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What is a CPR (Condominium Property Regime)?

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Hi, this is Kristian Nielsen with Honolulu HI 5 (now called Hawaii Living). Today, we’re going to discuss Condominium Property Regimes also known as CPR’s. Typically when we think of CPR we think of a high-rise or at least something that is built vertically, units above one another. However, a CPR can also be in the form of two single-family homes on the same lot. What defines a CPR is that they are common and limited common elements. 

Common elements could be a shared driveway, a driveway that is shared amongst all unit owners. Maybe a pool that is shared amongst the unit owners. A pool could also be a limited common element if it was for the exclusive use of each of these homes on the lot. Other examples, I should say, are limited common elements. Could be a garage, parking stall, the front door, windows and what defines a limited common element is an element that is for the exclusive use of one or more units, but not all units on the parcel. 

So what can be done just to go a little bit further with the limited common elements is via the condo’s declaration, the owners can make a common element into a limited common element. However, in order to take a certain limited common element back and make it a common element, it requires the consent of the owner who is using the limited common element. So a limited common element and common element, what they have in common is that they are shared ownership amongst all unit owners on the parcel with the difference being that the limited is for the exclusive use of one or more unit owners but not all unit owners on the parcel. You can get a bit confusing. 

So now why would someone want to create a CPR as opposed to subdividing a lot? Let’s say you had a piece of land with two homes. You can build two homes and you think, well, let me build two homes then. I don’t want a CPR. Separate homes should have more value. Well, if you want to subdivide, it is much more time consuming and much more costly than creating a CPR. Also, the lot size requirements are different, so let’s say we have a lot that is zoned R-5 in the county of Honolulu. That means per 5,000 square feet you’re allowed to build one home. 

Well, if you’re in an R-5 zone and you have 8,000 square feet, that would not be possible. However, creating a CPR would be possible on an R-5 zone lot because the requirements are only, I believe, it is 7,500 square feet the lot has to be to create that. Now, benefits. What are the benefits? Why would someone create a CPR? 

Let’s take the case of a duplex. You have a full kitchen, a functioning unit upstairs and you have a wet-bar downstairs since on single-family home lot you’re not allowed to have two full functioning kitchens. If you’re able to create a CPR, you will be able to create two separate units which means both units could have full kitchens. As an investor you could potentially live in one with a mortgage, have a second unit that you rent out with a separate mortgage, run it as a business. 

If you have the case of, let’s say, multi-family living, you may have parents living upstairs and downstairs you have their daughter with the daughter’s husband. Parents have no mortgage, daughter and husband has a mortgage. If we condominiumize this duplex, the daughter’s mortgage will not, if she defaults I should say on her mortgage, that will not impact the parent’s ownership of the unit. But if they’re in a duplex and the daughter defaults without having divided ownership, well, that could potentially be an issue. 

So there are different benefits to a CPR and that pretty much sums it up briefly. George is in another video talking more about zoning. So I should clarify that just having a certain lot size is not enough to either subdivide or creating a CPR. There are many other factors to it and George will touch on some of those in another video. I hope this brief video today cleared it up a bit and helped. Thank you very much for watching.

What is a CPR (Condominium Property Regime)? was last modified: June 11th, 2020 by Hawaii Living
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