Condo Property Regime – CPR on Kauai. What is it?

    What is a CPR Property?

    Here’s a map of one in Hanalei!

    Below you’ll see how one of our friends developed 2 of the 8 homes in this CPR.

    A CPR (Condominium Property Regimes) property is an area(s) formerly sugar plantations (subdivided) now available for sale. When these plantations closed their doors back in the 1950’s the land become enormous parcels of land which over time were further subdivided into smaller lots of land. Efforts to keep the rural theme thriving and to encourage agriculture these lots were not allowed to be subdivided any further than twenty five acres. The twenty five acre is not a set rule per se but it will be a more convenient example in this context because it is easier to work with.

    Twenty five acres was expensive in the earlier days. Buyers would ban together and form a “Hui” (group) performing a group purchase verses a single buyer. Let’s break it down. Five buyers would form a Hui and each buyer would buy five acres of the perspective land. They would take ownership of the land under Tenants in Common or Joint Tenancy alongside their partners in the Hui. With that said there are downsides to owning property in a Hui. In a Hui you are technically married to the other people in the Hui. What happens to one partner happens to all the partners. Including but not limited to law suits, tax liens, etc. Another downside, the twenty five acres cannot be subdivided into smaller lots for sale.

    With all things there are loopholes, a savvy developer or lawyer figured out it was possible to transform an apartment building into a condo project and sell off the apartment units. Why could you do the same thing with vacant land? We now have Condo Property Regime for land parcels in Kauai. These CPR properties are similar to apartment unit only if they exist on land. Typically these units may be within a larger lot in an actual subdivision, they are not considered lots and cannot be further subdivided.

    A Mainland Buyer may be a little confused at the aesthetics of the land. It is important to understand there are a mired of rural properties in Kauai in the form of CPR developments. CPR’s can be beneficial a buyer for several reasons. First; unlike the old Hui owned properties the newer CPR unit ownership shields you from your neighbors as a separate property. It’s a unit like an apartment unit and like an apartment in a condo complex; a CPR property is set up according to a stringent guidelines put in place by the State Of Hawaii Real Estate Commission which entails certain rules and regulations that pertain to how the Association of Apartment Owners (AOAO designation are in some of the CPR documents). The guidelines may seem too restrictive but in a good CPR development they protect the members in said CPR development designed to keep the development up to par with particular standards. These rules/guidelines keep the property values up and the properties themselves looking kept up. I tell clients who do not like the CPR rules and regulations to drive through some the older post plantation housing areas here on Kauai where those regulations aren’t in place and see if they would want to live there. Let’s say if you have a neighbor that has a bunch of junked cars parked in their yard you cannot tell him to remove them. In a CPR development you can and are well within your right to do so according to the CPR rules.

    At this point I would like to take the time to clarify a few things you need to be aware of. The County of Kauai Planning and Building Departments do not see your CPR unit as separate when it comes to building permits. The whole lot is considered in that particular context. The only exception is the overall separation rules and you must pay attention when purchasing a CPR unit. If someone in one of the CPR units has illegal structures or illegal use of his unity the County building inspector is involved it will affect you as well. So when you are looking for a CPR to purchase find out whether there is a home on it or not. Be sure your CPR documents are up to date. Also take your CPR documents to a competent real estate attorney to cross all the T’s and dot all the I’s.

    Another example of what a CPR can look like in plan form:

    list my home condo land kauai listing agent development deal kauai homesites ready to build vacant land
    8 sites ready for roads, water and foundations.

    We have a listing that’s a CPR and wrote an article on it. See it here:

    http://www.kauairealestategroup.com/blog/8-home-sites-8-tax-parcels-4663-hauaala-road-kapaa-96746-kauai-development-east-side-lots-for-sale/

    How to finance this type of deal? Visit:

    http://www.kauairealestategroup.com/finance/

    For more info call Billy O’Sullivan

    808-755-5866

    billyo@billyo.com

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    Billy O'Sullivan

    I'm the Team Leader at Kauai Real Estate Group. If you need anything Kauai related, just holler! I'll help ;). My personal cell is 808-755-5866 or you can reach out via email: billyo@billyo.com
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