The Hawaii Legislature is considering a bill that will add new requirements for the title reports the title industry prepares, as well as additional penalties for not complying with these new requirements.
The bill, HB 1704, was introduced by Rep. Cindy Evans, D-North Kona and South Kohala.
Under the proposed law, title insurers would be required to include recorded liens and pending actions in title reports. The bill states, “Except as allowed by rules adopted by the commissioner, no title insurer shall knowingly issue any title insurance policy, commitment to insure or title report without showing all outstanding, enforceable recorded liens or other interests against the property for which the title is to be insured; provided that title reports under this subsection shall show any notice recorded pursuant to section 501-151 or 634-51, or under any other law or process, regarding the pendency of any action affecting title to the property.”
In addition, it establishes criminal penalties for knowingly issuing title insurance or title reports without disclosing pending actions or other interests against the real property. If passed, anyone who violates the new law would be guilty of a class C felony.