Rob Dalton

A 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.

2011 offered another positive year for the vacation rental industry in Hawaii. WIth increases in both the overall tourism and the use of vacation rentals, the vacation rental industry saw the most growth of any of the accommodation types in Hawaii.

The Hawaii Tourism Authority reported a 3.5% growth in visitors to Hawaii from 2010 to 2011. Of all the Hawaiian Islands, the Big Island and Kauai had the largest increases, but Maui and Oahi still remain the two most popular islands to visit in Hawaii.

For accommodation types, vacation rentals had the largest growth. This is two years in a row the vacation rental industry has had substantial growth in Hawaii. Marketing as well as economic factors have played a large role. The only accommodations that saw a dip in use were timeshares.

Along with visitors bring up, their average spending and length of stay grew. December 2011 was the best month on record for visitor spending in Hawaii.

With prelimenary reports showing January 2012 being significantly better than January 2011, it appears that the tourism industry in Hawaii is still on the rise.

For years now I have been trying to figure out a way to stabilize the vacation rental industry in Hawaii. It has gotten so out of control with VRBOs (Vacation Rentals By Owners), etc that no one even knows what is legal anymore. The current laws are not very clear and are left for misinterpretation. I have posted blogs throughout the web and have found many Hawaii real estate professionals in agreeance with me.

Just recently a bill was brought forth to the Hawaii House and is in the process of being reviewed. You can click here to view the bill. It will require all non-resident vacation home owners, owners that do not live on the island where there vacation rental is, to use a licensed real estate broker or salesperson for their vacation rental. If it is passed it would be a huge step forward for the State of Hawaii to regulate the vacation rental industry.

If the owners do not comply, there is a substantial fine (up to $1000/night).

I believe what this bill is trying to address are the people acting as licensed agents that are not. Currently in the State of Hawaii you have to have a license to property manage. Housekeepers, maintenance men, etc can not property manage unless they are licensed to do so. I would assume a better definition of property management is soon to come.

I am fine with VRBOs as long as they are adhering to the current policies, which would be to follow the current guidelines. I have seen owners pay a licensed agent $75/guest to manage the property so it is not that expensive to stay within the law.

I think this will help the vacation rental community in Hawaii substanitally on several different levels. First, if licensed professionals are required to be used they will maintain the current ethics required or could potentially have to forfeit their license. Currently most vacation rental homeowners "caretakers" don't even know what those ethics or regulations are. Second, the State of Hawaii will collect on more taxes. Third, I feel it will raise overall rates and quality due to more standards.

Let me know what you think. Leave a comment if you support HB 1707. Let us know why it is a bad idea if you are against it.

**Just a clarification based on some comments below. I am not against VRBOs in Hawaii. I am for VRBOs in Hawaii having to abide by the same regulations that the professionals in the vacation rental industry in Hawaii have to.

See below some previous posts I posted regarding this topic:

The State of Hawaii's Voluntary Neglect Costing Taxpayers Millions

Who is Responsible for Adhering to Vacation Rental Laws in Hawaii?

Since Google+ was released good has been moving towards a more personalized search. This week they formally annouced it as "Search plus Your World". Here is some things it has to offer.

1) You have the option to choose if you want a normal search results or if you want it to include the personalized search results.

2) It will show images you have uploaded via Picassa or friends or you have shared on +1.

3) It will show related posts from your +1 circles or your posts.

I am not sure how I will use this yet. The only downside I see is that I really wish they would have merged with Facebook somehow rather than start Google+. You really have to be involved in Google+ for this fuction to be useful to you. So many people are already involved in Facebook that I think if they had included info from them it would be a more useful feature.

Here is what the new search results look like with Search plus Your World.

Check out googles page here as to what it is all about.

Let me know what you think.

With the continuing struggles of the economy not many investment properties are having any success. Of the many properties we manage at on the Big Island of Hawaii, Kolea at Waikoloa Beach Resort is the only one that seems to be on the rise.

Kolea is a luxury beachfront community offering 2 and 3 bedroom villas. While the property as a whole has seen success, the spacious "front row" three bedroom villas have seen the biggest rise in popularity, which is a bit astouding given that many would think less expensive properties would have more success.

These villas are over 2000 square feet and offer the best views Kolea has to offer. The most popular aspect of these villas is that they all are less than a three minute walk from the Kolea Beach Club, which offers direct beach access. The rates range in price from $475/night to $600/night.

Along with the popularity on the rise of these vacation rentals, the real estate interest is also on the rise. It is the only community at Waikoloa Beach Resort that has currently no extremely low short sales or foreclosures on the market. All of those were picked up over the last year and Kolea seems to now have a more balanced market.

With Kolea being where most of our business is, we look forward to the continue success of the property and look to continue to expand. View our selection of Kolea vacation rentals.