Sunday, March 25, 2012

Hawaii's Deferred Senate Bill 2089 Resurrected in House Bill 2078

Kauai, photo by KJ Konkin
Kauai, photo by KJ Konkin

Hawaii's Senate Tourism Committee debated HB2078 on Thursday March 22, 2012 and amended it to include the highly controversial language of SB2089, a bill which had been deferred and effectively neutralized March 12. The legislation requiring vacation rental owners to hire professional property managers to pay their taxes for them has found new life in HB2078, and will now move to the Consumer Protection Committee for possible enactment July 1, 2012.

Vacation Rentals By Owner in Hawaii

HB2078 initially focused on requiring vacation rental owners to have their ads, including website ads, display their Tax number  and the name of an on-site contact. The State's goal is to protect consumers, however, they could solve the problem more simply by requiring owners to post the name and phone number of their designated local contact inside the property and on rental documents.

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The real danger inherent in the bill is that anyone viewing an internet ad divulging a property owner's registration number can then obtain his personal contact information from the public Tax Department License Checking page, also easily available through the internet. This poses a serious risk to the vacation rental business owner for identity theft, burglary and/or vandalism. Since the owner is off-island, properties can be cased and then robbed when vacant. Registration numbers may also be used fraudulently by other establishments that are not licensed. Forty-three percent of Hawaii's housing involve rentals.

Rental By Owner Awareness Association

Property owners and visitors to Hawaii need to be aware of a serious effort among some real estate property managers to insert themselves between visitors to the islands and the proprietors of transient vacation rental homes, to manage their bookings and pay their taxes while charging a thirty to forty percent commission. However, many vacation rental businesses prefer to manage their operations themselves and do not need or want to use real estate professionals. All owners must have on-site help to successfully manage their vacation rentals, but their staffs may be housekeepers, repairmen, or just trusted neighbors or family members.
Kaneohe, photo by Jason Gomez
Kaneohe, photo by Jason Gomez

Groups like KIK, SON and The BnB Coalition also oppose any new laws that would help the vacation rental industry. The BnB Coalition states on their website that "over the past few years, a rash of illegal B&B's and TVU's have sprung up in Oahu's residential neighborhoods. They are an unwelcome and destabilizing influence in our otherwise desirable suburban areas." However, these groups hold a minority viewpoint. Overwhelming testimony on the State Legislature's website supports the rights of property owners to conduct business and the need to update laws concerning the permit process that has been stagnant since 1989.

The anti-tourist sentiment of a few locals continues to bubble up in new bills, but a grass roots organization, Rental By Owner Awareness Association (RBOAA), has sprouted, composed of property owners who live off island. Membership fees are used to hire attorneys, lobbyists, public relations and office personnel. The organization aims to monitor proposed legislation, foster communications among property owners and educate the residents of the State of Hawaii and government officials about their industry.
The leaders of Hawaii have apparently mobilized a sleeping giant. RBOAA will unite individuals around the globe who love the islands as much as locals do, ensuring their voice is heard.


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