(a)
Every
tax due upon real property, as defined by Sec. 5A-1.1, shall be a
paramount lien upon the property assessed, which lien shall attach
as of July 1st in each tax year and shall continue for six years.
If proceedings for the enforcement or foreclosure of the lien are
brought within the applicable period hereinabove designated, the lien
shall continue until the termination of said proceedings or the completion
of such sale.
(b)
The
Department may record with the State of Hawai'i, Bureau of Conveyances,
a certificate setting forth the amount of taxes due and unpaid which
has been returned, assessed, or as to which a notice of proposed assessment
has been issued. The certificate shall identify the taxpayer, the
taxpayer's last known address, and the taxes involved. The recording
or filing of the certificate shall have the effect set forth in this
Section, but nothing in this Section shall be deemed to require that
a certificate recorded or filed by the Department must include the
amount of any penalty or interest, in order to protect said lien.
Recordation of the certificate in the Bureau of Conveyances shall
be deemed, at such time, for all purposes and without any further
action, to procure a lien on land registered in the land court under
Chapter 501 of the Hawai'i Revised Statutes. Any cost incurred in
the filing of the certificate shall be a part of the lien for the
tax therein set forth.
(c)
In
case of cotenancy, if one cotenant pays, within the period of the
aforesaid government lien, all of the real property taxes, interest,
penalties, and other additions to the tax, due and delinquent at the
time of payment, he or she shall have pro tanto, a lien on the interest
of any noncontributing cotenant upon recording in the Bureau of Conveyances,
within 90 days after the payment so made by the cotenant, a sworn
notice setting forth the amount claimed, a brief description of the
land affected by tax key or otherwise, sufficient to identify it,
the tax year or years, and the name of the cotenant upon whose interest
such lien is asserted. When a notice of such tax lien is recorded
by a cotenant, the registrar shall forthwith cause the same to be
indexed in the general indexes of the Bureau of Conveyances. In case
the land affected is registered in the Land Court, the notice shall
also contain a reference to the number of the certificate of title
of such land and shall be filed and registered in the Office of the
Assistant Registrar of the Land Court, and the Registrar, in his or
her capacity as Assistant Registrar of the Land Court, shall make
a notation of the filing thereof on each Land Court Certificate of
Title so specified.
(d)
The
cotenant's lien shall have the same priority as the lien or liens
of the government for the taxes paid by him or her, and may be enforced
by an action in the nature of suit in equity. The lien shall continue
for three years after recording or registering, or until termination
of the proceedings for enforcement thereof if such proceedings are
begun, and notice of the pendency thereof is recorded or filed and
registered as provided by law, within the period.
(e)
The
Director or subordinate, in case-of a government lien, and the creditor
cotenant, in case of a cotenant's lien, shall, at the expense of the
debtor, upon payment of the amount of the lien, execute and deliver
to the debtor a sworn satisfaction thereof, including a reference
to the name of the person assessed or cotenant affected as shown in
the original notice, the date of filing of the original notice, a
description of the land involved, and the number of the certificate
of title of such land if registered in the land court, which, when
recorded in the Bureau of Conveyances or filed and registered in the
Office of the Assistant Registrar of the Land Court, shall, in the
case of a cotenant's lien, which contains the reference to the book
and page of the original lien, be entered in the general indexes of
the Bureau of Conveyances, and if a notation of the original notice
was made on any Land Court Certificate of Title, the filing of such
satisfaction shall also be noted on the certificate.
(f)
This
Section as to cotenancy shall apply, as well, in any case of ownership
by more than one assessable person.
(g)
Upon
enforcement or foreclosure by the government in any manner whatsoever
of any such real property tax lien, all taxes, of whatsoever nature
and howsoever accruing, due at the time of the foreclosure sale from
the taxpayer against whose property such tax lien is so enforced or
foreclosed, shall be satisfied as far as possible out of the proceeds
of the sale remaining after payment of:
(1)
The costs and expenses of the enforcement and foreclosure including
a title search, if any;
(2)
The amount of subsisting real property tax liens; and
(3)
The amount of any recorded liens against the property, in the order
of their priority, provided a claim for the surplus has been filed
with the Director within one year from the date of the sale.
(h)
The
liens may be enforced by action of the Director in the circuit court
and jurisdiction is conferred upon the circuit court to hear and determine
all proceedings brought or instituted to enforce and foreclose such
tax liens, and the proceedings had before the circuit court shall
be conducted in the same manner and form as ordinary foreclosure proceedings.
If the owners or claimants of the property against which a lien is
sought to be foreclosed are at the time out of the County or cannot
be served within the County, or if the owners are unknown, and the
fact shall be made to appear by affidavit to the satisfaction of the
court, and it shall in like manner, appear prima facie that a cause
of action exists against such owners or claimants or against the property
described in the complaint, or that such owners or claimants are necessary
or proper parties to the action, the court may grant an order that
the service may be made in the manner provided by Chapter 634, H.R.S.
(i)
In
any such case it shall not be necessary to obtain judgment and have
execution issued and returned unsatisfied before proceeding to foreclose
the lien for taxes in the manner herein provided.
(j)
Satisfaction,
release, and fulfillment of all obligations under the lien shall include
payment of the principal amount of the tax due, penalties, interest,
recording fees at the current rate established by the Bureau of Conveyances
or Office of the Assistant Registrar of the Land Court for the recording
of the sworn satisfaction and Release of Lien, and any other fee paid
by the Department due to an act or omission of the taxpayer.
(Ord. No. 394, July 1,
1981; Ord. No. 516, December 9, 1987; Ord. No. 573, July 16, 1990; Ord.
No. 658, July 7, 1994; Ord. No. 1052, July 3, 2019)
All real property on which a lien for taxes exists may be sold
by way of foreclosure without suit by the Director, and in case any
lien, or any part thereof, has existed thereon for three years, shall
be sold by the Director at public auction to the highest bidder, for
cash, to satisfy the lien, together with all interest, penalties,
costs, and expenses due or incurred on account of the tax, lien, and
sale, the surplus, if any, to be rendered to the person thereto entitled.
The sale shall be held at any public place proper for sales on execution,
after notice published at least once a week for at least four successive
weeks immediately prior thereto in any newspaper with a general circulation
published in the County. If the address of the owner is known or can
be ascertained by due diligence, including an abstract of title or
title search, the Director shall send to each owner notice of the
proposed sale by registered mail, with request for return receipt.
If the address of the owner is unknown, the Director shall send a
notice to the owner at his or her last known address as shown on the
records of the Department of Finance. The notice shall be deposited
in the mail at least 45 days prior to the date set for the sale. The
notice shall also be posted for a like period in at least three conspicuous
public places within the County, and if the land is improved one of
the three postings shall be on the land.
(Ord. No. 394, July 1,
1981)
If the land has been registered in the Land Court, the Director
shall also send, by registered mail, a notice of the proposed sale
to any person holding a mortgage or other lien registered in the Office
of the Assistant Registrar of the Land Court. The notice shall be
sent to any such person at his or her last address as shown by the
records in the Office of the Registrar, and shall be deposited in
the mail at least 45 days prior to the date set for the sale.
(Ord. No. 394, July 1,
1981)
The notice of sale shall contain the names of the persons assessed,
the names of the present owners (so far as shown by the records of
the Director and the records, if any, in the Office of the Assistant
Registrar of the Land Court), the character and amount of the tax,
and the tax year or years, with interest, penalties, costs, expenses,
and charges accrued or to accrue to the date appointed for the sale,
a brief description of the property to be sold, and the time and place
of sale, and shall warn the persons assessed, and all persons having
or claiming to have any mortgage or other lien thereon or any legal
or equitable right, title, or other interest in the property, that
unless the tax, with all interest, penalties, costs, expenses, and
charges accrued to the date of payment, is paid before the time of
sale appointed, the property advertised for sale will be sold as advertised.
The Director may include in one advertisement of notice of sale notice
of foreclosure upon more than one parcel of real property, whether
or not owned by the same person and whether or not the liens are for
the same tax year or years.
(Ord. No. 394, July 1,
1981)
If at the time appointed for the sale the Director shall deem
it expedient and for the interest of all persons concerned therein
to postpone the sale of any property or properties for want of purchasers,
or for other sufficient cause, he or she may postpone it, from time
to time, until the sale shall be completed, giving notice of every
such adjournment by a public declaration thereof at the time and place
last appointed for the sale; provided that the sale of any property
may be abandoned at the time first appointed or any adjourned date,
if no proper bid is received sufficient to satisfy the lien, together
with all interest, penalties, costs, expenses, and charges.
(Ord. No. 394, July 1,
1981)
The Director, on payment of the purchase price, shall make,
execute, and deliver all proper conveyances necessary in the premises
and the delivery of the conveyances shall vest in the purchaser the
title in fee thereto, and such title shall be free and clear of any
lien, claim, or encumbrance against such property except the lien
for real property taxes subsequent to that for which the property
was sold, subject only to any mineral rights of the State and any
easements in favor of any government entity; provided, that the taxpayer
may redeem the property sold by payment to the purchaser at the sale,
within one year from the date of the sale, of the amount paid by the
purchaser, together with all costs and expenses which the purchaser
was required to pay, including the fee for recording the deed, and
in addition thereto, interest on such amount at the rate of 12% a
year.
(Ord. No. 394, July 1,
1981; Ord. No. 573, July 16, 1990)
The Director by rules or regulation may prescribe a schedule
of costs, expenses, and charges and the manner in which they shall
be apportioned between the various properties offered for sale and
the time at which each cost, expense, or charge shall be deemed to
accrue; and such costs, expenses, and charges shall be added to and
become a part of the lien on the property for the last year involved
in the sale or proposed sale, the tax for which is delinquent. Such
costs, expenses, and charges may include provision for the making
of and the securing of certificates of searches of any records to
furnish information to be used in or in connection with the notice
of sale or tax deed, or in any case where the Director shall deem
such advisable; provided that the Director shall not be required to
make such searches or to cause them to be made except as provided
by Sec. 5A-5.3 with respect to mortgages or other liens registered
in the Office of the Assistant Registrar of the Land Court.
(Ord. No. 394, July 1,
1981)
The tax deed referred to in Sec. 5A-5.6 is prima facie evidence
that:
(a)
The
property described by the deed was duly assessed for taxes in the
years stated in the deed and to the persons therein named.
(b)
The
property described by the deed was subject on the date of the sale
to a lien or liens for real property taxes, penalties, and interest
in the amount stated in the deed, for the tax years therein stated,
and that the taxes, penalties, and interest were due and unpaid on
the date of sale.
(c)
Costs,
expenses, and charges due or incurred on account of the taxes, liens,
and sale had accrued at the date of the sale in the amount stated
in the deed.
(d)
The
person who executed the deed was the proper officer.
(e)
At
a proper time and place the property was sold at public auction as
prescribed by law, and by the proper officer.
(g)
The
grantee named in the deed was the person entitled to receive the conveyance.
(Ord. No. 394, July 1,
1981)
(a)
The
Director shall pay from the surplus all taxes, including interest
and penalties, of whatsoever nature and howsoever accruing, as provided
in Sec. 5A-5.1, and further he or she may pay from the surplus the
cost of a search of any records where such search is deemed advisable
by him or her to ascertain the person or persons entitled to the surplus;
provided, nothing herein contained shall be construed to require the
Director to make or cause any such search to be made.
(b)
All
proceeds remaining after payment of the costs and expenses of the
enforcement and foreclosure of the tax lien, including a title search,
and the amount of subsisting real property taxes, shall be distributed
to lienholders of record in the order of their priority who have filed
claims for the surplus with the Director within one year from the
date of sale. Any lien, claim or encumbrance against the property
remaining unsatisfied after the distribution of the surplus monies
shall be extinguished and unenforceable against the property and the
purchaser to whom the property is conveyed by the Director. If, in
order to ascertain the person or persons entitled to the surplus,
the Director deems it advisable to conduct a search of any records,
he or she may pay from the surplus the cost of such search; provided,
nothing herein contained shall be construed to require the Director
to make or cause any search to be made. Any lienholder failing to
file a claim for the surplus within one year from the date of the
sale shall have no right to the surplus. The Director shall pay from
any surplus remaining after distribution to record lienholders who
have filed claims, all taxes, including interest and penalties, of
whatsoever nature and howsoever accruing due at the time of the foreclosure
sale from the taxpayer against whose property such tax lien is so
enforced or foreclosed. If after payment of all taxes surplus funds
remain, the Director shall pay the surplus to the taxpayer against
whose property the tax lien was foreclosed, provided that the taxpayer
has filed a claim for the surplus with the Director within one year
from the date of sale. Any surplus remaining after payment to all
those entitled as herein set forth shall be deposited into the County
General Fund.
(c)
If
the Director is in doubt as to the person or persons entitled to the
balance of the fund, he or she may refuse to distribute the surplus
and any claimant may sue the Director in the circuit court. The Director
may require the claimants to interplead, in which event he or she
shall state the names of all claimants and shall cause them to be
made parties to the action. If there are persons entitled to the fund
who have not filed a claim, or if in the Director's opinion there
may be other persons entitled to the fund who are unknown, the Director
may apply for an order or orders joining these persons.
(d)
Any
orders of the court or summons in the matter may be served as provided
by law or the rules of court, and all persons having any interest
in the monies who are known, including the guardians of such of them
as are under legal age or under any other legal disability (and if
any one or more of them is under legal age or under other legal disability
and without a guardian, the court shall appoint a guardian ad litem
to represent them therein) shall have notice of the action by personal
service upon them. All persons having any interest in the monies whose
names are unknown or who, if known, do not reside within the County,
or for any reason cannot be served with process within the County,
shall have notice of the action as provided by Chapter 634, H.R.S.,
except that any publication of summons shall be held in at least one
newspaper of general circulation published in the County of Kaua'i,
and the form of notice to be published shall provide a brief description
of the property which was sold.
(e)
All
expenses incurred by the Director shall be met out of the surplus
monies realized from the sale.
(Ord. No. 394, July 1,
1981; Ord. No. 573, July 16, 1990)
In the case of real property which is subject to a time share
plan, all provisions of this Article relating to enforcement and collection
of delinquent taxes shall be administered against any time share unit.
The plan manager of a time share unit shall be primarily liable for
the payment of any real property tax delinquencies due on a time share
unit under the plan manager's authority.
(Ord. No. 713, November
22, 1996)
(a)
Pursuant
to Chapter 26, Kaua'i County Code 1987, as amended, the County may
establish community facilities districts and levy special taxes upon
properties within such districts and, in the event the special tax
is not paid when due with respect to any such property, may foreclose
the lien of the special tax by way of advertisement and sale without
suit, in the same manner, except as otherwise approved by Council,
under the same conditions and penalties, and with the same effect
as provided by general law for sales of real property pursuant to
default in payment of property taxes. In the case of properties within
a community facilities district, the lien of delinquent real property
taxes and the lien of delinquent special taxes shall be foreclosed
together in a single sale to satisfy both liens, together with all
applicable charges for interest, penalties, costs and expenses; provided,
however, that: (1) the lien of delinquent special taxes may be foreclosed
separately in the case of properties within a community facilities
district for which bonds have been issued and remain outstanding pursuant
to Chapter 26; and (2) in the event of a delinquency in either, but
not both, the real property tax or special tax on a property, the
lien of the delinquent real property tax or special tax, as applicable,
may be foreclosed separately if so directed by the Director of Finance.
(b)
Sales upon foreclosure pursuant to Subsection (a) of this Section shall be conducted in the manner provided in this Chapter for foreclosures of real property tax liens, subject to the following further provisions:
(1)
In the case of a single sale upon foreclosure to satisfy both the lien of real property taxes and the lien of special taxes, the proceeds of the sale shall be applied first to satisfy both the delinquent real property taxes and delinquent special taxes, together with all applicable charges for interest, penalties, costs and expenses, and surplus sale proceeds, if any, shall be applied as set forth in Sections 5A-5.1 and 5A-5.9.
(2)
In the case of a separate sale upon foreclosure of the lien of special taxes, the proceeds of the sale shall be applied first to satisfy the delinquent special taxes, together with applicable charges for interest, penalties, costs and expenses, and surplus sale proceeds, if any, shall be applied as set forth in Sections 5A-5.1 and 5A-5.9, which shall be applicable to the foreclosure in the same manner as in the case of foreclosures of real property tax liens. Any such foreclosure of the lien of special taxes shall not be deemed to satisfy, extinguish or otherwise affect the lien of real property taxes on the property, whether then due or delinquent or thereafter coming due, except to the extent that such surplus sale proceeds are applied to the payment of real property taxes pursuant to Sections 5A-5.1 and 5A-5.9, nor shall such foreclosure prevent or restrict any subsequent sale of the property upon foreclosure of the lien of real property taxes.
(3)
In the case of a separate sale upon foreclosure to satisfy the lien
of real property taxes, the proceeds of the sale shall be applied
first to satisfy the delinquent real property taxes, together with
all applicable charges for interest, penalties, costs and expenses,
and surplus sale proceeds, if any, shall be applied as set forth in
Secs. 5A-5.1 and 5A-5.9. Such foreclosure shall not be deemed to satisfy,
extinguish or otherwise affect the lien of special taxes on the property,
whether then due or overdue or thereafter coming due, except to the
extent that such surplus sale proceeds are applied to the payment
of special taxes pursuant to Secs. 5A-5.1 and 5A-5.9, nor shall such
foreclosure prevent or restrict any subsequent sale of the property
upon foreclosure of the lien of special taxes.
(4)
In each case, title to the property shall be conveyed subject to the liens of all real property taxes and special taxes not satisfied by the foreclosure, and the conveyance instruments for the property shall so provide, notwithstanding anything to the contrary in this Chapter, including, without limitation, any provisions to the contrary in Sec. 5A-5.6 or 5A-5.9.
(c)
Notwithstanding
the foregoing, if the County issues bonds for a community facilities
district pursuant to Chapter 26, the enforcement of the lien of special
taxes on properties within the district may be subject to such further
covenants and agreements of the County as may be set forth in the
bond indenture or other applicable documents pursuant to which the
bonds are issued.
(Ord. No. 927, March 28,
2012)
