Hawaii Real Estate State Practice Exam

What must occur before a deed can be recorded at the Bureau of Conveyances?

1. The conveyance tax must be paid

2. The buyer must sign the deed

3. The escrow company must be paid

4. Any agreed repairs must be completed

The correct answer is: The conveyance tax must be paid

For a deed to be recorded at the Bureau of Conveyances in Hawaii, it is essential that the conveyance tax be paid. This tax is a requirement set by the state to ensure compliance with real estate transfer regulations. When a property is transferred, this tax must be calculated based on the property's value, and proof of payment must accompany the deed when it is submitted for recording. This requirement serves several purposes, including generating revenue for the state and ensuring that all property transactions are documented and made part of the public record in a complete and legally compliant manner. Failure to pay the conveyance tax would result in the inability to record the deed, thus preventing the legal transfer of property ownership from being acknowledged by the state. While it may be important for the buyer to sign the deed, for the escrow company to be paid, or for any repairs to be completed as part of the transaction process, these actions do not directly relate to the recording of the deed itself. The payment of the conveyance tax is the specific legal requirement that ensures the deed can be officially recorded.