A Look at Current Hawaii Vacation Rental Laws

By
Real Estate Services with Waikoloa Vacation Rentals

hawaii vacation rental lawsA week ago I posted a blog about a bill that is before the State of Hawaii regarding vacation rentals.  All the feedback I received was really interesting.  What I did realize was how many people do not even know what the current policies are. 

The current policies are hard to understand so that is why I believe some people are pushing for new bills to be passed to clarify things.  The current law out there is HRS 467.  Below are the items relating to property management.

 

""Real estate broker" means any person who, for compensation or a valuable consideration, sells or offers to sell, buys or offers to buy, or negotiates the purchase or sale or exchange of real estate, or lists, or solicits for prospective purchasers, or who leases or offers to lease, or rents or offers to rent, or manages or offers to manage, any real estate, or the improvements thereon, for others, as a whole or partial vocation."

"Exceptions. The provisions requiring licensing as a real estate broker or salesperson shall not apply:
(1) To any individual who, as owner of any real estate or acting under power of attorney from the owner, performs any of the acts enumerated in the definitions of real estate broker and real estate salesperson with reference to the real estate; provided that the term "owner" as used in this paragraph shall not include any individual engaged in the business of real estate development or brokerage or include an individual who acquires any interest in any real estate for the purpose or as a means of evading the licensing requirements of this chapter; and provided further that the term individual "acting under power of attorney" as used in this paragraph shall not include any individual engaged in the business of real estate development or brokerage or any individual who acts under a power of attorney for the purpose or as a means of evading the licensing requirements of this chapter;
(2) To any person acting as a receiver, trustee in bankruptcy, personal representative, or trustee acting under any trust agreement, deed of trust, or will, or otherwise acting under any order of authorization of any court;
(3) To any individual who leases, offers to lease, rents, or offers to rent, any real estate or the improvements thereon of which the individual is the custodian or caretaker."

""Custodian or caretaker" means any individual, who for compensation or valuable consideration, is employed as an employee by a single owner and has the responsibility to manage or care for that real property left in the individual's trust; provided that the term "custodian" or "caretaker" shall not include any individual who leases or offers to lease, or rents or offers to rent, any real estate for more than a single owner."

""Property Management" means the process of managing property that is available for lease by maintaining and handling all the day-to-day activites that are centered around the piece of real estate. Property management may involve seeking out tenants to occupy the space, collecting monthly rental payment, maintaining the property, interacting with tenants, and upkeep of the grounds."

 

If you are like me, the first dozen times you read that it makes no sense.  I decided to call RICO and the Real Estate Commission to get what it all means and, to be honest, I could not get cosistent details from them relating to certain circumstances.  Here is what they said relating to management (in the sense of taking care of the property):

An owner can hire someone unlicensed to take care of their property, but that person has to be solely employed by that owner and can not work for any other owners.  There are two other uncommon exceptions mentioned above.   

**If you have any questions relating to certain details of this law please contact RICO or the Real Estate Commission in Hawaii.  As I mentioned above I found it hard myself to understand everything. 

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Topic:
ActiveRain Community
Location:
Hawaii
Groups:
Hawaii Real Estate Professionals
Property Management
Vacation and Second homes
Vacation Home Rentals
Tags:
hawaii vacation rental laws

Comments 3 New Comment

Anonymous #1
Anonymous
Gene

Rob, I think you are just wrong on this.  The old law clearly says that an individual owner may perform all the functions of licensed real estate agent for their own properties.   And that owner can then hire out all the other necessary (non real estate agent) functions to ensure a good experience for their renters, including housekeeping, repairs, locksmiths, etc.

The new law completely changes this.

Nothing in the present law requires an owner to have a local "manager".    Telephones and computers make it perfectly reasonable and possible to manage from anywhere.   The new law makes this illegal.   It is a huge change and not for the better.

February 13, 2012 10:16 AM
Anonymous #3
Anonymous
Kristin

Rob, I am so confused by your question.  Are you suggesting that there are illegal ways or legal ways about who is going to to unlock the door or go buy a coffee maker.  Who cares who does it?  As long as the owner gets it done.  Those are normal things that happen whether you are on island or off island.  Is there something in the "current law" that says you have to use a certain person to handle your two questions?  What if I have a neighbor that unlocks the door if there were any problems?  Is that illegal? What If I called the maintenance guy and he took care of it?  Is that illegal?  Isn't the bigger and more important thing here taxes? 

February 13, 2012 05:10 PM
Anonymous #5
Anonymous
AJ Horowitz

Rob,

Example.  Toliet gets clogged.  Plumber gets called.  Why is it a problem if my housekeeper calls and meets the plumber - just because she does housekeeping, it does not forbid her for doing other things that I direct her to do and pay her for.  Why is a licensed professional more qualified to call a plumber?

February 13, 2012 07:21 PM
Rainmaker
62,615

Rob Dalton

Big Island Vacation Rental Guru
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Additional Information

I own a vacation rental business at Waikoloa Beach Resort on the Big Island of Hawaii. You will enjoy information about Waikoloa, industry news, as well as info on my vacation rentals and company. Since owning Waikoloa Vacation Rentals I also got into the online marketing aspect of the business. From time to time I will blog about industry news and information related to online marketing.