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Vacation rental operators file suit against the city

Gordon Y.K. Pang
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View of the dining area of a vacation rental home in Portlock.

The Hawaii Vacation Rental Owners Association filed a lawsuit in U.S. District Court today against the city over its new law prohibiting advertising of unpermitted short-term vacation rentals.

Greg Kugle, attorney for the group also known as the Kokua Coalition, said in a press release that Ordinance 19-18 is unconstitutional because it violates rights guaranteed regarding illegal search and seizure, due process, property, privacy and free speech.

The sections of the ordinance that went into effect today make it illegal for property owners to advertise unpermitted short-term rentals on the online sites of giant advertising platform companies like Airbnb and VRBO, or any other media. The new law also upped the fine for operating or advertising an illegal rental to a maximum of $10,000 a day from the previous maximum $1,000 a day.

“The City Council rushed through a flawed, unfair and illegal bill, and in its haste to crack down, (the Department of Planning and Permitting) has released illegal rules which violate the rights of the owners of legal rentals,” Kugle said.

Kugle said that HVROA was filing the lawsuit “on behalf of itself, its members and all other Oahu property owners who seek to rent their properties to guests in a way that has been perfectly legal for thirty years.”

The lawsuit seeks a temporary restraining order to stop the city from “flawed and heavy-handed enforcement” of the ordinance, he said.

The Kokua Coalition, with Kugle as their attorney, last year filed a lawsuit against the city arguing that a rental agreement of 30 days, even if a renter stays for only a few weeks or days, is allowable, so long as the renter has exclusive right to stay up to 30 days.

A settlement agreement was reached with the city — and approved by a federal judge — allowing for the 30-day rental agreements.

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