DROA Becomes Less of a Mouthfull

Members of the Hawaii Association of Realtors used the Deposit, Receipt, Offer and Acceptance (DROA) form agreement to execute residential sales of real property for as long as I can remember. In fact, the first Hawaii court case to address a DROA was in 1975 in Malani v. Clapp, 56 Haw. 507.

Well no more, since June 2007, the DROA form has been updated and re-named. It is now simply called the "Purchase Contract." A blackline comparison of both versions is available here and a summary of changes is available here.

In addition to other changes, the Purchase Agreement adds the following paragraph:

C-49 Governmental Restrictions Disclosure. Buyer is aware that the Property is subject to all applicable federal, state and county laws, statutes, regulations, codes, ordinances, rules, procedures, restrictions, and requirements, including, but not limited to, those concerning land use, zoning, building permits and requirements, setbacks, height limitations, and allowable uses.

C-49 reminds the Buyer that it is responsible for land use due diligence, which can help a Buyer avoid holding the bag for structures, improvements, uses, etc. that are not in compliance with land use laws.