Understanding CPR Basics

CPR stands for Condominium Property Regime.  It is a way of dividing interest in land, with the creation of “condominium units” and appurtenant Limited Common Elements. There are single family homes that are part of a condominium project, which can be confusing at first.  You might see a property with Unit A or Unit 1 as part of this address.  That signifies it is part of a CPR.  It is a very common practice in Hawaii. 

 

Creating a CPR allows the property to have at least two separate units, therefore creating more housing ownership opportunities.  These units can be individually owned by different parties, or  one party may own all the units in the CPR.  CPRs are often created when subdivision cannot be done, or the cost of subdividing is too high. It does not require County imposed subdivision improvements, which can save quite a bit of capital.  Each unit has its own TMK for tax purposes, as well as separate title.

 

A CPR project always has a “common element” that is shared by unit owners.  This is often a shared driveway.  Septic systems can also be shared.  The Condominium Property Regime establishes the rules for governing the property that owners must abide by, usually put in place for the protection of all owners and drafted by attorneys who specialize in real estate law.  Each set of “CPR Documents” is different.  Some require owners to pay joint maintenance costs, much like a traditional condominium, but most single family CPR projects don’t and operate more like single family homes.  One distinction for CPR owners, however, is that if your property is part of a CPR, all of the owners are essentially tied together, and approval may be required to make major changes to the structural elements contained within the property, and approval by all joint owners is often required for permitting.

 

Yes, a CPR Unit is considered fee simple, separate property, so you can sell your interest just like you would a non-condominiumized piece of land.  The new owner will be entitled to review the CPR documents for approval prior to the close of escrow, and the Seller is required to pay for and furnish these documents to the Buyer.

 

The first step to developing a new CPR project is identifying that the property is eligible.  Some of the considerations include:

 

• Size of the property (Must be at least 10,000 sq ft)
• Zoning 
• Availability of Water Connections
• Availability of Sewer or Room for Onsite Septic System (You can have one 5 bedroom septic system per 10,000 square feet of land. It can be shared, but can’t be connected to more than 2 dwellings.)
• Ensuring that it is permitted in the CCRs if it is part of a subdivision already