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Hawaii

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Hawaii — Contract for Deed / Agreement of Sale

Legal information, not legal advice. Verify against the cited primary sources before acting. Statutes in this area are frequently amended. Last verified: 2026-06-08.

Hawaii’s installment land contract is the “agreement of sale.” Hawaii has no single comprehensive agreement-of-sale consumer-protection statute of the Texas/Minnesota type; instead the instrument is governed by a combination of general real-property statutes (conveyance-tax, recording/priority, statute of frauds, usury, foreclosure) and a robust equitable anti-forfeiture case line. The decisive feature is the remedy regime: under jenkins-v-wise-1978 a Hawaii agreement of sale is not subject to strict, self-executing forfeiture. The courts treat it as akin to a financing instrument and relieve a good-faith defaulting buyer from forfeiture; a seller who wants to keep the buyer’s payments can do so only to the extent the retention bears a reasonable relationship to actual damages (gomez-v-pagaduan-1980; kaiman-realty-v-carmichael-1982). The Legislature has confirmed that an agreement of sale may be foreclosed: HRS § 667-40 authorizes use of the chapter 667 power-of-sale foreclosure in the non-mortgage situation of an agreement of sale where the instrument provides a power of sale, and the agreement may otherwise be foreclosed by action under chapter 667 Part IA. Hawaii therefore aligns with the Skendzel/Sebastian treat-as-mortgage drift: foreclosure, not forfeiture, is the reliable default remedy.

0. Identity & Terminology

  • In-state name(s): “Agreement of sale” is the controlling Hawaii statutory and practice term for the installment land contract (used verbatim in the conveyance-tax statute HRS § 247-1, the recording-priority statute HRS § 502-85, and the foreclosure statute HRS § 667-40). “Contract for deed,” “installment land contract,” and “land contract” describe the same instrument colloquially. The buyer is the vendee/buyer; the seller is the vendor/seller. — HRS § 502-85, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0502.pdf
  • Recognition: Statutory and common law. Agreements of sale are recognized by name in several statutes (conveyance tax HRS § 247-1; recording priority HRS § 502-85; foreclosure HRS § 667-40), but the remedy/anti-forfeiture rules are common law (jenkins-v-wise-1978, gomez-v-pagaduan-1980, kaiman-realty-v-carmichael-1982). There is no dedicated agreement-of-sale chapter prescribing disclosures, cure periods, or a cancellation procedure.
  • Statutory home: No single chapter. The relevant homes are HRS ch. 667 (Foreclosures — § 667-40 applies power-of-sale foreclosure to agreements of sale; Part IA foreclosure by action; § 667-1 definitions), HRS ch. 502 (Bureau of Conveyances; recording — § 502-83 race-notice effect, § 502-85 agreement-of-sale priority), HRS ch. 247 (conveyance tax — § 247-1/-2/-3), HRS ch. 656 (statute of frauds — § 656-1), HRS ch. 478 (interest/usury — §§ 478-2, 478-4), HRS ch. 508D (mandatory seller disclosures), and HRS ch. 454F (SAFE Act / mortgage loan originator licensing). — HRS ch. 667, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Remedy regime: treat_as_mortgage. jenkins-v-wise-1978 holds that a time-is-of-the-essence clause does not entitle a seller to forfeit against a good-faith defaulting buyer; equity relieves against forfeiture and the agreement of sale operates like a financing/security device. HRS § 667-40 confirms an agreement of sale may be foreclosed (power of sale), and Part IA permits judicial foreclosure. Forfeiture-of-payments is permitted only up to a reasonable relationship to actual damages (gomez-v-pagaduan-1980; kaiman-realty-v-carmichael-1982). — Jenkins v. Wise, 58 Haw. 592, 574 P.2d 1337 (1978), https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/; see forfeiture-vs-foreclosure, skendzel-v-marshall-1973, sebastian-v-floyd-1979.

1. Formation & Mandatory Disclosures

  • Statute of frauds: Writing required. No action may be brought “upon any contract for the sale of lands, tenements, or hereditaments, or of any interest in or concerning them” unless the agreement or a memorandum is in writing and signed by the party to be charged. — HRS § 656-1(4), https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0656.pdf
  • Mandatory disclosures: No agreement-of-sale-specific disclosure schedule (no Texas §§ 5.069–5.070 / Minnesota ch. 559A analogue). Two overlays apply:
    • Residential seller disclosure — HRS ch. 508D. No seller may sell residential real property (1–4 dwelling units, condo, or co-op) without delivering a disclosure statement “fully and accurately” disclosing all material facts within the seller’s knowledge/control or observable from visible accessible areas (HRS § 508D-4; “disclosure statement” defined § 508D-1). The chapter reaches an agreement of sale because “real estate purchase contract” is defined broadly to include any “deposit, receipt, offer, acceptance, or other similar agreement for the sale or lease with option to buy” (HRS § 508D-1), and “sale” includes any transfer for consideration. The statement must be signed within six months before or ten days after contract acceptance and delivered within ten calendar days of acceptance (§§ 508D-4, 508D-5). — https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0508D.pdf
      • Penalty for omission: Voidable / rescission, not damages on the form. The buyer may rescind within fifteen calendar days of receiving the disclosure statement (HRS § 508D-5(b)); a buyer not furnished a compliant statement may rescind, but the right to rescind is cut off once the sale is recorded (HRS § 508D-16, “Remedies; voidable contracts”). Misstatements outside the form may still support common-law fraud and HRS ch. 480 (UDAP) claims. — HRS §§ 508D-5, 508D-16, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0508D.pdf
    • Seller-financing disclosure under the SAFE Act exemption (HRS ch. 454F). A seller who finances the sale of the seller’s own residential property and relies on Hawaii’s seller-financing exemption from MLO licensing must, per the DCCA Division of Financial Institutions, give the buyer specified disclosures — a current title search/liens, the interest rate, monthly principal-and-interest payment, any prepayment penalty, any late charges, the payment schedule, and a default-consequences disclaimer, and must record the loan. — Hawaii DCCA DFI, MLO FAQs, https://cca.hawaii.gov/dfi/mlo-faqs/ (see § 4 and needs_verification for the precise 454F subsection).
  • Recording requirement: No statutory deadline to record, but recording is the buyer’s chief priority protection. Hawaii has a single statewide Bureau of Conveyances with two systems — the Regular System (race-notice: an unrecorded conveyance is “void as against any subsequent purchaser … in good faith and for a valuable consideration … whose conveyance is first duly recorded,” HRS § 502-83) and the Land Court (Torrens/pure-race). A recorded agreement of sale is given express statutory priority over later conveyances or judgments against the seller (HRS § 502-85). The buyer records the agreement of sale (or a memorandum) to protect priority. — HRS §§ 502-83, 502-85, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0502.pdf; Bureau of Conveyances, https://dlnr.hawaii.gov/boc/
  • Annual accounting statement: No general statutory annual-accounting mandate for agreements of sale located. (Account figures surface transactionally on foreclosure/payoff.) See needs_verification.
  • Prepayment: No statute located barring or restricting prepayment of an agreement of sale; terms govern. (The 454F seller-financing-exemption disclosure list contemplates disclosure of any prepayment penalty rather than prohibiting one.) — https://cca.hawaii.gov/dfi/mlo-faqs/; see needs_verification.
  • Usury / interest cap: Hawaii’s general interest law is HRS ch. 478. Absent a written contract rate, the legal rate is 10% per year (HRS § 478-2). By written contract, a “consumer credit transaction” (credit to a natural person for personal/family/household purpose, or secured by the borrower’s principal dwelling, HRS § 478-1) may not exceed 12% per year (one percent per month), except a regulated financial institution may charge up to 24% (HRS § 478-4(a)). Whether the 12% consumer cap binds a particular seller-carried agreement of sale turns on whether it is a “consumer credit transaction”; a seller-financed residential sale to an owner-occupant generally fits. — HRS §§ 478-2, 478-4, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0478.pdf

2. Buyer’s Equitable Interest

  • Equitable title passes / equitable conversion recognized: Yes (functionally). Hawaii treats the agreement of sale as a financing instrument under which the buyer takes possession and an equitable interest at the initial closing, with legal title conveyed by deed at payoff — the premise of the anti-forfeiture rule in jenkins-v-wise-1978 (and the reason forfeiture wipes out “the right of possession and the equitable interest,” not merely payments). See equitable-conversion. — Jenkins v. Wise, 58 Haw. 592, 574 P.2d 1337 (1978), https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/. (Precise Hawaii equitable-conversion risk-of-loss holding: see needs_verification.)
  • Buyer’s interest recordable: Yes. The agreement of sale is a recordable conveyance, and HRS § 502-85 specifically grants a recorded agreement of sale priority over later seller conveyances/judgments. — HRS § 502-85, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0502.pdf
  • Buyer’s interest insurable: Yes; vendee’s-interest/agreement-of-sale title coverage is available from Hawaii title insurers (HRS § 667-52 even guarantees a foreclosure buyer’s choice of title insurer/escrow agent). — see needs_verification (specific insurer endorsements).
  • Risk of loss: Contract-governed. Under the financing-instrument view the buyer-in-possession ordinarily bears risk of loss absent a contrary clause; no Hawaii statute reassigns risk of loss for an agreement of sale. See needs_verification.
  • Improvements and waste: The buyer in possession holds the equitable interest and may improve the property; those improvements are part of what a forfeiture would destroy — a core equitable concern animating Jenkins’s relief-from-forfeiture rule. — https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/

3. Default & Remedies → see forfeiture-vs-foreclosure

  • Primary remedy: Foreclosure (treat-as-mortgage), with equitable limits on forfeiture. A defaulted agreement of sale is reliably enforced by foreclosure — either judicial foreclosure by action (HRS ch. 667 Part IA, § 667-1.5) or non-judicial power-of-sale foreclosure (HRS ch. 667 Part II) where the agreement contains a power of sale, expressly authorized for agreements of sale by HRS § 667-40. A raw contractual forfeiture is not self-executing and is subject to equitable relief. — HRS § 667-40, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Forfeiture available? Only in a qualified, equity-limited form. Under jenkins-v-wise-1978 a time-is-of-the-essence/forfeiture clause does not entitle the seller to forfeit against a buyer whose breach lacks gross negligence or bad faith; equity may relieve the buyer and even decree specific performance. Retention of the buyer’s payments as liquidated damages is enforceable only to the extent it bears a reasonable relationship to the seller’s actual damages (gomez-v-pagaduan-1980; affirmed at the Supreme Court in kaiman-realty-v-carmichael-1982). — https://www.courtlistener.com/opinion/1144806/gomez-v-pagaduan/
    • Substantial-equity bar: Functionally yes, via equity. Hawaii has no statutory substantial-equity sale like Washington’s RCW 61.30.120, but the Jenkins relief-from-forfeiture doctrine and the Gomez/Kaiman reasonable-relationship limit together prevent a seller from capturing a good-faith buyer’s accumulated equity through forfeiture; the seller’s path to realizing the debt while protecting equity is foreclosure with a sale. — https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/
  • Statutory cancellation: None. Hawaii has no statutory notice-and-cure cancellation procedure specific to agreements of sale (contrast Minnesota ch. 559; Washington RCW ch. 61.30). The applicable machinery is the foreclosure process of HRS ch. 667 (judicial Part IA, or power-of-sale Part II via § 667-40, with the notice-of-default-and-intention-to-foreclose and cure provisions of §§ 667-22 to 667-24 governing the power-of-sale track). — HRS ch. 667, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Judicial foreclosure required when: A power-of-sale foreclosure under § 667-40 is available only if the agreement of sale actually provides a power of sale; absent that, the seller proceeds by judicial foreclosure by action (Part IA). Power-of-sale foreclosures can also be converted to judicial foreclosure for residential property under HRS § 667-53. — HRS §§ 667-40, 667-53, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Acceleration enforceable? / restitution offset on forfeiture? Acceleration: generally enforceable per the instrument; no agreement-of-sale-specific statutory bar located (see needs_verification). Restitution offset: the Gomez/Kaiman reasonable-relationship rule operates as a restitution backstop — a defaulting buyer may recover retained payments that exceed the seller’s actual damages (a penalty) absent bad faith. — https://www.courtlistener.com/opinion/1144806/gomez-v-pagaduan/
  • Seller’s other remedies: specific performance / action for the price, damages, and foreclosure (judicial or power-of-sale). A seller may also accept the buyer’s good-faith cure and reinstatement consistent with Jenkins.

▸ For Sellers / Operators — Hawaii is a treat-as-mortgage state in substance: do not rely on a self-executing forfeiture clause. Under jenkins-v-wise-1978 a good-faith defaulting buyer can obtain relief from forfeiture (even specific performance), and under gomez-v-pagaduan-1980 / kaiman-realty-v-carmichael-1982 you may keep the buyer’s payments only to the extent they reasonably approximate your actual damages — you carry the burden of proving that relationship. The dependable enforcement route on default is foreclosure: power-of-sale under HRS ch. 667 Part II only if your agreement of sale contains a power of sale (authorized for agreements of sale by § 667-40), otherwise judicial foreclosure by action under Part IA — and note residential power-of-sale foreclosures can be converted to judicial under § 667-53. Make the buyer record the agreement of sale (HRS § 502-85 gives a recorded agreement priority), deliver the HRS ch. 508D disclosure statement on time (§§ 508D-4, 508D-5), watch the 12% consumer usury cap (HRS § 478-4) and the conveyance tax due up front on the agreement (§ 247-1; see § 6), and confirm your MLO-licensing / Dodd-Frank exposure (§ 4) before carrying paper.

▸ For Buyers — Your strongest protections are equitable and procedural: a forfeiture clause cannot summarily strip your equity if your default was not in bad faith (Jenkins), and any payments the seller keeps beyond actual damages are recoverable as a penalty (Gomez/Kaiman). Record your agreement of sale to lock in priority over the seller’s later creditors (HRS § 502-85), and use the ch. 508D disclosure-rescission window (15 days; cut off at recording, § 508D-16).

3b. Remedies — Advanced

  • Election of remedies / deficiency: No agreement-of-sale-specific election-of-remedies or deficiency statute located. On a judicial foreclosure, ordinary mortgage-foreclosure deficiency principles apply; HRS § 667-38 prohibits a deficiency judgment against an owner-occupant in a power-of-sale foreclosure. — HRS § 667-38, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Anti-forfeiture / equitable relief from forfeiture: Courts grant it. The governing standard: a time-is-of-the-essence clause “will not foreclose equitable relief where, absent gross negligence or bad faith conduct of the [defaulting party], forfeiture would be harsh and unreasonable” (jenkins-v-wise-1978), with the Gomez/Kaiman reasonable-relationship limit on retained payments. — https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/
  • Ejectment vs. eviction path: Because the agreement-of-sale buyer is an equitable owner in possession, not a tenant, the seller’s route to clear possession after an uncured default is foreclosure (and any resulting ejectment/possession order), not summary landlord-tenant eviction. See needs_verification (controlling Hawaii ejectment-vs-summary-possession holding for agreements of sale).
  • Quiet title after cancellation: Where the seller forecloses, the foreclosure decree/sale (judicial) or the recorded affidavit and conveyance after a power-of-sale (HRS §§ 667-31 to 667-33) perfect title; a separate quiet-title action is not ordinarily required. Contested matters are litigated within the foreclosure. — HRS §§ 667-31 to 667-33, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0667.pdf
  • Forfeited payments treatment: Liquidated-damages clause enforceable only on a reasonable-relationship-to-actual-damages basis absent the buyer’s bad faith; excess retention is an unenforceable penalty (gomez-v-pagaduan-1980; kaiman-realty-v-carmichael-1982). — https://www.courtlistener.com/opinion/1144806/gomez-v-pagaduan/
  • Intervening seller-lien risk to buyer: A recorded agreement of sale takes priority over a later conveyance by the seller or a later judgment against the seller affecting the property (HRS § 502-85(a)), and on the buyer’s satisfaction of the agreement those intervening claims are extinguished as to the property on recordation of the transfer of title (HRS § 502-85(b)). Recording is therefore the buyer’s principal defense against the seller’s creditors. — HRS § 502-85, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0502.pdf

4. Federal Overlay (as applied in-state) → see dodd-frank-seller-financing, safe-act-mlo, garn-st-germain-due-on-sale

  • Dodd-Frank exposure: Federal seller-financing rules apply in Hawaii with no special state carve-out. A natural-person seller financing one dwelling in 12 months may use the ≤1-property exclusion (no balloon limit, no ATR); the ≤3-property exclusion (with ATR, no negative amortization) is the next tier — per the “mortgage originator” definition / seller-financer exclusion at 15 U.S.C. § 1602(dd)(2) and 12 C.F.R. § 1026.36(a)(4)–(5) / § 1026.43. — see dodd-frank-seller-financing.
  • SAFE Act MLO licensing: Hawaii administers SAFE-Act mortgage-loan-originator licensing through the DCCA Division of Financial Institutions under HRS ch. 454F. The enumerated statutory exemptions in HRS § 454F-2 (as posted by DFI) list licensed attorneys, real-estate brokers, depository institutions, etc. The DCCA separately recognizes a seller-financing exemption: a seller who finances the sale of the seller’s own property and transacts three or fewer residential mortgage loans in one calendar year may be exempt from MLO licensing if specified conditions are met (including not exceeding the state usury limit and giving the buyer prescribed disclosures and a default-consequences disclaimer, and recording the loan). — HRS § 454F-2, Hawaii DFI, https://files.hawaii.gov/dcca/dfi/Laws_html/HRS0454F/HRS_0454F-0002.htm; DCCA DFI MLO FAQs, https://cca.hawaii.gov/dfi/mlo-faqs/; see safe-act-mlo and needs_verification (precise current 454F seller-financing subsection and its full amortization/balloon/rate conditions).
  • State consumer-protection overlay / CFPB enforcement notes: Hawaii has no agreement-of-sale-specific predatory-sales statute of the Texas/Minnesota type. The generally applicable overlays are the HRS ch. 480 UDAP statute (unfair or deceptive acts/practices) and the HRS ch. 508D disclosure regime. Post-2016 CFPB/state-AG scrutiny of predatory contract-for-deed selling is the national compliance backdrop. — HRS ch. 480 (see needs_verification for pinpoint § 480-2).

5. Title, Recording & Wraps → see garn-st-germain-due-on-sale

  • Memorandum recording: Permitted and advisable. An agreement of sale or a memorandum is recordable in the Bureau of Conveyances; recording confers priority on the buyer under HRS § 502-85 and protects against the seller’s later good-faith purchasers under the race-notice rule (HRS § 502-83). Land Court parcels require recording in the Torrens system. — HRS §§ 502-83, 502-85, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0502.pdf
  • Garn-St. Germain due-on-sale: An agreement of sale is a transfer that can trigger a due-on-sale clause in an underlying loan; Garn-St. Germain (12 U.S.C. § 1701j-3) makes due-on-sale clauses generally enforceable and preempts contrary state law, subject to the enumerated residential exemptions (which generally do not shelter a sale on an installment land contract where the borrower parts with occupancy/possession). See garn-st-germain-due-on-sale.
  • Underlying-mortgage / wrap: Wrap-around agreements of sale over an existing mortgage are permitted in Hawaii but carry the standard wrap risk: the senior lender may call or foreclose the underlying loan on a due-on-sale trigger even if the buyer pays the seller, and a senior foreclosure can extinguish the buyer’s junior equitable interest. No Hawaii statute specifically conditions a wrap on lender consent; disclosure and escrow of payments are contractual best practice (and the ch. 454F seller-financing disclosure list reaches existing-lien disclosure). — see garn-st-germain-due-on-sale; https://cca.hawaii.gov/dfi/mlo-faqs/.
  • Deed delivery: The seller retains legal title and conveys by deed at payoff (commonly via escrow). The conveyance tax is generally paid up front on the agreement of sale, so the later fulfillment deed is exempt as already taxed (HRS § 247-3; see § 6). — HRS § 247-3, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0247.pdf
  • Marketable title at payoff: The seller must convey marketable title at payoff; the recorded agreement of sale (priority under § 502-85) plus the fulfillment deed clears the chain, and § 502-85(b) extinguishes intervening seller-side claims on recordation of the title transfer.
  • Title insurance: Available to buyers (agreement-of-sale/vendee’s-interest and, at payoff, owner’s policies) through Hawaii title insurers.
  • Seller death / bankruptcy effect: The seller’s interest (legal title + payment stream) passes to the estate or bankruptcy estate subject to the buyer’s recorded agreement of sale and right to the deed at payoff. See needs_verification (Hawaii authority on agreement of sale in seller bankruptcy).

6. Tax Treatment

  • IRC § 453 installment reporting: An agreement of sale is an installment sale; a non-dealer seller may report gain under IRC § 453 as principal is collected (dealer-property and other exceptions apply). — 26 U.S.C. § 453, https://www.law.cornell.edu/uscode/text/26/453; see irc-453-installment-sale.
  • Property-tax responsibility: Contract-governed. In practice the buyer-in-possession (equitable owner) pays real property tax (a county tax in Hawaii). See needs_verification (any statutory allocation).
  • Homestead exemption for equitable owner: Hawaii has no homestead estate of the mainland type; it provides a bankruptcy/execution homestead dollar exemption under HRS ch. 651 (and a county real-property-tax home exemption for owner-occupants). Whether an agreement-of-sale buyer qualifies as an “owner” for the county RPT home exemption is administered at the county level. — HRS ch. 651, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0651.pdf; see needs_verification (county RPT home-exemption eligibility for an agreement-of-sale buyer).
  • Transfer / conveyance tax: Hawaii imposes the conveyance tax (HRS ch. 247) expressly on “agreements of sale” and assignments of agreements of sale (HRS § 247-1). The tax is graduated by price/use, starting at 100 for properties valued under $600,000 and rising in tiers (with higher rates for non-owner-occupant purchasers) (HRS § 247-2). Critically, the tax is paid up front on the agreement of sale; the later fulfillment deed executed pursuant to the agreement of sale is exempt provided the conveyance tax was fully paid on the agreement of sale (HRS § 247-3). — HRS §§ 247-1, 247-2, 247-3, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0247.pdf
  • Mortgage registration tax: None — Hawaii imposes no separate mortgage recording/registration tax; recording is a per-document Bureau of Conveyances fee.

7. Bankruptcy & Death / Divorce

  • Buyer bankruptcy: Whether a Hawaii agreement of sale is an executory contract (11 U.S.C. § 365) or a secured debt in the buyer’s bankruptcy is subject to the national split. Hawaii’s financing-instrument treatment (buyer holds an equitable interest; seller holds legal title as security — jenkins-v-wise-1978) supports secured-debt-style treatment, but the federal characterization is fact- and court-specific. — see needs_verification.
  • Seller bankruptcy: The seller’s interest enters the estate subject to the buyer’s recorded agreement of sale (priority under § 502-85) and right to the deed at payoff.
  • Assignability by buyer: An agreement of sale is assignable subject to its terms (the conveyance-tax statute expressly contemplates “assignments of agreement of sale,” HRS § 247-1); due-on-sale/anti-assignment clauses are enforced per their terms and the Garn-St. Germain overlay for underlying loans. — HRS § 247-1, https://data.capitol.hawaii.gov/sessions/session2017/HRS-Chapter-PDF’s/HRS_0247.pdf
  • Survivorship / divorce treatment: The buyer’s interest is real property that passes by will/intestacy and is divisible marital property on divorce under Hawaii family law. See needs_verification (specific Hawaii authority).

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
jenkins-v-wise-19781978forfeiture / equitable_interestA time-is-of-the-essence clause does not entitle a seller to forfeit an agreement of sale against a good-faith defaulting buyer; equity may relieve from forfeiture and order specific performance. The lead Hawaii anti-forfeiture authority.https://www.courtlistener.com/opinion/1414595/jenkins-v-wise/
gomez-v-pagaduan-19801980forfeiture / liquidated_damagesA seller may keep a defaulting buyer’s payments as liquidated damages only if the amount bears a reasonable relationship to actual damages; absent bad faith, the seller “is not … entitled to forfeiture” beyond that.https://www.courtlistener.com/opinion/1144806/gomez-v-pagaduan/
kaiman-realty-v-carmichael-19821982forfeiture / liquidated_damagesHawaii Supreme Court confirms the reasonable-relationship-to-actual-damages limit on retaining a defaulting buyer’s payments; excess retention is an unenforceable penalty.https://www.courtlistener.com/opinion/1177742/kaiman-realty-inc-v-carmichael/

9. Edge Cases (state-specific notes)

  • garn-st-germain-due-on-sale — An agreement of sale can trigger a due-on-sale clause on an underlying loan; no Hawaii statute conditions a wrap on lender consent, so the wrap risk is allocated by contract.
  • No statutory cancellation / treat-as-mortgage — Unlike Minnesota or Washington, Hawaii has no notice-and-cure cancellation statute for agreements of sale; default is resolved by foreclosure (HRS § 667-40 power-of-sale where a power of sale exists, else judicial foreclosure by action) under the Jenkins anti-forfeiture umbrella.
  • Recorded-agreement priority (HRS § 502-85) — a recorded agreement of sale beats a later seller conveyance or judgment, and those claims are extinguished on the buyer’s payoff/title transfer.
  • Conveyance tax on the agreement (HRS § 247-1/-3) — paid up front on the agreement of sale; the fulfillment deed is exempt if the tax was paid.
  • Dual recording system — Regular System (race-notice) vs. Land Court (Torrens); agreements of sale must be recorded in the system(s) governing the parcel.
  • (Add: manufactured/mobile-home agreements of sale; SCRA servicemember protections; county real-property-tax home-exemption eligibility for the equitable owner.)

10. Operations

  • Where records live: A single statewide Bureau of Conveyances (Department of Land and Natural Resources) in Honolulu records for all islands — there are no county recorder offices. Documents are recorded in the Regular System, the Land Court, or both (dual system). — Bureau of Conveyances, https://dlnr.hawaii.gov/boc/
  • Recorder / agency portals: Bureau of Conveyances (recording); county real property tax offices (Honolulu, Maui, Hawaii, Kauai) for property tax; Hawaii Department of Taxation for conveyance-tax processing. — Hawaii Dept. of Taxation, https://tax.hawaii.gov/.
  • Who may draft (UPL notes): Agreement-of-sale forms are standardized in practice (Hawaii Association of Realtors forms), but foreclosure of an agreement of sale (HRS ch. 667) and contested anti-forfeiture/relief claims are litigated through counsel; non-attorney drafting/foreclosing for others risks UPL exposure.
  • Typical costs: Bureau of Conveyances per-document recording fees; conveyance tax up front on the agreement (graduated from 100, HRS § 247-2); foreclosure costs on default.
  • Typical timelines: No statutory cure clock unique to agreements of sale; default enforcement runs on the ch. 667 foreclosure timeline (power-of-sale notice-of-default and cure under §§ 667-22 to 667-24, or the judicial-foreclosure schedule).
  • Key agencies: Bureau of Conveyances (DLNR); Hawaii Department of Taxation (conveyance tax); DCCA Division of Financial Institutions (SAFE/MLO licensing); Office of Consumer Protection / Attorney General (UDAP, ch. 480); county real property tax offices.
  • Useful forms: Recorded agreement of sale or memorandum; HRS ch. 508D seller’s disclosure statement; conveyance-tax certificate (Form P-64A/P-64B); notice of default and intention to foreclose (power-of-sale track).

11. Meta

Disclaimer. This page is legal information, not legal advice, and may be out of date. Hawaii has no single comprehensive agreement-of-sale statute; the remedy on default turns on general foreclosure law (HRS ch. 667) and an equitable anti-forfeiture case line, and outcomes are fact-specific. Consult a licensed Hawaii attorney before drafting, enforcing, or signing an agreement of sale.

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