Hawaii Counties

Real Estate Auctions in Hawaii

Hawaii follow a tax lien system for the collection of delinquent property taxes. When property owners in Hawaii fail to pay their property taxes, the local government may sell tax lien certificates on the delinquent properties.

In a tax lien sale, investors can expect an average Hawaii foreclosure timeline of approximately two to four months once the home is in foreclosure status and they purchase the tax lien certificates, which represent the outstanding taxes and any associated penalties and interest. The winning bidder of the tax lien certificate does not immediately gain ownership of the property. Instead, they acquire a lien on the property, and the property owner is given a specified redemption period to repay the delinquent taxes plus interest.

If the property owner fails to redeem the tax lien within the redemption period, the tax lien holder may initiate foreclosure proceedings. In Hawaii, the foreclosure process is known as a tax foreclosure auction or sale. The property is then sold at a public auction, and the highest bidder at the auction will obtain ownership of the property.

Tax Lien Process in Hawaii

When property owners in Hawaii fail to pay their property taxes, the local government may initiate the tax lien process. It involves the following steps-

1. Tax Lien Auction: The local government conducts a tax lien auction where investors can bid on tax lien certificates. These certificates represent the outstanding taxes, penalties, and interest on the delinquent properties.

2. Winning Bidder: The highest bidder at the tax lien auction becomes the holder of the tax lien certificate. They do not immediately acquire ownership of the property but gain a lien on the property.

3. Redemption Period: The property owner is given a redemption period to repay the delinquent taxes, penalties, and interest to the tax lien holder. The redemption period in Hawaii is typically one year.

4. Interest Rate: The property owner must pay interest to the tax lien holder for the redemption period. The interest rate is set by state law.

5. Foreclosure: If the property owner fails to redeem the tax lien within the redemption period, the tax lien holder may initiate foreclosure proceedings.

6. Tax Foreclosure Auction: The property is sold at a tax foreclosure auction, where the highest bidder obtains ownership of the property. The proceeds from the auction are used to satisfy the delinquent taxes and any other costs associated with the foreclosure process.

7. Surplus Funds: If the property is sold at the tax foreclosure auction for an amount exceeding the delinquent taxes and costs, the surplus funds may be returned to the property owner.

Foreclosures in Hawaii

In Hawaii, non-judicial foreclosure is the main technique used for foreclosure. This kind of foreclosure, often known as foreclosure by sale, does not require a court order but does require notice. Typically, a power of sale clause is included in the mortgage when it is first signed. This clause enables an attorney to foreclose on the property in the event of default and utilise the proceeds to pay down the original loan, which is commonly referred to as a note. Due to the fact that this is a non-judicial remedy, there are very strict notice specifications, and the power of sale wording must be included in the legal documents in order to employ this kind of foreclosure technique.

Foreclosure Process in Hawaii

Each situation is different, but on average, the Hawaii foreclosure timeline is approximately two to four months long once the home is in foreclosure status, if everything goes smoothly. This timeline doesn’t include the pre-foreclosure process, which can take months or even up to a year or longer.

1. Notice of Default: When a homeowner falls behind on their mortgage payments, the lender will issue a Notice of Default (NOD) to the borrower. The NOD informs the borrower of their delinquent payments and provides a certain period (typically 30 days) to cure the default.

2. Lis Pendens: If the borrower fails to resolve the default, the lender will file a Lis Pendens, which is a notice that a lawsuit has been initiated against the borrower. The Lis Pendens is recorded in the county where the property is located and publicly notifies interested parties about the pending foreclosure.

3. Foreclosure Lawsuit: The lender will initiate a foreclosure lawsuit by filing a complaint in the circuit court. The complaint states the details of the default, and the amount owed, and requests that the court allow the foreclosure process to proceed.

4. Court Proceedings: The borrower is served with a copy of the foreclosure complaint, giving them an opportunity to respond and defend against the foreclosure. The court will review the case, consider any defenses raised, and make a judgment regarding the foreclosure.

5. Foreclosure Sale: If the court rules in favor of the lender, a foreclosure sale is scheduled. The property is typically sold through a public auction, with the highest bidder acquiring ownership of the property. The proceeds from the sale are used to satisfy the outstanding mortgage debt.

6. Redemption Period: In Hawaii, there is no statutory right of redemption for the borrower to reclaim the property after the foreclosure sale.

7. Eviction: After the foreclosure sale, if the former homeowner remains in the property, the new owner (usually the winning bidder) may need to initiate eviction proceedings to regain possession of the property.

Counties Link

County	Courts of clerk	Tax Deed sale
Hawaii	https://www.hawaiicounty.gov/	https://records.hawaiicounty.gov/webl...
Honolulu	https://www.honolulu.gov/	NA
Kauai	https://www.kauai.gov/Home	NA
Maui	https://www.mauicounty.gov/	https://www.mauicounty.gov/1...

In Summary

Hawaii is known as a lien theory state, where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.
Hawaii follows a non-judicial process of foreclosure.
On average, the Hawaii foreclosure timeline is approximately two to four months long once the home is in foreclosure status.
Hawaii does not provide its citizens with the right to redemption.