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Big Island Ban on Timeshare Rentals: Ordinance 18-114

Discussion in 'US - Hawaii Timesharing' started by zerocylinders, Sep 10, 2019.

  1. zerocylinders

    zerocylinders TUG Member

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    We own at Bay Club Villas and typically rent out our week every couple of years through VRBO (we use it the other years). VRBO has informed us that they will take down our listing unless we register. I have looked at the registration requirements under Ordinance 18-114 and it seems almost impossible for an owner (even an owner of a deeded week as in our case) to register... Aside from the ridiculous $500 fee, (1) information for ALL owners at the same location must be provided (including home address which I could never get for every owner), and (2) the landowner must separately provide an authorization.

    This would appear to effectively ban rentals of timeshare units in Hawaii county.

    Has anyone been successfully registered in Hawaii county under this ordinance? If so, how to get around the landowner and other owner information requirements of the form?

    If not, is anyone aware of any law firm who has taken in interest in challenging this ordinance? Given that Hawaii allowed (indeed encouraged) the sale of timeshares as deeded property, this ordinance would seem to be subject to a successful challenge from timeshare owners in the area who are now deprived of an important aspect of ownership.
     
  2. zerocylinders

    zerocylinders TUG Member

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  3. jimwu921

    jimwu921 TUG Member

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    Got the same call. Told them it's the timeshare which is exempt and they bounced :wave:
     
  4. PamMo

    PamMo Tug Review Crew: Rookie TUG Member

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    Sorry, what does "they bounced" mean?
     
  5. jimwu921

    jimwu921 TUG Member

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    It means the timeshare rental ads can still be on vrbo without the need to pay $500 registration.
     
    PamMo likes this.
  6. PamMo

    PamMo Tug Review Crew: Rookie TUG Member

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    Thank you. Good to know.
     
  7. zerocylinders

    zerocylinders TUG Member

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    That is really good news! Are you sure it is exempt? I read through the ordinance and I did not see any exception for timeshares but I could easily have missed something.
     
  8. jimwu921

    jimwu921 TUG Member

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    Thats what the VRBO told me after I stated my case.....
     
  9. easyrider

    easyrider TUG Review Crew: Expert TUG Member

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    I wonder how a timeshare owner renting out a timeshare in Hawaii would not have to pay the GET and TAT which is based off the gross rent. It seems that the mf should be deductible as it is a managers fee of sorts but from what the brochure says it isn't. What the brochure says is to pay the GET and TAT off the gross receipt. Just in case an owner gets stuck paying these taxes it might be a good idea to collect them even if you don't pay them.

    Bill

    http://files.hawaii.gov/tax/legal/brochures/res_rp_brochure.pdf
     
  10. JIMinNC

    JIMinNC TUG Member

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    I only have experience with Hilton and Marriott, so not sure how independent timeshares handle this, but the TAT/GET is generally collected and remitted by the resort, which is a registered entity. We pay TAT whenever we stay on our owned week, a points booking, or an exchange. Like hotels, timeshares generally have a method of collecting/remitting the tax. The problem is with whole-ownership condos rented by their owners who have not registered to pay the tax. That is what the ordinance seems to address.
     
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  11. CalGalTraveler

    CalGalTraveler TUG Member

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    It's interesting how many geos are placing restrictions or banning AirBnB/VRBO. In NYC there is a law (being challenged in court) that bans homeshares but timeshares are exempted because they are considered hotel properties. Probably for the same tax reasons and they don't displace permanent rentals.
     
  12. JIMinNC

    JIMinNC TUG Member

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    In some jurisdictions the opposition is coming for tax collection reasons, and/or political push from hotel operators or hotel labor unions who feel VRBO/AirBnB are operating at an advantage over traditional lodging options. In that sense, the opposition is really no different than the resistance to change seen with taxi drivers and taxi companies trying to put restrictions on Uber/Lyft, or brick-and-mortar retailers who feel Amazon is operating at an unfair advantage. New business models and innovation often face resistance from those whose business models are being altered or replaced.

    However, in the case of VRBO and AirBnB, the problem goes much deeper and starts impacting quality of life in neighborhoods. If you think you are buying a home or condo in a single-family, whole ownership neighborhood and then suddenly find investors buying up nearby houses and condos to rent on AirBnB or VRBO, thus making your neighborhood more transient, that is something that goes straight to quality of life and even safety/security. Also, these trends can tend to drive up housing prices and serve to price people out of buying into the neighborhoods they want to live in. So while I am generally not in favor of governments trying to protect business models that are being displaced/replaced by innovation and entrepreneurship, in the case of short-term rental of houses/condos in what are intended to be single-family, non-rental neighborhoods, I do think local governments have a proper duty to enact restrictions to try to preserve the quality of life of these residents.
     
  13. Henry M.

    Henry M. TUG Member

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    I think it is one thing for an owner to rent out part of a home or even a whole apartment, and quite another to buy up half of a condo building and essentially run a hotel. There is also the problem outlined by JimNC.

    I have enjoyed using VRBO and AirBnB, but I also know of localities where residents are being displaced because short term rentals are making it unaffordable for people to rent or buy a place for long term use. San Francisco and other large cities are examples. This and gentrification are big issues that are difficult to solve.
     
  14. PamMo

    PamMo Tug Review Crew: Rookie TUG Member

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    Much smaller towns are divided over nightly rentals, too. We're househunting in Sedona, and the number of AirBnB homes in some neighborhoods (the Chapel area being just one) is stunning. Residents complain of noise, garbage, and parking problems, but the rentals still multiply. Many homes are listed with their current or potential AirBnB income. Several that we've looked at were bought by investors who turned them into nightly rentals. Housing is very tight for the average family working in Sedona.
     
  15. Ralph Sir Edward

    Ralph Sir Edward TUG Member

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    (from the link:)

    "If this describes your vacation rental, please proceed to the next section, “What do I apply for?” to determine which STVR approvals you will need to apply for. If this does not describe your rental, please contact us at the Planning Department to discuss how the new law may affect your rental."

    I recommend the OP contact the Planning Department and ask how existing timeshares are considered under 18-114.

    I have taken the "bull by the horns" and sent an email asking about the situation. I will inform everybody when (if!) I get an answer.
     
    Last edited: Sep 13, 2019
  16. geist1223

    geist1223 Guest

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    This is way many jurisdictions are looking at banning whole home rentals. Only allowing short term rentals of a room or two and then only if owner lives in home full time.
     
  17. Ralph Sir Edward

    Ralph Sir Edward TUG Member

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    And here is the answer (from the horse's mouth):

    "
    Good afternoon,

    Timeshares are not covered under the Short-Term Vacation Rental (STVR) ordinance, unless they are exclusively being used as STVR's.

    If you require further information, please feel free to contact me.

    Have a great day!

    Hans Santiago
    County of Hawaii, Planning Department
    101 Pauahi Street; Suite 3
    Hilo, Hawaii 96720
    Ph. (808) 961-8165
    Fax. (808) 961-8742
    E-mail: Hans.Santiago@hawaiicounty.gov
    "
    Since most of our timeshares are covered by a "non-commercial" use in our governing docs, they most likely would not be covered by the term "exclusively being used".
     

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