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a. Advanta4es. <br /> (1) Landlord/Tenant. See discussion above. <br /> (2) Control. See discussion above. <br /> (3) Consideration. Snce the Property would be <br /> conveyed before the subdivision process is complete, Hamakua <br /> fio„~,:iag_~gy_still be able to charge a monthly fee to S~*e <br /> Cccuoar~ts. This fee could to the same as the monthly rent whict^. <br /> is currently being charged, but characterized as payment for the <br /> purch~sp.of the Property. The more that payments are <br /> characterized as purchase price for the Property, the less <br /> likelihood that a severance pay is_.ue will arise. For example, <br /> i'f 8100 per. month _is__a1~9ca~gd towards _the_ purchase price of a <br /> House and it takes three years until subdivision is completed, a <br /> total of S3, 6Q D. will~be paid towards the purchase price. If it <br /> is determined that th_e receipt of the Property is severance pay, <br /> the additional income to the Occupant will be limited to the. <br /> di~~ference between-the fair market value and the X3,600 paid by <br /> ~t:ie-Occupant . <br /> b. Disadvanta4es. <br /> (I) Tax. See discussion above. There may be more of <br /> a severance pay issue under L•his alternative since the Property <br /> will be immediately conveyed to the Occupants. <br /> (2) Conveyance. Under this alternative, the Property ' <br /> would be conveyed to the Employees prior to subdivision. This is <br /> in violation of the Hawaii County Code which prohibits the sale <br /> of ur..subdivided real property. The purchaser ~ unsu=ivided <br /> real property will have the right to rind the transaction. <br /> - In this case, i*_.is_unli:;ely that the Occupants will <br /> rescind the transaction. because they will be receiving the <br /> Property for little a~ no consideration. T e `s risk, <br /> however, that if chalie_nged, a.ll__of the agreements of sa a may be <br /> voided by a court. If this__were to occur, it is possible that a <br /> c~y~.t could find_ that the 0 cu~ants are a_ ctual ~ ..~~nts of„ec <br /> Hamakua Housing since there i5 -no' bi "'n a ` <br /> discussion above regarding Landlor /Tenant issues. <br /> Although the agreement of sale will convey a Property <br /> to each Occupant, the Cccupar.t will be unable to reconvey, <br /> mortga3e cr otherwise transfer or enccmber the Property due to <br /> the lack--of a legal description of the Property. This may result <br /> in resentment among the Occupants, as thay ma}~ feel entitled to <br /> <br /> an unrestricted ability to deal with the Property. <br /> <br /> c::~,ac.~.~r - G- <br /> <br />