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I have some new numbers below that might be more instructive if shown in your graphs. It is my belief that there certainly is factual and recent historical statistical evidence supporting a concern of the Condominium segment of the real estate market to not be able to "absorb" this shock and particpate in a housing market recovery. The March uptick is indeed strong, and it is also an anomaly when taken in context of the whole, so it is more aptly described as the data point that one should be leary of basing any predictions upon. Taking a longer look, ie the last 6 quarters with the new March data available, one sees that the market has been trending downwards
Q3'10 138 M$s
Aside from the obvious rally in Q2 2011, and yet including it, this is downward trend. A look back in time shows that there was a similar "rally" in Q2 of 2010, however in Q2 2009, there was no such Q2 rally. So, what's ahead for Q2 of 2012? We know that some buyers have stalled decisions to invest, and it is true that the magnitude of the impact is not known and people can offer their own speculations of how seriously potential buyers will consider the impacts of this legislation until the law comes down forcefully and clearly in citing this as violation of NAFTA and US Constitutional rights so that future buyers will feel safe to enter into this market.
Below are the sections in Hawaii real estate law pertaining to Sellers disclosures, and this pending litigation is considered a "Material Fact" which my attorney and financial advisor has stated "will likely have measureable and perhaps significant adverse impact on the value" of properties which are vacation rental zoned.
§508D-5 Delivery of disclosure statement to buyer; procedures.
No later than ten calendar days from acceptance of a real estate purchase contract, the seller, either directly or through the seller’s agent, shall provide the disclosure statement to the buyer.
Upon receipt of the disclosure statement, the buyer shall have fifteen calendar days to:
1.Examine the disclosure statement; and
2.Decide whether to rescind the real estate purchase contract.
If the buyer decides to rescind the real estate purchase contract, the buyer shall deliver to the seller directly or through the seller’s agent within the fifteen-day period written notification of the buyer’s decision to rescind the real estate purchase contract. Failure to deliver the written notification to the seller within the fifteen-day period shall be deemed an acceptance of the disclosure statement. Any rescission made pursuant to this subsection shall be without loss of deposits to the buyer which deposits shall be immediately returned to the buyer.
The seller and buyer may agree in writing to reduce or extend the time period provided for the delivery or examination and rescission period. The form of the receipt for the disclosure statement required by section 508D-4(2) shall provide that the buyer shall have the right to examine the disclosure statement and to rescind the real estate purchase contract in accordance with this section.
[L 1994, c 214, pt of §2; am L 1996, c 161, §5]
§508D-6 Later discovered inaccurate information.
Prior to closing the real estate purchase contract, a buyer who receives a disclosure statement that fails to disclose a material fact or contains an inaccurate assertion that directly, substantially, and adversely affects the value of the residential real property, and who was not aware of the foregoing failure or inaccuracy, may elect in writing to rescind the real estate purchase contract within fifteen calendar days of the earlier to occur of:
1.The discovery of the failure or inaccuracy; or
2.The receipt of an amended disclosure statement correcting the failure or inaccuracy, in the manner provided by section 508D-5(b) or (c).
The buyer’s right to rescind the real estate purchase contract under this section shall not apply if the sale of the residential real property has been recorded; provided that the buyer may pursue all additional remedies provided by law.
[L 1994, c 214, pt of §2; am L 1996, c 161, §6; am L 2001, c 224, §3]
Good points. Someone may want to pen an op-ed on this, to be ready if these bills are passed this week. Buyers have a right to know, in plan language, how the legislation will affect them should they care to rent out their properties as TVRs. The potential effects that the legislation and legal suits could have on the value of the property, even if they don't want to rent it out, would also need to be disclosed and in plain language.
We may all be about to get a lesson in US Constitutional Law and the US legal system. I have not studied the constitution since high school and did not spend much time on it then.
From what I have seen so far, most members of the Hawaiian legislature have spent even less time studying the Constitution than I have.
If the HI legislature passes these bills, it will be a memorable process and an interesting expereience. In the end the US Constitution will prevail.
Brought a chuckle to me with my morning cup of joe!
"From what I have seen so far, most members of the Hawaiian legislature have spent even less time studying the Constitution than I have. "
Could also be woven into that Op-ed piece.
After much ignoring or ignorance, we honestly could not tell which, of our ongoing written testimonies citing concerns of NAFTA and US Constitutional violations, one TVR owner finally said: " From what I have seen so far, most members of the Hawaiian legislature have spent even less time studying the Constitution than I have."
Do I have permission to cite that or are you going to copyright it? I think it shall be used a lot in the weeks to come. It may make for a great t-shirt for the Maui Swap meet.
You really have 2 Op-eds here, one on why legislators should have a passing familiarity with the Constitution and Bill of Rights, the other on what Hawaii Real Estate agents and Sellers now need to disclose as "material facts" to Buyers.
Your point about 2 Op-eds... How sad but true!
In the new t-shirt line, however, I don't think the stuff about the "material facts" will be as big a seller as the "constitutional familiarity".
jwe - do you think that RBOAA would like an exclusive on the t-shirts or should we sell them at Maui Swap Meet, maybe a popular shirt for the pre-election "I VOTE" series?
In addition to the 6 quarter review of the Condominium Sales' perspective, a good overlay into that is the same 6 quarters of residential home sales on Maui where the numbers are as follows:
Q3'10 179 M$s
This overlay shows that while condomium and residential home sales were in rough relation of tracking each other upto and including Q2 2011, from that point they separated with residential home sales outperforming condominium sales by $193M over a 3 quarter timeframe from July 2011 through March 2012. Clearly the condominium segment is under distress. I don't yet understand the factors, just see the results in the financials.
It is quite shocking that the Real Estate interests (the sales side, not the PM side) have seemingly not intervened to prevent the bill to pass the senate vote this afternoon.
Does anybody know what the legal battle will cost, and about how many folks might pitch-in to cover costs?
Does anybody know of a good firm that has a good track record suing the state (I found one... but didn't look into what there case was about)?
I was thinking of similar issues other businesses are dealing with, who might want to join in. I know this is a long shot, but VoIP companies can't get access to or handle numbers in the 808 area code unless they have an on-island presence. For example Google Voice can't deal with 808 numbers due to the on-island presence restriction. Maybe we could enlist some deep pockets like Google to take on "on-island" restraint of trade Hawaiian laws?
@blackburied. You might be getting ahead of yourself here. I believe that
this will have to go to the governor to sign so I would think that our next step
is to let the governor know our thoughts and that they will be taken to court
over this. Unfortunately, some damage has already been done than can probably
never be undone. Any thoughts on this people?
Generally, the next step once legislation has been approved by the legislative bodies, is for the proposed legislation to be reviewed by the attorney general, for verification that the legislation is legal, and will pass court challenge. Then, if the AG signs off on the legislation, it moves to the governor office, where the governor policy office reviews the legislation, to determine if the governor wants to sign the legislation (which is generally a political decision). At least this is the process in the state that I reside in, and I presume it is similar in Hawaii.