov/hazards/floods/

Coastal property owners bear tremendous risks. Their property is vulnerable to tsunamis

(tidal waves,) storm surges, floods, high wave impacts, and hurricanes. In addition,

owners along the shoreline bear the risk that their property may erode.

Check with http://www.fema.gov/rrr/talkdiz/tsunami.shtm or

http://www.fema.gov/kids/tsunami.htm for information about tsunamis.

For hurricane information go to: http://www.fema.gov/hazards/hurricanes/ or

http://www.fema.gov/kids/hurr.htm More information is available through the Hawaii

State Dept. of Health, Office of Environmental Quality Control at:

http://www.state.hi.us/health/oeqc/guidance/shoreline.htm

or the Hawaii Coastal Zone Management Program at:

http://www.hawaii.gov/dbedt/czm/program.html

Many factors affect the availability and cost of homeowner’s insurance. Depending on

the insurance company, these factors may include past insurance claims filed on the

home being purchased, past insurance claims filed by the buyer on previous homes, and

the buyer's credit score. Some insurance companies use a database known as the

Comprehensive Loss Underwriting Exchange (“C.L.U.E.”) in their underwriting practices

to track the insurance claim history of a home and of the person applying for insurance

coverage.

These companies may use such information to cancel a buyer’s homeowner’s insurance

policy after close of escrow. To reduce the risk of homeowner's insurance cancellation, a

buyer should ask their insurance agent about the company's underwriting practices and

request that their insurance agent confirm in writing the availability and cost of

homeowner’s insurance early in any real estate transaction. And, although a buyer

cannot directly obtain the claims history of a home, a buyer may ask the seller to provide

a copy. However, be aware that obtaining a claims history or C.L.U.E. report on a home

will not give a buyer all the necessary information to determine insurability, since not all

insurance companies use this information or use it in the same manner.

Homeowners may request a five year claims history from their insurance agent or

purchase a C.L.U.E. report online at

www.choicetrust.com or by calling 800/456-6004 or 866/527-2600.

For more detailed information on homeowner's insurance, please read

The New Reality of Property Insurance - What You Should Know at

http://www.realtor.org/realtororg.nsf/pages/propinsbrochure?OpenDocument

For general insurance information or to file a complaint against an insurance company,

contact the Hawaii Dept. of Commerce and Consumer Affairs, Insurance Division at:

http://www.hawaii.gov/dcca/ins/

It is often very difficult to identify environmental hazards. See the Hawaii Dept. of Health

web site at: http://www.state.hi.us/health/oeqc/index.html

Another source of environmental information may be found at:

http://consumerlawpage.com/brochure/home-haz.shtml

There are a few sites in Hawaii where the soil and groundwater have been contaminated

by improper disposal of contaminants. To check if a property is in an area designated by

the federal government as requiring cleanup, see

http://oaspub.epa.gov/webi/meta_first_new2.try_these_first or

http://www.epa.gov/superfund/sites/npl/hi.htm

More information can be found at the Hawaii Dept. of Health web site:

http://www.state.hi.us/health/oeqc/index.html

Although the existence of a freeway near the property may provide highly desirable

access, sometimes it contributes to undesirable noise. To search for roadway

construction and planning, go to the Hawaii Department of Transportation website at:

http://www.state.hi.us/dot/highways/index.htm

Crime statistics, while an imperfect measurement at best, may provide some indication

of the level of criminal activity in an area. To check the crime statistics for Hawaii go to

the Hawaii State Department of the Attorney General, Crime Prevention and Justice

Other information may be available from local police departments.

On November 21, 2001, the Hawaii Supreme Court struck down Hawaii's sex offender

registration law as unconstitutional. Eto Bani, who pleaded no contest to sexual assault

in the fourth degree contended the statute violated his constitutional right to procedural

due process, his constitutional right to privacy, prohibition against cruel and unusual

punishment, and right to equal protection of the law.

The opinion by Associate Justice Mario Ramil said Bani's right to due process was

violated: "The absence of any procedural safeguards in the public notification provision

of (the law) renders the statute unconstitutional, void and unenforceable." "These are

people who already paid a debt to society," said Brent White, legal director for the

American Civil Liberties Union. Based on the ruling, the state is no longer allowed to give

notice to the community on whether a person is a sex offender.

Information may be available through the Center for Sex Offender management at

http://www.csom.org/ref/docs.html

Some areas of Hawaii are subject to fly-overs by aircraft including commercial, military

and Drug Enforcement Agency (DEA) aircraft. The buyer should contact the appropriate

federal, state or county agencies for more information. The Hawaii Department of

Although there is no substitute for an on-site visit to the school to talk with principals and

teachers, there is a significant amount of information about Hawaii’s schools on the

www.greatschools.net/modperl/go

Information about these issues in the various counties may be found at:

Neighbors can provide a wealth of information. Buyers should always talk to the

surrounding neighbors about the neighborhood and the history of the home the buyer is

considering for purchase.

Buyers should always drive around the neighborhood, preferably on different days at

several different times of the day and evening, to investigate the surrounding area.

Kauai Board of Realtors®: http://

Molokai Board of Realtors®: http://

Hawaii Real Estate Commission (“HREC”):

http://www.hawaii.gov/hirec/

NATIONAL ASSOCIATION OF REALTORS® (“NAR”):

www.realtor.com

www.realtor.org

http://www.homestore.com/finance/buyersguide/default.asp?-&poe=homestore

For information about Hawaii Government, including links to state agency websites:

http://www.state.hi.us/

Hawaii Mandatory Seller Disclosures in Real Estate Transactions

www.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0508D/HRS_0508D-.htm

The Fair Housing Act and other federal and state laws have been enacted to guarantee

equal housing opportunities for all Americans. These laws prohibit discrimination in

housing on the basis of race, color, religion, sex, national origin, age, disability, and

familial status.

For information regarding fair housing laws, visit the following sites:

HUD’s Fair Housing/Equal Opportunity Website:

Buyer acknowledges receipt of all eleven pages of this Advisory. Buyer further

acknowledges that there may be other disclosure issues of concern not listed in this

Advisory. Buyer is responsible for making all necessary inquiries and consulting the

appropriate persons or entities prior to the purchase of any property.

The information in this Advisory is provided with the understanding that it is not intended

as legal or other professional services or advice. These materials have been prepared

for general information purposes only. The information and links contained herein may

have been changed or not be updated or revised for accuracy. If you have any additional

questions or need advice, please contact your own lawyer or other professional

representative.

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Buyer’s Signature MO/DA/YR

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Buyer’s Signature MO/DA/YR