Working with Entities in Hawaii Real Estate: What You Need to Know

In Hawaii real estate, it’s increasingly common for buyers and sellers to hold property in an entity like an LLC or corporation. While these structures offer various benefits—such as liability protection and tax advantages—they also add layers of complexity when it comes to escrow, title, and closing. Whether you’re a buyer forming an entity or a seller holding property in one, understanding the documentation and timing involved is essential for a smooth transaction.

What Is an Entity?

Entities typically involved in real estate transactions include:

• LLCs (Limited Liability Companies)

• Corporations

• Trusts (Note: Trusts are not covered in this summary)

Key Questions to Ask When Working With Entities:

1. Has the entity been created yet?

2. Is the entity registered—and if so, where?

If the entity is not registered in the State of Hawaii, delays are likely. Title insurance cannot be issued unless the entity is active and in good standing.

Buyers Forming an Entity? Start Early.

If your buyer is planning to purchase through an LLC or corporation, they should begin the formation and registration process before opening escrow. Documents will often need to be drafted by an attorney and submitted to the appropriate state or country for approval.

Required Documents for Entities

For Corporations, the following are typically required:

• Proof of Registration

• Corporate Resolution

Proof of Registration:
Hawaii-based corporations must be actively registered with the Department of Commerce and Consumer Affairs (DCCA). Out-of-state corporations must provide a current Certificate of Good Standing from their state or country of origin, dated within the calendar year of recording.

Corporate Resolution:
This document designates who is authorized to act and sign on behalf of the corporation. It’s required for both sales and purchases and must be current and clear.

For LLCs, the required documents include:

• Proof of Registration

• Articles of Incorporation

• Operating Agreement

• Corporate Resolution (if needed)

Articles of Incorporation outline:

• The LLC’s name and mailing address

• Names of members

• Designation of a managing agent

Operating Agreement defines:

• The LLC’s purpose

• Member roles

• Authority and powers of the Managing Agent

If the Operating Agreement lacks clarity or restricts authority, a Corporate Resolution will be required to confirm who can sign for the entity. Importantly, the person authorizing the Corporate Resolution cannot be the same person who is designated as the signer.

What Is a Layered Entity?

A layered entity is a structure where one entity owns or controls another. In this case, additional documentation is required for each layer of ownership, including:

• Proof of Registration

• Articles of Incorporation

• Operating Agreements

• Corporate Resolutions (if needed)

Why It Matters

Title insurance cannot be issued—and a property cannot close—if the entity involved is not properly registered and authorized. Delays in obtaining documentation or unclear authority can push back closings or even derail a transaction.

How to Prepare Your Clients

1. Confirm Entity Registration
   Ensure the LLC or corporation is registered and active in the state (or country) of origin.

2. Gather Required Documentation Early
   Start the process of gathering Articles of Incorporation, Operating Agreements, and Resolutions prior to opening escrow.

3. Identify the Authorized Signer
   This individual must be clearly named and documented to sign contracts, conveyances, and loan documents.

Work with Experienced Escrow Officers

For guidance on handling transactions involving entities, the expert team at Title Guaranty Kamuela is ready to assist:

Casey Tanigawa – Branch Manager
📧 ctanigawa@tghawaii.com | 📞 (808) 260-5673

Amber Joaquin – Escrow Officer
📧 ajoaquin@tghawaii.com | 📞 (808) 887-6009

Rae-Ann Ontiveros – Escrow Officer
📧 rontiveros@tghawaii.com | 📞 (808) 769-5813

Rachel Acia – Escrow Officer
📧 Rachel.Acia@tghawaii.com | 📞 (808) 887-6035

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