New Hawaii Law Will Protect Homebuyers from Predatory Contracts

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WASHINGTON, D.C., – RealEstateRama – The American Land Title Association (ALTA), the national trade association of the land title insurance industry, AARP and the Hawai‘i Land Title Association (HLTA) applaud the Hawai‘i State Legislature for passing Senate Bill (SB) 2861/Act 176, which includes provisions protecting homeowners from the predatory practice of filing unfair real estate fee agreements in property records, known as Non-Title Recorded Agreements for Personal Services (NTRAPS). The new law will make NTRAPS unenforceable.

“The property rights of American homebuyers must be protected,” said ALTA Vice President of Government Affairs Elizabeth Blosser. “We have to ensure that there are no unreasonable restraints on a homebuyer’s future ability to sell or refinance their property due to unwarranted transactional costs.”

“The passage of SB 2861/Act 176 is a continuation of AARP’s advocacy efforts, undertaken in collaboration with ALTA in other states, to put an end to this harmful practice,” said AARP Government Affairs Director Samar Jha. “We look forward to working on similar legislative solutions in other states to help protect homeowners against this predatory real estate practice.”

SB 2861/Act 176 follows the objective of similar bills introduced across the country to provide a remedy for existing NTRAPS while also discouraging these types of unfair practices impacting homeowners.

“HLTA members proudly supports the passage of SB 2861/Act 176 and commend our legislature for protecting Hawai‘i’s homebuyers from unfair practices,” said HLTA President Jerome Bundalian.

?“For many kupuna, their home is their most important asset and the cornerstone of their financial stability,” said AARP Hawai‘i State Director Keali‘i Lopez. “Kupuna on a fixed income may be especially vulnerable to marketing techniques, such as offers for quick cash. SB 2861 will protect homeowners against this type of deceptive marketing and allow them to preserve their investments in their homes. We’re appreciative of SB 2861/Act 176 as well as the legislature’s work on the bill and applaud Hawai‘i Gov. Josh Green for signing the bill into law.”

The new law will:

  • Make NTRAPS unenforceable by law.
  • Restrict and prohibit the recording of NTRAPS in property records.
  • Create penalties if NTRAPS are recorded in property records.
  • Provide for the removal of NTRAPS from property records and recovery of damages.

Hawai‘i Gov. Josh Green signed the legislation on July 2, 2024.

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About ALTA

The American Land Title Association, founded in 1907, is a national trade association representing more than 6,000 title insurance companies, title and settlement agents, independent abstracters, title searchers and real estate attorneys. ALTA members conduct title searches, examinations, closings and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

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