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Oahu Real Estate Owners Face Delayed Transactions Due to Property Record Errors

·10 min read·⚡ Act Now

Executive Summary

Inaccurate property records for bedrooms, lot size, or square footage are causing significant delays and complications for Oahu real estate transactions. Property owners should proactively verify and correct their records to avoid transaction impediments.

  • Real Estate Owners: Potential delays in sales, refinancing, and insurance claims; increased legal or administrative costs to correct errors.
  • Banks/Lenders: Increased risk and processing time for mortgages.
  • Title Companies: Higher operational burden due to the need for more thorough record verification.
  • Action: Initiate property record correction process immediately if any discrepancies are identified.

Action Required

High PriorityImmediate action recommended to initiate correction process

An incorrect property record can lead to significant complications in sales, refinancing, or insurance claims if not addressed promptly.

If you are a real estate owner planning to sell or refinance your Oahu property within the next 90 days, or if you discover any discrepancy in your property record, you should initiate the correction process with the Honolulu Department of Real Property Assessment (RPA) immediately. This involves verifying your property details online and contacting the RPA with supporting documentation. Failing to do so could lead to significant transaction delays, potential loss of buyers, or inability to close on financing, costing you time and money.

Who's Affected
Real Estate Owners
Ripple Effects
  • →Inaccurate property records → prolonged transaction closing times → reduced real estate liquidity → slower housing development → increased housing affordability challenges.
  • →Transaction delays and increased correction costs → reduced confidence for potential buyers and lenders → decreased investment in Oahu real estate.
  • →Difficulty in obtaining accurate property data → challenges for insurance providers → potential underinsurance for property owners in case of claims.
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Oahu Real Estate Owners Face Delayed Transactions Due to Property Record Errors

Inaccurate property records on Oahu are creating significant hurdles for real estate owners, leading to potential delays in sales, refinancing, and insurance claims. The City & County of Honolulu's property records, managed by the Honolulu Department of Real Property Assessment (RPA), are the official source of property data. When this data contains errors, such as an incorrect number of bedrooms or incorrect lot dimensions, it necessitates a formal correction process that can impact transaction timelines and costs.

The Change

While not a new policy, the process for correcting property records on Oahu is often underestimated in its complexity and timeline. Errors in the official property record, which is used by the Department of Real Property Assessment (RPA) for tax assessment purposes, can arise from initial property surveys, subsequent renovations that were not properly permitted or recorded, or data entry mistakes. The core issue is that these records are the foundation for many financial and legal activities related to property ownership. When they are inaccurate, they can trigger significant complications when a property owner attempts to sell, refinance, or even adequately insure their property.

The consequence of these inaccuracies is not a new regulation, but rather an ongoing operational challenge within the city's administrative systems. The urgency arises because any transaction involving the property—from a simple refinance to a complex sale—will likely uncover these discrepancies, bringing the process to a halt until they are resolved.

Who's Affected

Real Estate Owners (Property Owners, Developers, Landlords, Property Managers)

  • Transaction Delays: The most immediate impact is on property sales and refinancing. Lenders and title companies rely on accurate property records. Discrepancies, such as an incorrect number of bedrooms or square footage, can cause loan approvals to be delayed or denied, and title searches may flag these inconsistencies, requiring resolution before closing.
  • Property Valuation and Taxation: While the RPA uses these records for tax assessment, the primary concern for owners is how errors might affect market valuation. An incorrect number of bedrooms, for instance, could lead a buyer or appraiser to underestimate a property's value. While tax assessments may be lower with fewer bedrooms listed, this could cause issues if the owner wishes to sell at market value based on the property's actual features.
  • Insurance Claims: In the event of damage or a total loss, insurance policies are often based on the property's recorded characteristics. Inaccuracies could lead to underinsurance or disputes during the claims process.
  • Permitting and Development: For developers or owners undertaking renovations, incorrect existing records can complicate the permitting process, requiring more extensive documentation to prove current conditions or planned changes align with zoning and building codes.

Financial Institutions (Banks and Lenders)

  • Increased Risk and Processing Time: Lenders require accurate collateral information. Incorrect property details necessitate additional due diligence, increasing the time and cost to underwrite and approve loans, and potentially increasing risk if the collateral's true value is misrepresented.

Title Companies and Escrow Officers

  • Operational Burden: Title insurers and escrow officers are on the front lines of identifying these discrepancies. Resolving them adds significant workload, requiring coordination with the property owner, the city, and other parties involved in the transaction, leading to potential backlogs.

Second-Order Effects

An administrative inefficiency in correcting property records can have cascading impacts across Hawaii's real estate market and beyond. If a significant number of transactions are held up due to incorrect property data, it can lead to:

  • Reduced Real Estate Transaction Volume: Delays and the cost of corrections can deter buyers and sellers from entering the market. This decreased activity can affect related industries like real estate agents, mortgage brokers, inspectors, and property stagers.
  • Stalled Development: If developers face protracted delays in correcting records for new projects or renovations, it can slow down the supply of new housing or commercial spaces. This scarcity, in turn, could further exacerbate housing affordability issues.
  • Impact on Local Government Revenue: While correcting records might eventually lead to more accurate tax assessments, prolonged delays in sales or refinancing mean that tax revenue tied to property transfers and new mortgages is also delayed, affecting the city's budget.

What to Do

Immediate Action Required for Real Estate Owners:

Given the potential for transaction disruption, the following steps are crucial:

  1. Verify Your Property Record: Access your property information through the Honolulu Department of Real Property Assessment (RPA). The primary source for inquiry is their website or direct contact.
  2. Identify Discrepancies: Carefully compare the official record (e.g., number of bedrooms, bathrooms, square footage, lot size) with the actual characteristics of your property. Look for differences that impact usability or market value.
  3. Gather Supporting Documentation: Collect evidence to support your claim for correction. This can include original building permits, certificates of occupancy, updated surveys, architectural plans, or property tax bills from previous years that accurately reflect the property's features.
  4. Contact the Department of Real Property Assessment (RPA): The RPA is the department responsible for maintaining property records. Their 'Kokua Line' service often fields these types of inquiries. The article from Hawaiinewsnetwork.com indicates that the RPA is the correct point of contact.
    • Contact Information (as of source date, always verify current details):
      • Phone: Direct inquiry lines for assessment issues are available through the City & County of Honolulu's general numbers for the RPA. It's advisable to check the official City & County of Honolulu RPA website for the most up-to-date contact details.
      • Website: The RPA website (honoluluRPA.com) is the best portal for information, online forms, and potentially direct contact options. Look for sections related to 'Property Queries,' 'Record Correction,' or 'Appeals.'
    • Formal Correction Process: Be prepared for a formal process that may involve submitting a written request with supporting documentation and potentially a site visit or review by an assessor. The RPA typically handles appeals and corrections through specific procedures outlined on their website or provided upon initial contact.
  5. Inform Transaction Parties: If you are currently in escrow or seeking financing, immediately inform your real estate agent, mortgage lender, and title/escrow company about the property record discrepancy and your intent to correct it. Seek their guidance on how to proceed and what documentation they require.

For Banks and Lenders:

  • Enhanced Due Diligence: Implement or reinforce a clear policy for verifying property details beyond the standard appraisal. This may include cross-referencing RPP records early in the process.
  • Conditional Loan Approvals: For loans where property detail discrepancies are noted, issue conditional approvals that require satisfactory resolution of the record error before funding.

For Title Companies:

  • Proactive Communication: Flag potential issues related to property record inaccuracies immediately to all parties involved. Provide clear guidance on the steps required for resolution and estimated timelines.
  • Streamline Correction Support: Develop internal resources or partnerships to assist clients in navigating the RPA correction process, potentially offering expedited services for an additional fee.

Action Details

If you are a real estate owner planning to sell or refinance your Oahu property within the next 90 days, or if you discover any discrepancy in your property record, you should initiate the correction process with the Honolulu Department of Real Property Assessment (RPA) immediately. This involves verifying your property details online and contacting the RPA with supporting documentation. Failing to do so could lead to significant transaction delays, potential loss of buyers, or inability to close on financing, costing you time and money.

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