How a Buyer May Legally Cancel a New Condo Sale

How a Buyer May Legally Cancel a New Condo Sale

            A purchaser of a condominium unit from a developer may cancel a sales contract at any time up to midnight of the thirtieth day after: (1) the date that the purchaser signs the sales contract; and (2) developer has delivered to the prospective purchaser: (a) a true copy of the developer's public report, including all amendments with an effective date issued by the Real Estate Commission of the State of Hawaii (the "Commission"), the project's recorded declaration and bylaws, house rules, if any, and the project's condominium map, and all amendments thereto; and (b) a notice of the prospective purchaser's thirty-day cancellation right on a form prescribed by the Commission, upon which the prospective purchaser may indicate that the purchaser has had an opportunity to read the developer's public report, understands the developer's public report, and exercises the right to cancel or waives the right to cancel.  HRS § 514B-86(b).

 Delivery shall be made by: (1) personal delivery; (2) registered or certified mail with adequate postage to the recipient's address; provided that delivery shall be considered made three days after deposit in the mail or any earlier date upon which the return receipt is signed; (3) facsimile transmission, if the recipient has provided a fax number to the sender; provided that delivery shall be considered made upon the sender's receipt of automatic confirmation of transmission; or (4) any other way prescribed by the Commission.  HRS § 514B-88. 

            The Commission, at its March 24, 2023 meeting, voted in favor of issuing an informal non-binding interpretation that, pursuant to HRS § 514B-88(4), email is an acceptable method for the delivery and return of the Notice of Right to Cancel Sales Contract (the "Notice").  The Commission noted that allowing delivery and return of the Notice via email is on par with how real estate is currently being conducted.  Accordingly, the Commission has since updated its form of the Notice available on the Commission's website to include the option of returning the Notice to the developer by emailing the Notice to an email address provided by the developer

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