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The Honolulu Advertiser
Posted on: Sunday, February 19, 2006

Land court poses obstacle

By Derrick DePledge
Advertiser Government Writer

Hawai'i's real-estate boom has put more stress on the state Bureau of Conveyances, where workers are more than a year behind in recording documents in the intricate, and some say antiquated, land court registration branch.

The bureau has mostly been able to keep up with documents filed with its regular registration branch, where most of the real-estate transactions in the Islands are recorded. But workers have fallen far behind in filings with the land court branch, a complicated legacy of the Great Mahele of 1848 that requires property to be traced back through its original ownership.

It should take the bureau four to six weeks to certify land court documents but workers are now 12 to 14 months behind, with some bins of mail sitting virtually untouched for months at a time. While the backlog can be inconvenient and frustrating for title companies and homebuyers, it does not appear to have caused any significant disruption to the state's thriving real-estate market.

But it has been another disappointment for the state Department of Land and Natural Resources, which oversees the bureau and has been frequently criticized over the past year for mismanagement and inefficiency.

"What's frustrating for the business community is it's getting worse, not better. To have months and months of unopened mail is beyond belief," said state Rep. Brian Schatz, D-25th (Makiki, Tantalus), who has been critical of the department's overall performance under director Peter Young.

The backlog, which was first reported by Pacific Business News in January, has been blamed on the increased volume of real-estate transactions as the housing market has soared. Over the past five years, according to the bureau, the workload has grown dramatically. In fiscal year 2001, the bureau processed 270,405 documents, but the number surged to 417,687 documents in fiscal 2005. For the land court branch alone, the numbers have increased from 85,966 documents in 2001 to 163,907 documents in 2005.

The bureau has 55 workers, 14 in the regular branch and 28 for land court, with the balance in support services. Schatz has proposed adding nine more workers to the bureau to help with the increased workload.

But some people who have watched the bureau over the years believe dual recording systems and a workforce that is reluctant to change may be responsible for the inefficiency.

Regular registration, which covers most real-estate transactions and other agreements, is a relatively simple procedure where people file documents they need or want recorded by the state. Land court registration, which covers only real property, requires workers to research the history of ownership and provide certificates of title that are legally guaranteed by the state.

The land court system grew out of the Great Mahele of 1848 as a means of settling claims when crown lands began being divided into more modern land titles. Land court registration is required on transactions involving land court property or if people choose to have their property titles guaranteed by the state.

Title insurance, which generally protects buyers from defects in property titles, has led some to question whether cumbersome land court registration is still useful.

Gov. Ben Cayetano had called for phasing out the land court, which is part of the state judiciary, in his 1996 State of the State speech. Hoike Consulting, which was hired by the department to review the bureau after orders from the state Legislature in 2003, asked whether the two systems should be merged for efficiency. Short of a merger, the consultants said, the bureau should break the wall between the regular and land court branches so workers can help each other out when it gets busy, which they do not do today.

The consultants also urged the bureau to outsource its document scanning and indexing functions to the private sector, an idea opposed by the Hawai'i Government Employees Association, the union that represents the bureau's workers. The Hoike report, which came out last June, described some of the bureau's workers as protective of the status quo.

"One obstacle that the bureau needs to overcome is the attitudes of some of the staff and their willingness to change," the consultants wrote.

Robert Masuda, a deputy director at the department who has been working with the bureau, said administrators are committed to following the consultants' recommendations and reducing the backlog.

"We may have a challenge now, but we're on it. We're getting it done," Masuda said.

"We're holding everyone accountable."

Carl Watanabe, the bureau's registrar, is on indefinite leave. Other administrators and people familiar with the bureau describe morale as low, with rivalries that have divided the staff.

Masuda has been praised by some bureau workers and the HGEA for his leadership during a difficult situation. One administrator, who asked not to be named because of tensions at the bureau, believes that the bureau is headed in the right direction but said the land court backlog can be overwhelming. Although she is not aware of any specific complaints, she said the backlog could have ramifications if people have financial or legal problems with their property that have not been officially recorded.

Randy Perreira, the deputy executive director of the HGEA, said poor management and low morale at the bureau have made dealing with the backlog more troublesome. He said the union workers realize that, in the worst cases, the backlog could cost people money or legal problems.

"The employees don't find this to be acceptable," Perreira said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.

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