Maui Vacation Rentals

Federal suit filed to block TVR crackdown

The following Article was posted last Saturday by the Maui News.. It is a good thing to see the county challenged on this issue. It’s not fair to see how the county for so many years allow vacation rentals then just up and shut them down. For the TRV owners with a slow real estate market it really puts them in hardship. Also to up and shut them down with out a fair process of allowing them to get permitted in a fair amount of time with a realistic permitting process is crazy. You have local families that use vacation rental, returning friends of friends and families. People that come here for temporary work assignments and people that are not interested in a condo or hotel. It also hurts the windsurf companies that rent gear or car packages. The local restaurants suffer for loss of visiting guest. I am seeing Maui homes for sale because of the sudden change in policy by the County of Maui. So here is the following article by Harry Eagar.
HONOLULU – The Maui Vacation Rental Association turned to U.S. District Court Friday to seek an injunction against the county’s enforcement actions that will otherwise shut down almost all the short-term rentals on Maui.
The county was on notice that MVRA planned to go to court. Planning Director Jeff Hunt, who is named as an individual in the complaint, was told about the plans at a forum at Iao Theater two weeks ago. County spokeswoman Mahina Martin said the county had not been served with the complaint as of late Friday and would reserve comment until it could be reviewed.
The complaint alleges lack of due process and equal protection of the laws, equitable estoppel, breach of contract, failure to adequately train employees, and maintenance of illegal customs and policies. The lawsuit was filed by attorney James Fosbinder, who already has several federal suits active against the county government on other matters.
Some MVRA members have estimated that the county’s liability on the equitable estoppel claim could hit $100 million. That is speculative, based on an assumed $200,000 loss of business by 500 operators.
However, it gives an idea of what the TVR operators think their contribution to the island’s business sector means.
Equitable estoppel is the legal doctrine that allows claims for damages based on government assurances, even if those assurances are later found to be defective.
According to the complaint in 1995, the county considered legislation to regulate home occupations of all kinds. A comprehensive ordinance did not result, but a bed-and-breakfast ordinance was passed in 1997.
Many would-be TVR operations could never hope to get a B&B permit, either because their zoning was wrong or because their guest rooms were not in the same building as the operator’s personal dwelling.
According to the suit: “Following the passage of the B&B ordinance in 1997, the planning department advised callers not to bother applying for permits for TVRs, because, new, less-burdensome regulations were being formulated.
Unpermitted operators believe they were “in compliance,” the suit says, both because the county was not pursuing notices of violation against them, but also because the county Office of Economic Development “actively promoted and encouraged the growth of TVRs.”
Until 2001, the county enforcement policy was a form of don’t-ask-don’t-tell, because it did not usually investigate without a complaint (which could be submitted anonymously).
John Min, then the planning director, undertook a more active policy, but “after a council meeting, Director Min agreed to stop initiating enforcement actions when there had been no complaint.”
Min also set up a “moratorium policy,” by which operators were left alone if they had submitted permit applications as long as those remained pending.
Virtually all remained pending, as very few applications were acted. The reason for this, the suit claims, is that then-Council Member Wayne Nishiki stopped handling them in his Land Use Committee in 2001.
The suit says the reason apparently was “the length of time it was taking to complete the processing of each application.”
Eventually about 80 applications were filed, representing perhaps 10 percent of all the TVRs thought to be operating in the county.
The lawsuit calls the “moratorium policy” a virtual “plea bargain for persons otherwise in violation of laws with criminal penalties.”
The policy was written and signed by Min and David Dantes, then the vice president, now the president of MVRA. Fosbinder characterizes the document as a “contract.”
Dantes was among the first to apply, but although the suit says he spent $15,000 on his permit and got past the Maui Planning Commission successfully in 2002, the Land Use Committee sat on his papers for four years.
Now that the administration of Mayor Charmaine Tavares has changed course, deciding to crack down on unpermitted TVRs, those operations must shut down by Jan. 1.
Because there isn’t enough time for the operations to get permits to operate legally, the county’s action will effectively put transient vacation rentals out of business, the lawsuit says.
The suit also attacks the alleged “custom” of using written “enforcement policies . . . many of which are presented to the public as modifying or overriding existing legislation.”
Since the county can change these written policies “at whim,” citizens who rely on them can find themselves on the wrong side of an interpretation, a violation of due process, the lawsuit says.
The suit asks a judge to allow MVRA members to conduct their businesses, and it seeks a court order for the county to honor to its written agreements. The lawsuit also wants the county to pay court fees and costs and provide other appropriate relief.


Steven Nickens
Nickens team
Coldwell banker Island Properties
The Shops at Wailea
3750 Wailea Alanui, Suite B-35
Wailea Maui,Hawaii, 96753
Fax 808-674-8626
www.nickensmaui.com
email: nickens@maui.net