Board Talk: Board Imposes Maximum Fine For Illegal Vacation Rental in Kona

posted in: Board Talk, February 2020 | 0

On January 24, the Land Board fined Caroline Killeen and her family trust $17,000 for using their oceanfront home in South Kona as a vacation rental for the last decade.

Rules for the state Conservation District, in which the home was built, prohibit the rental of single family residences for a period of less than 180 days. In addition, the Conservation District Use Permit for this home includes a condition barring any kind of rental or commercial use.

The DLNR’s Office of Conservation and Coastal Lands initially proposed fining only Caroline and her husband, Gary. However, at the Land Board’s meeting, Caroline’s son, Bill Wedemeyer, informed the board that Gary died in 2010. Also, OCCL administrator Sam Lemmo reported that the trust is actually the current property owner. It also owns the lots on either side of the house.

“We were searching some alleged illegal transient vacation rentals in Kona. This just came up in our search,” Lemmo said. The home had been listed on the VRBO (Vacation Rentals By Owner) website for an average of $250 a night with a minimum stay of three to seven nights.

“We know transient vacation rentals are an issue all over the state,” Lemmo told the board. “Generally, these types of activities sort of can alter the nature of a residential community in a bad way [with] a lot of traffic coming in and out of these places and create quite a nuisance.”

Wedemeyer testified on behalf of his mother, who lives in Arizona. “She’s 83 with a heart condition. … This was their home that they loved. This was their primary residence. When Gary had cancer in 2009, they went to the mainland. I was the only one here to keep an eye on the house,” he explained.

Wedemeyer and his wife, Carol, were listed on the VRBO website as the owners and managers of the property. Renting the house out part-time was his mother’s way of keeping it in the family, he said.

“I’m here to apologize. I’m not here to say she was wrong on her behalf. She felt we had no choice,” he said, adding that he wasn’t aware that the house was in the Conservation District.

Now that the family has had to cease using the home as a vacation rental, “we don’t know what to do. … She can’t rent the house out. We can’t all be down there watching the place,” Wedemeyer said, adding that while his siblings often vacation there, none of them live nearby.

Carol Wedemeyer said the house may be sold.

“My family’s been here since the 1600s. I’m a Wedemeyer. This is my home. Sad to say, this precious piece of property … now is being taken away because of the situation,” said Bill, whose father, Herman, was a former Honolulu city council member, state representative, professional football player, and actor in the original Hawai‘i Five-O series.

Land Board member Chris Yuen said that the Conservation District Use Permit was recorded in the Bureau of Conveyances and would have shown up in the title search when the family bought the property. (According to Carol Wedemeyer, her husband purchased the property first, then transferred it to the Killeen Trust.)

“I don’t know what you personally know, but the mechanisms were there that any buyer after the original permittee should be aware [that] rentals were prohibited,” Yuen told Bill Wedemeyer.

“It wasn’t meant to be a rental. They loved that home. They lived in it for 15 years as a primary residence,” he replied.

“I understand what you’re saying. At some point, it was used as a rental,” Yuen said. The board approved a motion by Yuen to accept the OCCLs’ recommendationto impose the maximum fine for a singleviolation — $15,000 — plus $2,000 in administrative costs.

“They rented this out for quite a number of years and probably earned considerably over $15,000,” Yuen said. He added that while he understood the decision the family made and the dilemma they are in, the Land Board is obligated to enforce the conditions of its permits and its rules, regardless of the circumstances of the individuals.

The OCCL’s Lemmo pointed out that the family could petition the state Land Use Commission to take the land out of the Conservation District, or ask the Land Board to approve an amendment to the Conservation District Use Permit, so that long-term rentals, at least, would be allowed.

Yuen said the former option was a tougher road, but amending the permit conditions to allow a long-term rental “is not a huge process.”

Board member Tommy Oi, a former DLNR land agent from Kaua‘i, complained that illegal vacation rentals were too common and supported the maximum fine. “This is happening too much. Don’t tell me you never know was Conservation when you bought the place. … You would know what you could do. We gotta set examples,” he said.

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