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The thought is we have to have someone on island that can manage our place. That person falls under the caretaker exception in HRS 467. Read the article above to see the definition of caretaker. Here is the catch I have not seen yet. As long as we have somone on island we are not doing anything wrong. It would be our housekeeper that is doing something wrong. To me the worst case scenerio, is they actually enforce the rule and we have to do something else.Also I always thought property management was renting a place. If you look at the definition it includes "maintaining". I think they have their mind up.......now the big question is will they enforce it. They haven't before.
The point in this article is only relevant if the agent is being asked to perform the functions as allowed under HRS 67. In our case the owner is legitimately performing the management functions. The "agent" as defined in HB 2078 does not have this right any more than they have the right to be the property manager for any (short or long term) property. The key to all this is who is the property manager in the case of owner operated transient rentals. That would be the owner, as they offer/negotiate the rental. The bottom line is there is nothing here to enforce for an owner managed rental operation.
Owners fall under exception 1 of the clause below. In the case of an owner "managed" property, exception 3 is irrelevant, because exception has already been granted under exception 1.
"Exceptions. The provisions requiring licensing as a real estate broker or salesperson shall not apply:
1. To any individual who, as owner of any real estate or acting under power of attorney from the owner, performs any of the acts enumerated in the definitions of real estate broker and real estate salesperson with reference to the real estate; provided that the term "owner" as used in this paragraph shall not include any individual engaged in the business of real estate development or brokerage or include an individual who acquires any interest in any real estate for the purpose or as a means of evading the licensing requirements of this chapter; and provided further that the term individual "acting under power of attorney" as used in this paragraph shall not include any individual engaged in the business of real estate development or brokerage or any individual who acts under a power of attorney for the purpose or as a means of evading the licensing requirements of this chapter;
2. To any person acting as a receiver, trustee in bankruptcy, personal representative, or trustee acting under any trust agreement, deed of trust, or will, or otherwise acting under any order of authorization of any court;
3. To any individual who leases, offers to lease, rents, or offers to rent, any real estate or the improvements thereon of which the individual is the custodian or caretaker."
"Custodian or caretaker" means any individual, who for compensation or valuable consideration, is employed as an employee by a single owner and has the responsibility to manage or care for that real property left in the individual's trust; provided that the term "custodian" or "caretaker" shall not include any individual who leases or offers to lease, or rents or offers to rent, any real estate for more than a single owner."
GRS this is why Baker gets paid the big bucks hah. I can see where you are coming from and I see where the guy with the blog is coming from. For me this is the reality: I could play the word game that I manage my place, but the reality is that I rely on my wonderful housekeeper to take care of the people for me and she does great. I also know of hundreds of owners on Maui that do the same thing. I just can't convince my self that anyone would actually believe I can manage my place from halfway across the world. I can do rentals from anywhere including the ski lifts in Colorado, but I can not see where I would be honest to say I can manage it from here too. I know you disagree, but just being real.
Owners fall under exception 1 of the clause below. In the case of an owner "managed" property, exception 3 is irrelevant...
That has been my conclusion too, every time I've read it... I don't see the other interpretaion at all. Thanks for verifying that this is what everybody's been talking about... I can quit looking!
Crazy blogger, I manage my condo with no problem from 5000 miles away. My contact person has never been called by a renter. He is on retainer "just in case". I do all my own rentals. I contact repairmen, arrange for cleaning, etc., etc. We are on call for our renters 24/7, and I can answer a phone call just as easily as my contact person. We have dozens of satisfied renters who tell us what a wonderful condo we have and how well cared for it is. What more would someone else do who is a manager???
As jwe said, gotta have someone there. Reality is if we need to we can get people that are licensed to be the "on island" person for $50-$100/stay. I get those solicitation letters all the time. I think the law can be read how ever you want. The reality is it only matters how Baker is reading it. I think Baker is consumer protection so given that I can understand why she wants someone there to take care of the people and I can futher see from the existing laws how that can be deemed as a caretaker and go into license stuff. I have read the laws 20-30 and have figured ways to spin them about 5 different ways. I am not saying that I agree with it all 100%. I am just saying I see the point and if I can see the point I don't think we are going to have much luck swaying them another way. Better to choose our battles wisely.
@crazyblogger If you have read the laws 20-30 and have figured ways to spin
them about 5 different ways how could the govt ever expect anyone to know what
the laws are and then how to follow them. The problem in HI is that they make
laws but don't inform the people. From what I have read it does now look like
we are supposed to be paying GET/TAT on the cleaning fee but I had no idea of
this until now. Their problem is that the laws are too complicated and then not
communicated properly with those that it affects. A person buying a piece of
property shouldn't have to go through the archives of laws to know what to
Gail, you are absolutely right. I talked to someone in the tax department many months ago and was told there were no taxes to be paid on cleaning fees. Following the discussion here, I called again and asked to talk to a supervisor. She did not give me an answer right away but said she'd get back to me. Later in the day she called back and said, yes, you have to pay GET and TAT on cleaning fees. I told here it would be helpful if her own staff knew the rules so that when people ask they could be given the correct answer. If their own department doesn't know, how do they expect other people to know???
By the way, that's not the first incorrect information I've been given by the tax department, including an incorret way of filling out the tax forms--and I still have the forms which their office filled out for me incorrectly!!!
This just came out, sry slight change of topic...
Now that's the right way to go after tax evaders. There's no "oh you're a local yatch owner so we're leaving you alone and everyone (and I mean everyone) else pays up".
I've seen this phrase in so many amendments that I'd dreamed out it
"The legislature finds that although many owners of transient accommodations operate in compliance with applicable state and county laws, there are a sizeable number of owners who do not"
Is the legislature thinking 20% of owners cheat, 40%, 60%?? Okay since they've never defined "sizable" let's say hypothetically 50% of owners cheat. Wouldn't be a huge windfall (not to mention easy) for the State to find these people and penalize them? Instead what we get is more bureaucracy and laws that very few can follow.
Amen on the laws. On a halfway positive side everything will be in one spot for us to see.
Regarding cleaning, that is an interesting topic for even the tax department. If the guest pays the cleaning there is TAT on it and if they do not pay it there is no TAT. Pretty interesting that something could be taxes two different ways.
Regarding GET and TAT taxes on cleaning fees. If you seperate out your cleaning fees on the bill you give your guest they do not have to pay TAT on the cleaning fees. Same goes with a parking fee or resort fee. But if you lump it all together they must pay TAT on all.