2013 Hawaii Revised Statutes
TITLE 23. CORPORATIONS AND PARTNERSHIPS
421H. Limited-Equity Housing Cooperatives
421H-2 Articles of incorporation.

§421H-2 Articles of incorporation. (a) The articles of incorporation and bylaws shall require the purchase and sale of the stock of resident owners who cease to be residents, at not more than a transfer value determined as provided in the articles and bylaws, and which shall not exceed the aggregate of the following:

(1) The consideration paid for the membership share by the first occupant of the unit involved, as shown on the books of the corporation.

(2) Accumulated interest, or an inflation allowance at a rate which may be based on a cost-of-living index, an income index, or market-interest index. Any increment pursuant to this paragraph shall not exceed a ten per cent annual increase on the consideration paid for the membership or share by the first occupant of the unit involved.

(3) The value, as determined by the board of directors of the corporation, of any improvements installed at the expense of the member with the prior approval of the board of directors.

(4) No other charges, fees, premiums, taxes, or payments or exchanges of any kind may be imposed, assessed, or made a condition of any transfer.

(b) The articles of incorporation and bylaws shall require the board of directors or corporate members to sell the stock purchased as provided in subsection (a) to new resident shareholders at a price which does not exceed the transfer value paid for the unit. Upon termination or dissolution of the corporation, the then existing stockholders shall be paid an amount that does not exceed the transfer value of their share.

(c) Amendment of the articles of incorporation shall require the affirmative vote of at least two-thirds of the resident shareholders.

(d) The articles of incorporation and bylaws shall require:

(1) The corporation issue only one class of stock;

(2) One share shall be issued for each dwelling unit in the cooperative;

(3) Voting rights shall be based upon one share, one vote; and

(4) Each shareholder shall be a resident of the unit represented by the share held.

(e) The articles of incorporation and bylaws shall require a provision that there shall not be any social, political, racial, or religious discrimination nor any discrimination on the basis of age, sex, marital, or parental status, subject only to limitations under applicable federal, state, or county laws, rules, or regulations. [L 1987, c 105, pt of §1; am L 1988, c 373, §24]