Who says that STRs are not permitted at Waikiki Lanias?
The Honolulu Department of Planning and Permitting has sent three letters to the AOAO clarifying the status of STRs at Waikiki Lanais. There is no ambiguity whatsoever in the letters. Here are some quotes:
“TVUs are not permitted use in the Apartment Precinct. Although certain units within the multi-family dwelling appear to have previously held NUCs [nonconforming use certificates], there are no active NUCs at the site at this time.”November 9, 2017 letter to the AOAO attorney
“[D]espite the designation of the building as “Hotel and Resort” by the Real Property Division, the allowable uses on the site are regulated by the LUO, which specifies that short term rentals are not allowed in the Apartment District without an active NUC.”November 9, 2017 letter to the AOAO attorney
“This is a followup letter to our previous letter, dated November 9, 2017, regarding transient vacation rentals (TVUs) on the subject property. We reiterate that TVUs may not operate on the site without an active Nonconforming Use Certificate (NUC), and, based on our records, there are currently no active NUCs on the site.”April 26, 2018 letter to the AOAO attorney
Don’t the governing documents of Waikiki Lanais allow for “hotel use?”
The Declaration has the words “hotel use,” but the full phrase on use is “any lawful residential condominium use including hotel use.” The Bylaws allow use for any “lawful purpose consistent with the zoning of the project.” Only STRs operating with NUCs are lawful in multifamily dwellings in the Apartment Precinct.
“The owners of the respective apartments shall have the absolute right to occupy, lease or rent such apartments for any lawful residential condominium use including hotel use, subject to all provisions of this Declaration.”Section E (“USE”) Declaration of Waikiki Lanais
“The apartments of the project shall be used for any lawful purpose consistent with the zoning of the project.”Section 3(a) Bylaws of Waikiki Lanais
“No apartment owner or occupant shall make or suffer any strip or waste or unlawful, improper or offensive use of an apartment or the project…”Section 3(e) Bylaws of Waikiki Lanais
Wasn’t Waikiki Lanais originally developed as a condo/hotel?
No. Again, the DPP has provided written clarification on this issue:
“The permitting history reveals a Building Permit (BP) No. 014657, issued on August 14, 1973, allowing the 21-story structure as an apartment building, or multi-family dwelling (MFD)…The zoning history for the site indicates there was a time when a hotel could have been permitted, but no permits to allow a hotel were issued during this period.”April 26, 2018 letter to the AOAO attorney
“There was a time when the underlying zoning district was Hotel and Apartment, but this shouldn’t be confused with the occupancy codes. A variety of structures with different uses could have been developed in the Hotel and Apartment District. Our records indicate that the structure on the subject site was considered a MFD; at no point in time was the structure considered a hotel.”April 26, 2018 letter to the AOAO attorney
“Some of the units may have previously been operating as lawful TVUs…Several units on the subject site obtained NUCs, confirming that in 1990, the structure was recognized as a MFD, not a nonconforming hotel. With active NUCs, the owners of those units would have been able to lawfully rent the units for transient visitors. However…over the last 28 years, all of the NUCs issued to owners of the MFD expired. At this time there are no active NUCs on the site.”April 26, 2018 letter to the AOAO attorney
Shouldn’t the condo Board be able to say what is OK in the building?
No, the condo Board can not condone illegal activity of any kind and can not engage in or permit owners to engage in activities that violate the governing documents. It is the most basic fiduciary responsibility of a Board member to obey and enforce the governing documents, which at Waikiki Lanais state that only lawful use of units is permitted, including only lawful hotel use.
Hasn’t the AOAO been sued for trying to control illegal STRs?
In 2017, the AOAO initiated actions to stop illegal STRs from operating at Waikiki Lanais. Some owners who are pro-STR responded with two lawsuit threats against the AOAO and its Directors. On advice of the AOAO attorney at the time, action against illegal STRs was tabled while mediation was pursued in one of those cases. In late, 2018, mediation failed. STR owners have not pursued either lawsuit.
In March, 2019, STR owners took over the Board of Directors and have stopped any action to control illegal STRs. They have removed all information about STRs from the Waikiki Lanais website and from postings in the common areas. At the Board meeting of 6/6/2019, they voted not to mail copies of letters from the DPP to owners; they voted to hire a firm to further research the zoning history of the building; they voted to establish a check-in desk for vacation renters; and they voted to hire the pro-STR attorney who previously threatened the AOAO and its former directors as the new Waikiki Lanais AOAO attorney “for litigation purposes.”
In August, 2019, pro-STR Board members voted to give a $40,000 fee to the new attorney to explore ways to challenge the city’s recently enacted Ordinance 19-18. This is a significant breach of fiduciary duty since there is no conceivable way that supporting vacation rental activity is a common expense. Directors who voted to support this use of funds may be responsible for reimbursing the AOAO.
Has Waikiki Lanais sued the city?
Yes. On September 3, 2019, one of the AOAO attorneys filed suit against the city of Honolulu, the Department of Planning and Permitting, and the Director of the Department of Planning and Permitting. The suit is an attempt to overturn the city’s new Ordinance 19-18, or at least to claim it doesn’t apply to Waikiki Lanais. At the August 1 Board meeting, Directors voted 6-3 to give the attorney $40,000 to do this.
Don’t some Board members operate illegal STRs?
Six Board members, which is a majority, previously advertised STRs for illegal periods of time on VRBO, Homeaway, and Airbnb. After Ordinance 19-18 went into effect on August 1, all Directors have changed their ads to 30 days in order to avoid stiff fines (proving that they know the STRs were illegal). Using units for unlawful purposes is a violation of both the Declaration and the Bylaws (see above), and hence one of the most fundamental breaches of fiduciary duty.
Can the Board Be Challenged?
Directors can be recalled by a 51% vote of the owners. The last attempt to recall two Directors who operate STRs failed, but almost 25% of owners did demand the recall of these Directors, so there was significant discontent. Now the majority of the Board (6 of the 9 directors) is pro-STR, and they have begun to use maintenance fees to pay for their quest to make STRs legal at Waikiki Lanais. These 6 Directors voted on August 1st to give the new AOAO attorney, Terrance Revere, $40,000 of owners’ maintenance fees to challenge the city. A lawsuit against the city has now been filed by Terrance Revere on behalf of Waikiki Lanais AOAO.
Perhaps this will motivate owners to act. If you are an owner and feel inclined to oppose the current Board, please email your information (name, unit number, and email address) to email@example.com.
What’s the city doing about it?
On June 17, 2019, the City Council passed two bills to control illegal STRs. On June 25, 2019, Mayor Caldwell signed Bill 89 into law. The new law is called Ordinance 19-18. It strengthens enforcement and raises fines for operating illegal STRs, and it also makes it illegal to advertise an illegal STR.
Ordinance 19-18 has already had a significant negative impact on illegal STRs, making them difficult and risky to advertise and operate, and making it much easier for us to report the violators in our building. Advertisements for STRs in our building have dropped to almost none!
Even just advertising an illegal STR can incur a fine of $1000-$10,000 per day! That’s why the six Board members who used to advertise illegal STRs have changed their ads.
How do I report an illegal STR?
To report a STR, send email to firstname.lastname@example.org, or call the DPP Complaint Line at 808-768-8127. You may also tell the Resident Manager.
I stayed in a vacation rental at Waikiki Lanais. Did I do something wrong?
We hope you had a great vacation. You didn’t do anything wrong, but the owner of the unit you stayed in violated the zoning law. Please help us fight this scourge in our building by reporting the violation on the online rental platform and by sending details of your stay to the Honolulu Department of Planning and Permitting at email@example.com, or call the DPP Complaint Line at 808-768-8127.
Where can I find a legal short-term vacation rental in Waikiki?
This map shows the various precincts within the Waikiki Special District. STRs are fine in the Resort Mixed Use Precinct. In the Apartment Precinct, NUCs are required to operatate a STR. If your STR is in the Apartment Precinct and is not on the list of NUCs, then it is illegal (there are no NUCs at Waikiki Lanais):