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House rental being given away as a prize. Legal or illegal?

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Leeds UK
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House rental being given away as a prize. Legal or illegal?

Hi, hope some locals can shed some light on my query.

A TV show over here in the UK is currently running a competition (sweepstake) where part of the prize is a two week trip to Hawaii, staying in a five bedroom house. This is the link to the property in question. The website are one of the prize sponors

pureholidayhomes.com/lanikai-secluded-beach-…

I believe I've also found the same property on Tripadvisor

tripadvisor.co.uk/VacationRentalReview-g6065…

My question is - Can this be supplied legally? And could anybody point me in the right direction to find out the reasons why it is/isn't legal?

I've contacted the TV station and they advised me to get in touch with the prize provider/ sponsor. I've done this and am awaiting their reply.

I can't pretend to know anything on the subject, but I have read a small amount saying that the vast majority of vacation rentals in this area are illegal.

Also, despite the competition being 100% legitimate, there's a free online entry route, but also a method of entry where you get extra entries through a premium rate text/phone call. I'd hate to enter, win, and not feel comfortable taking that part of the prize. I'd feel even worse if I paid for the privellege!

Unfortunately I don't know if I'll ever be able to afford a trip to Hawaii. But I enjoy entering competitions and have previously won trips to NY, Washington DC and Mexico in the past, and Hawaii is definitely on my bucket list and I'd love the opportunity to get over there.

Finally, if it helps any, here's the terms and conditions for the competition. The trip description starts about half way down the page.

itv.com/termsandconditions/…default.html

I'd appreciate your thoughts on the matter. Thanks

Maui
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for Ka'anapali, Haleakala National Park, Maui
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11. Re: House rental being given away as a prize. Legal or illegal?

Aloha,

Also, in the past...the President has evaded the issue by (reportedly) paying for the whole month. Oahu's law is different than neighbor islands'. If one rents for 30 days on Oahu, it's considered a "long term rental". But if one only stays for 2 weeks, a weeks, 17 days........not illegal as long as the location is not rented again during the same time period.

Yes, Frozen--there are many contests to win vacations here. This one is not like those for a number of reasons, as I explained.

Frisco, Texas
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12. Re: House rental being given away as a prize. Legal or illegal?

30 days is what everybody on this board has always said, but I found the following sites (one State of Hawaii site) that says 180.

www6.hawaii.gov/tax/taxfacts/tf96-02.htm

http://www.tfhawaii.org/taxes/tat.html

grassrootinstitute.org/blog/the-facts-behind…

I would love to hear from someone who actually knows. Maybe the cunfusion is why Epic's attornies told him to let it drop!

Maui
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for Ka'anapali, Haleakala National Park, Maui
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13. Re: House rental being given away as a prize. Legal or illegal?

Aloha,

KailuaBred, those are all out of date and way wrong!!! The TAT is higher and has been. Here's the current form and details:

http://www6.hawaii.gov/tax/2011/ta1ins.pdf

You're confusing the tax issue with the zoning one. The "long term rental" definition is a zoning matter. The tax issue is completely different.

Honolulu, Hawaii
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14. Re: House rental being given away as a prize. Legal or illegal?

KB....

Don't confuse State Transient Accommodation Tax issues, with County Land Use issues.

Under State tax laws, a unit is considered transient for tax purposes if it is leased for less than 180 days and/or it is predominately used for non-resident lodging.

In theory, on Oahu one could sign a "residential lease" of one month or more and claim to be a resident, exempting them from the TAT; as long as the unit is generally used for long-term rentals. But if it used for a succession of such short leases, the State would consider it a transient unit anyway.

Under County laws, a lease of one month or more makes a unit a residential one, not transient, and so a TVU certificate is not required.

So, effectively, as long as the owner requires one-month vacation rentals, plays the "Obama" game, or just doesn't rent it out more than once a month or twelve times a year, the County really can't touch them.

However, there has long been talk of closing this loophole.

They couldn't just change the laws for Kailua, it would have to be island-wide.

Frankly, there is not much support from the general public to loosen laws regarding vacation units in residential neighborhoods. The opposition to such is far more vocal and most Oahuans don't want to see our suburbs and rural towns evolve from family towns into vacation villages for visitors (as has happened for example in Hanalei, Kauai).

During the past decade while this controversy has erupted, I can't recall a single politician running for office on a platform of supporting further TVU spread. while many have run on limiting and reducing the "scourge".

Edited: 06 January 2012, 19:40
Frisco, Texas
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15. Re: House rental being given away as a prize. Legal or illegal?

Mahalo, my friend! See you in a few weeks.

Honolulu, Hawaii
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16. Re: House rental being given away as a prize. Legal or illegal?

Amberloo

Your observations and comments are normally “spot-on”, but your legal interpretation of the laws regarding visitor accommodations are in my opinion, misleading.

The City & County of Honolulu does not allow residential-zoned property owners to provide a dwelling unit or lodging unit for compensation to transient occupants for less than 30 days unless a property owner has obtained and kept current a non-conforming use certificate (NUC) for such use. Furthermore, there is no LUO or administrative policy “loophole” that allows residential properties to be rented for less than 30 days regardless if the property is being offered only once a month or has only been rented twelve times or less in a calendar year.

If a residential-zone property owner is intently or knowingly providing transient accommodations for less than 30 days without a NUC, they are violating the law. This would include owners who create “fake” one-month leases or those who rent for a 30 day period and then rebate the guests when they leave prior to the 30 days knowing the guests had no intention to occupy the accommodations for 30 days.

If the City and County of Honolulu is given evidence that proves a residential property owner or their agent intently or knowingly provided transient accommodations for less than 30 days, the property shall be treated as an illegal-use and a notice of violation will be issued. If the violation is not corrected, a notice of order will be issued and the property owner will be subjected to fines of up to $1000 per day until the violation is corrected.

Example: A visitor contacts a property owner or their agent offering a vacation rental in a residential-zoned neighborhood and the guest requests accommodations for two weeks, the property owner agrees to provide them with accommodations for the two weeks, but creates a 30 day contract. The visitor provides evidence to the City that they requested and only occupied the property for two weeks and compensated the owner. Since the property owner intently or knowingly provided less than thirty day accommodations for compensation, a violation has occurred regardless that they have a 30 day contract. The contract is only evidence and as such could be invalidated by other evidence.

Operators of illegal vacation rentals and many unscrupulous realtors have promoted the myth that a “legal” loophole for providing less than 30 days visitor accommodations in residential zoning exists, but that’s not the case.

Your reference to the “Obama” rental being considered “allowed” is a good example that there is no loophole. Last year, the Civil Beat news website reported the Obama rental was illegal. The owner had boasted to the reporter that he intently provided a less than 30 day stay to the President, but claimed it was “allowed” since he was not going to rent it to anyone else for a 30 day period. After being shown the article, the director of the Department of Planning and Permitting issued a strong warning to the owner. The owner wisely decided not to rent to the President this year.

I do agree with your statement that the majority of politicians and residents for that matter do not want to see a proliferation of visitor accommodations in residential zoned neighborhoods. These hospitality businesses are better suited for resort-zoned districts. In my opinion, allowing visitor accommodations in residential-zoning reduces an already challenging housing supply for residents to afford and negatively alters the social fabric of a neighborhood by displacing neighbors with a revolving door of visitors who have no vested interest in the neighborhood or the neighbors.

Honolulu, Hawaii
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17. Re: House rental being given away as a prize. Legal or illegal?

Very well written and insightful, my friend...

I am in no way advocating, supporting or rendering a legal opinion regarding the validity of the arguments forwarded by unlicensed unit owners, their supporters and attorneys.

Just noting what their reasoning (rationalization) is for exploiting and maximizing the percieved 30 day/12 times a year loophole so many rely on.

The number of luxury condo units in Kakaako rented to month-long visitors is staggering as well, and all insist they are legal under said logic.

Until there are a few high profile "busts" and successful prosecutions of owners for taking the loophole route, it is going to remain part of the marketplace.

By the way, I am totally against TVUs outdide of zoned areas, licensed or unlicensed; that's why we have such a onerous rntitlement process in the first place.

Edited: 14 January 2012, 00:31
Maui
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18. Re: House rental being given away as a prize. Legal or illegal?

Aloha,

I agree with Amberloo-very interesting and thoughtful post.

I particularly agree with your last paragraph.

Napa, California
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19. Re: House rental being given away as a prize. Legal or illegal?

To complicate the arguement further, if the owners of the house are donating the time for the contest, would it be considered a rental at all?

20. Re: House rental being given away as a prize. Legal or illegal?

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