Huge Changes Coming To Hawaii Vacation Rentals In 2025! [Big Island Update]

So some of the penalties for noncompliance is obviously the monetary fines that we talked about already. Those are going to range between $500 and $1,000 per day. You can get your license revocated or revoked. And so that's a big one, whereas if you can't get the license anymore, that's going to hurt you if you are a repeat violator. Hey, what's happening, friends? Back in 2018, Hawaii County passed its first ordinance to regulate officially vacation rentals. And so it's been a while. It's been about seven, eight years since that happened. And there's been a lot of discussion about updating that ordinance, passing additional regulations, and nothing has really happened. There's been lots of debate up until now. And at the end of July, a new bill was passed and it was signed by the mayor. And it was a pretty sweeping update to the previous regulations and the previous ordinance. And so I'm going to update you on what the new ordinance does and give you a quick summary so you're aware of what to be aware of when thinking about purchasing a vacation rental or if you already own a vacation rental, the things that you need to be prepared for in terms of regulation, because there are some significant updates that have changed the past regulation and now have updated into the new one. So running through this real quick, let's get to the next slide here. So the purpose of this ordinance was to amend Chapter 6 of the Hawaii County Code. That is the code that regulates vacation rentals. It basically changed the entire thing out and created a new article. And actually, one of the significant changes, which isn't necessarily substantive, is they changed the term from vacation rental to travel rental. So TVR, you're going to see regulated in completion and comprehensive framework that establish definitions, license requirements, operational standards, enforcement mechanisms for specifically hosted rentals. And we're going to run through what all those details look like here in a second. And so just some quick definitions, like I talked about just now in the previous slide, they're now called transient vacation rentals. And that is any dwelling that's rented out for less than 180 days in exchange for money or other value. So this excludes any hotels, motels, inns, timeshares, tents, things like that, but pretty clearly defines what a short-term rental is. And then the hosted versus unhosted rental is important because the unhosted rental is what was originally regulated back in 2018. And that is a property where the host does not live in the property, obviously. But anything that was a hosted rental where the host lived in the property on site was completely unpermitted or unregulated up until now. And that's the big change. And we'll go through all those details in a second. And then the host of a hosted rental is a reachable person whose principal home is on the same property as a TVR. And we'll go through exactly what defines a host because they do have some very specific criteria on what qualifies you to be a host. And then a hosting platform are all of the booking services such as Airbnb, VRBO, and other vacation rental management sites. And I'll talk about what exactly, how they play into this now, because this is another significant change as they've added these different platforms into the mix to assist with enforcement. So the first thing is, is host requirements. What is it, what is required for you to be a host of a vacation rental? The first one is responsive availability. So you have to be able to be contacted within one hour by a county official by phone. The second one is you have to have a physical presence. So you have to be able to be on the premises within three hours. And then of course you need to reside on the property. So any property market is hosted. The host has to physically reside on the property, not right down the street or across town, because a lot of times that is what people have done to get around this requirement of it being unhosted to say it's hosted when it's not really hosted just because they have somebody that's close by. So very specific requirements now to be a host for a hosted rental. And then the next thing is it broke down all of the different licensing costs. And so some prerequisites to get a TVR license, a transient vacation rental license, is you have to a valid GET tax license. That's our general excise tax. That's paid on every good and service in the economy. You have to have a TAT account, so a transient accommodations tax account, and you have to be compliant. And then you have to have no delinquent property taxes. So obviously all your property taxes have to be paid. And then you have to be in full compliance with building health and safety codes. You can't have any type of building violations or health violations on your property. And then the fee structure is if you're a hosted rental, it's a $250 initial fee and then $100 renewal. If you're an unhosted rental, it's going to be a $500 initial fee and then a $250 renewal. And then any late renewal fees are $90. And then if you violate or you have to reinstate your license, it's going to be a $1,000 registration fee. So that gets pretty hefty there if you start to violate any of the current regulations that are now in place. Okay, so some operational restrictions. So originally, right, we talked about hosted versus unhosted. So now if you are a hosted rental, we'll have to get a permit, which is very different than what has happened in the past. And then you have to have a genuine on-site manager, which again, before it wasn't regulated. So people were doing all kinds of crazy stuff. Some unhosted rental constraints. So if you're an unhosted rental, you're going to face more stringent restrictions on eligibility based on zoning and other things, prohibiting them entirely. So that's a big one where there's continuing to crack down on unhosted rentals and where you can do them. And then of course, you have to be in code compliance, right? You have to have all of your county building and health and safety codes up to date. And you got to have all the permitting for all of the structures that are currently being used. And this is a big one also is a lot of times people will build an unpermitted base on their property and then use it for a vacation rental. And you are no longer going to be able to do that under this new regulation. If you're looking to relocate here on the big Island, I want to share with you a resource that we put together over 80 agents from my team, expert agents here on the big Island, put together a relocation guide that will help you evaluate all of the important factors that you want to take into account before you move here to the big Island, school districts, healthcare, employment, all of the things that you got to think about. We put into one home buyer's guide that would help you figure out what is best when you start this relocation process here to the big Island. So if you want this guide, just click on the link below, fill out the form. We will send you the guide for free. And if you want to take the next steps and have a conversation with us, we'd be happy to help. So some enforcement mechanisms, right? Cause always the discussion becomes, okay, you pass all of these laws, like how are you going to enforce all this stuff? Are you going to hire a police force to regulate and inspect every single vacation rental? And so this is a big one is that there is going to be joint liability. So both the property owner and the host will share in legal responsibility for the violations that hasn't been the case in the past because it was totally unregulated. So if you're going to take on responsibility of being a host could be held liable. If your property owner is not fully compliant, there will be monetary penalties. So there will be fines and the failure to pay the fines could result in civil action property liens or other remedies. So again, definite consequences. If you are not compliant, there will be an appeals process like everything else. The planning director is going to create a process where you can appeal these violations and you will get due process like we always do in America. So that process is laid out in this new regulation and of course legal action. So this is another one where the County will be able to pursue injunctive relief with a court and immediately stop unlicensed rental activity if you are caught or they identify you. So this could immediately shut down operations. So very, very significant if you're continuing to operate and you know your guests now have no place to go. So that's something you really want to think about and make sure that you are compliant. So some of the penalties for non-compliance is obviously the monetary fines that we talked about already. Those are going to range between $500 and $1,000 per day. You can get your license revocated or revoked. And so that's a big one. Whereas if you can't get the license anymore, that's going to hurt you if you are a repeat violator. And then the big change here, one that I really wanted to highlight is platform accountability. So this is something that's very interesting because it's hard for the County to have the manpower to regulate and inspect vacation rentals, but it's very easy to force a platform to ensure that anybody who goes on their platform like Airbnb and VRBO are the two big ones, have all the proper licensing and proper permitting, be marketed as a vacation rental. So what this new ordinance does is allow the County to go after the platforms if they are not properly screening, or if they put unpermitted properties, unlicensed properties on their platforms and market them. So it's going to put the onus on these platforms who definitely have the technology and the resources to screen everybody. It's like Uber making sure that you have a driver's license and car insurance before you can drive Uber. They are going to put the onus on the platforms, these tech platforms, and have them help ensure that any property that's marketed is properly permitted and licensed. So that's a big change, but definitely a good idea. And it's going to make it a lot more enforceable, in my opinion, than having people at the County try and track everybody down individually, because that's just impossible. And there's not enough manpower. The County doesn't have enough money to actually do that. So that is definitely a very, very big change that the platforms will be liable going forward. So what does this mean for you? There's a lot of information here. And of course, I'm going to remind you at the end to go to the County and get direct information. Don't take it just from me. But really, you want to verify your licensing status and check on if you want to do a short-term rental. Does your property qualify? You want to ensure that you're totally compliant and you meet all the codes and you've done everything that you got to do in order to stay compliant. And then maintaining tax compliance is a big one. There's a lot of different taxes that need to be paid to different departments in different places. And you want to make sure you stay up to date, because if you don't, that could get your license revoked and then really put a wrench in your operation. So staying on top of everything, staying compliant is going to be absolutely most important going forward if you want to continue to legally operate a vacation rental. So at the end of the day, the most important thing is you want to stay compliant. There are still plenty of places where you can vacation rent legally, and you have to get a permit. But because of all the changes in the updates and the requirements, you want to make sure that you are staying up to date on what's going on. And of course, if you have questions, contact the Hawaii County Planning Department directly. Don't call me I didn't write the bill. I'm not interpreting the bill. I'm just giving you the overall information high level on what's going on. But definitely we do understand which properties can and cannot be rented, where zoning allows for it, and where zoning doesn't. We point you in the right direction inside on if you're looking to buy a short-term rental as an investment, what your best bets are, and things to avoid. So if you have any questions, you can always email me at dylan at buybigisland.com, or you can book a meeting in the link below in the description. There's always a calendar link there. You can book a meeting directly with me. If you're looking at a specific island, I will bring on somebody from that island who understands specifically what's going on to help you through that process and answer any of your questions. So as always, hopefully this was helpful and getting you an update on what's going on in the short-term vacation rental market here on the Big Island and regulation-wise. And as other things pass on the other islands, we'll bring you those updates as well. But I always appreciate you guys watching. Let me know if you have any questions, and I'll see you guys next week with next week's video.