HB 2542 Summary

• Prohibits foreign principals from directly or indirectly owning, acquiring, or having a controlling interest in Hawaii real property or real property interests, effective July 1, 2024, with limited exceptions for de minimus indirect interests in publicly traded companies.

• Requires foreign principals who owned real property before July 1, 2024, to register that ownership with the Hawaii Attorney General by January 1, 2025, with $1,000 daily civil penalties for late registration and potential liens on unregistered property.

• Permits foreign principals to acquire real property only through devise, descent, security interest enforcement, or debt collection, but requires divestment within three years of acquisition.

• Requires real property buyers to provide signed affidavits attesting they are not foreign principals and are in compliance with the chapter; failure to obtain the affidavit does not affect title or create closing agent liability unless the closing agent has actual knowledge of a violation.

• Authorizes forfeiture of real property owned or acquired in violation of the chapter to the State through civil court action, with misdemeanor penalties for foreign principals who purchase prohibited property and for persons who knowingly sell to foreign principals.