Dedicating property for residential use

(a) For the purposes of this section, the following definitions apply unless the context clearly indicates or requires a different meaning. Apartment Building. A multi-unit dwelling that is situated on a single parcel, which parcel is not subdivided into condominium units. Condominium Parking Unit. A unit that is a part of a condominium property regime established pursuant to the State Condominium Property Act described as a parking stall. Condominium Storage Unit. A unit that is a part of a condominium property regime established pursuant to the State Condominium Property Act described as a storage space. Condominium Unit. A dwelling or lodging unit that is part of a condominium property regime established pursuant to the State Condominium Property Act. Dwelling Unit. Has the same meaning as defined in § 21-10.1 . Lodging Unit. Has the same meaning as defined in § 21-10.1 . Multi-Unit Dwelling. Has the same meaning as defined in § 21-10.1 , which is not a hotel. Owner. A person who is the fee simple owner of real property, or who is the lessee of real property whose lease term extends at least five years from the date of the petition. Residential Use. The actual use of a dwelling unit or lodging unit as a residence: (1) By occupants for compensation for periods of 90 or more consecutive days; (2) By the unit owner personally; or (3) By the unit owner’s guests without compensation. For the purposes of this definition, compensation includes but is not limited to monetary payment, services or labor of employees. Residential use specifically excludes the use of the unit as a transient vacation unit or timeshare. For the purposes of this dedication, residential use shall include the use of the dwelling unit for large and small group living. (b) The owner of a parcel may dedicate the parcel for residential use and have the property classified as residential and assessed at its value in residential use; provided that the property: (1) Is within an apartment, apartment mixed-use, resort, business, business mixed-use, industrial, or industrial mixed-use zoning districts; or if it is in the Waikiki special district, is zoned apartment mixed-use subprecinct, resort mixed-use precinct, or resort-commercial precinct; or is in a transit-oriented development special district pursuant to § 21-9.100 ; (2) Is used exclusively for residential use, except that a portion of the property may be used for nonprofit purposes pursuant to § 8-10.9 ; and (3) (A) Is improved with one or more dwelling units as defined in § 21-10.1 , or with one or more apartment buildings, or with both dwelling units and apartment buildings; or (B) Is a condominium unit that is legally permitted for multiple uses including residential use and is actually and exclusively used as a residence, or a condominium parking unit or a condominium storage unit that is used in conjunction with a unit in residential use within the project. (c) The owner of real property who wishes to dedicate such property for residential use and have the property assessed at its value in residential use according to subsection (b) shall petition the director and declare in such petition that if the petition is approved, the owner shall meet the applicable requirements of subsection (b) pertaining to the property. (d) The approval of the petition by the director to dedicate constitutes a forfeiture on the part of the owner of any right to change the use of such person’s property for a minimum period of five years, automatically renewable thereafter for additional periods of five years subject to cancellation by either the owner or the director. Cancellation of the dedication by the owner must be in writing and submitted to the director by September 1 only within the fifth year of the date of the dedication, or the latest five-year renewal period. Upon sale or transfer of the dedicated property, the dedication will continue for the remainder of the five- year dedication or latest five-year renewal subject to all restrictions and penalties. Upon expiration of the fifth year, the dedication will not automatically renew and will be canceled by the director. For the purpose of this dedication, there is no change in use if the owner demolishes and constructs or reconstructs one or more dwelling units or multi-unit dwellings; provided that such construction or reconstruction is permitted pursuant to Chapter 21 , the replacement structure or structures are completed no less than 24 months after the building permit is issued, and at least the same number of dwelling or lodging units as those demolished are developed. The five-year dedication will be suspended during this period of demolition and construction or reconstruction, and the parcel and any improvements thereon will continue to be classified and assessed at their value in residential use during the suspension. (e) (1) Failure of the owner to observe the restrictions on the use of such person’s property shall cancel the dedication retroactive to the tax year preceding the tax year in which the breach of the dedication occurs, and all differences in the amount of taxes that were paid and those that would have been due from assessment in the higher use shall be payable with a 10 percent per year penalty retroactive to the tax year preceding the tax year in which the breach of the dedication occurs. Any assessment under Chapter 28 , levied upon a special improvement district noted in Appendix 28-A , that would have been due but for the dedication shall also be due and payable along with applicable penalties and interest, retroactive to the tax year preceding the tax year in which the breach of the dedication occurs. Failure to observe the restrictions on the use means failure for a period of over 12 consecutive months to use the property in the manner requested in the petition or the overt act of changing the use for any period. Nothing in this subsection shall preclude the county from pursuing any other remedy to enforce the covenant on the use of the property. (2) The additional taxes and penalties, due and owing as a result of failure to observe the restrictions on use or any other breach of the dedication shall be a paramount lien upon the property as provided for by this chapter. Any special assessment under Chapter 28 , due and owing as a result of failure to observe the restrictions on use or any other breach of the dedication shall be a lien against the land and improvements of the parcel of land in accordance with § 28-3.5 . (f) The director shall prescribe the form of the petition. The petition shall be filed with the director by September 1 of any calendar year. The notice of assessment shall serve as notification of approval or disapproval of the petition for dedication. If the petition is approved, the assessment based upon the use requested in the dedication shall be effective as of October 1 of the same calendar year. (g) The owner may appeal any disapproved petition as in the case of an appeal from an assessment. )