Yesterday, about 100 realtors gathered at the Marriot Hotel and Beach Club in Lihue, HI for our quarterly membership meeting. The most lively discussions occurred around the topic of the VDA. Below are some extemporaneous notes that i jotted down, attempting to keep up with the fervent rate of the questions. At the end of the day, after almost eight years of dialogue, the county has finally passed an ordinance in an attempt to manage Transient Vacation Rentals (anything less than 180 days). The mechanics for the management and the actual way the system is going to work, seems like a total mess at the moment. Realtors shared their various experiences about filling out the newly published forms for transient vacation rentals.
The Kauai.gov site has the application and a press release right on their home page. One of the quirky things the county has done is request that an engineer and architect certify and approve the plans of any VDA outside the VDA area, which non must apply for a non-conforming use certificate AND renew that license yearly. Again, below are my notes from yesterday's meeting.
Vacation Rental Ordinance is now in effect. No new vacation rentals outside the VDA will be allowed. Existing ones will be allowed as long as they register. That TVR form has sparked a lot of dialogue as to what is required to be non conforming. Everyone is required by 10/15 to apply for the non-conforming use certificate. After that date, no other non-conforming uses will be allowed. You should ask, "do you have a non-conformiing use permit" and that needs to be discussed. Otherwise, your client can buy a house that is a legal vacation rental now but may not be in the future.
We are in the initial stages of the process. There are more questions on the form. KBR met with planning department and asked how they plan to manage it.
1. They require a stamped engineer's certification. KBR has expressed the concern that planning has the ability to do this.
This may be a big bump in the road. Ordinance also requires that if you are in the VDA, you must register as well. IT is not the same as being outside the VDA. In order to continue even in the VDA, you must register. Forms have complicated the matter, because planning department currently wants more information than KBR feels is neccessary.
The ag land use that is being discussed is state-land use ag, the planing department will not accept any applications for grandfather status for rentals. The process will be cloudy until 10/15. From 10/15 to March 30th is the time the planning department has to evaluate the applications.
One agent went to hand in an application for a VDA unit, and the planning department refused to take the application saying that the AOAO needed to submit the forms for the whole complex ( as if the AOAOs had already decided to do this).Planning seems to think that the AOAO is going to do this for every condo. This is part of the initial confusion. If you have any problems with this issue and your clients, let the board know because we are hearing different answers from different people. One thing on the form for non-conforming use is the stipulation that the non-conforming use is recorded on the deed.
We are not sure how planning is going to handle it. Planning seems to think they are going to have more employees to handle it.
Registering inside the VDA for the VDA is required by September, but if you do not, you can continue to do business and register later. If you sell a property, the registration use should and does run with the land. However, you are required to re-register every year if you have a non-conforming use permit.
The planning department has no intention to change the VDA lines. Some property owners, like on Lawai road, are seeking to get the lines changed. Tell your clients to get legal assistance. You should not wait around to get the forms filed. We, KBR, are communicating that there are a lot of wrinkles in the bill but DO NOT let your clients wait around. If there are any changes, KBR will get the word around as quickly as possible. Planning is not looking at your old plans. They are looking for any changes between when you got the property and now. Planning is hoping to avoid having to do this themself.
B&Bs require a use permit. There are only 8 legal use permits for B&Bs on this island. Technically, all the rest of them are illegal. B&Bs have not been addressed in this ordinance. They have stopped calling it B&Bs and they call it homestays. Guest house is considered part of the house for this use whether it is attached or not. Technically, all those B&Bs are in violation if they don't have a use permit.
There may be impacts to the county regarding lost revenue. The county and planning department don't seem to care at all. Several homeowners who own on agricultural land may be taking legal action. The form just came out on March 30th.
The official source for VDA are dashed lines labeled time sharing. Registration for units in the VDA only has to be done one time. Forms are available on the opening page of Hawaii.gov. Planning is asking architect and engineer to certify that the use is legal. We are just starting to get a feeling for how architects and engineers are going to react to this. The form has been consolidated into one page for finance and planning. We have proposed three different forms. One for VDA. One for non-conforming. One for multi-family outside VDA before 1982 that are technically grandfathered. One person went into planning with architects and engineers stamped plans from renovations that were only two months old and planning would not accept it. That is not good!
Anything outside the VDA that is not operating now, is not allowed. To re-register an outside the VDA unit, you must show at least 30 days of income for the prior year.
Ron Margolis, RA, CDPE, ABR Hawaii Life Real Estate Services 808.346.7095 email: firstname.lastname@example.org