The Honolulu city council implemented an ordinance August 1, 2019 to regulate short term rentals. The new regulations (Ordinance 19-18) are targeting rentals of less than 30 days. Many cities around the world are trying to better regulate Airbnb rentals. Honolulu’s solution is a very restrictive city law that also impacts home exchangers. The definition of “compensation” for short term rentals is so broad that a home swap is considered compensation. I’m not a lawyer, but here’s my read on the ordinance and its implications.
What does the honolulu short term rental ordinance say?
I read the ordinance and it’s confusing. The writing is not for mass consumption.
The ordinance makes it illegal to:
Set aside or exclusively reserve an unpermitted bed and breakfast home or unpermitted transient vacation unit for rental or occupancy for a period of 30 consecutive days or more, but limit actual occupancy of the premises to a period of less than the full stated rental period, or condition the right to occupy the rented premises for the full stated rental period on the payment of additional consideration; or £121 Advertise, solicit, offer, or knowingly provide rental of an unpermitted bed and breakfast home or unpermitted transient vacation unit to transient occupants for less than 30 consecutive days.
There is a supplemental FAQ from the Honolulu government that is a bit clearer. And this FAQ addresses home exchanges specifically:
I am a member of homeexchange.com, where owners “swap” the use of their homes with other owners around the world. No money is exchanged and terms of the use can range from a few days to several weeks. Does this activity fall under the new short-term rental law?
Home exchanges are subject to the new regulations. While home exchanges may not involve cash transactions, owners are compensated for such exchanges with things like “guest points” or a home/lodging. The definition of transient vacation unit contains a broad definition of compensation, i.e., “… compensation includes, but is not limited to, monetary payment, services or labor of transient occupants.” The definition was intended to prevent people from renting a dwelling or lodging unit for less than 30 days, regardless of how the owner is compensated.
SECTION 14 OF THE ORDINANCE READS IN PART: “Transient vacation unit” means a dwelling unit or lodging unit that is advertised, solicited, offered, or provided, or a combination of any of the foregoing, for compensation to transient occupants for less than 30 days, other than a bed and breakfast home. For purposes of this definition, compensation includes, but is not limited to, monetary payment, services or labor of transient occupants.”
Lawsuits filed, small modifications made
The Hawaii Vacation Rentals Association filed a lawsuit to stop this ordinance. The lawsuit was settled on October 4 with a judge’s order. I couldn’t find a copy of that order so I’m quoting this from Hawaii Living:
Rental agreements, advertisements, solicitations and offers to rent property violate Ordinance 19-18 if the price paid for the rental is determined, in whole or in part, by an anticipated or agreed upon occupancy of the property for less than thirty days.” However “CO 19-18 does not require a renter to physically occupy a rental property for any minimum length of time.” There is no violation if: “1) the owner and/or operator has not limited the actual occupancy of the premises to a period less than the full stated rental period, and 2) the owner and/or operator has not conditioned the right to occupy the premises for the full stated rental period on the payment of additional consideration.
This FAQ from a stipulation settlement (which I believe is the same as the one mentioned above) suggests that they won the right to make bookings for less than 30 days. But I believe that no one can re-occupy the property within that 30 day period. Even if the guest has departed. Note, these FAQs are not law, they are just guidance from the Oahu Short Term Rental Owners Alliance. Here are the relevant FAQs:
If a single family home is rented to tenants that leave after 20 days, can the host re-occupy for the next 10 days? NO, the tenants have the right to return and re-occupy during the last 10 days. At no additional rental fees.
On the VRBO/AirBnb platforms there is a place that asks for ‘minimum rental’. Can I put set this to less than 30 days – say 7 days – if I plan to only rent once a month? Yes.
Is listing like this, in these areas considered a violation? No, you are allowed to put a minimum stay.
Could I rent to a family for 7 days, have family stay for 14 after renters leave? Your rental is required to stay vacant after paying guest leave. Until a full 30 days has past.
What does all this mean for home exchangers?
For home swappers the 30 day restriction is the relevant part of this law. You can host guests for 30 days or more. That’s not considered short-term. And you can host guests for fewer than 30 days. But, you have to wait until 30 days are up before returning home.
Cudos to HomeExchange for being on top of this new law and doing the research. But they offer this advice to members:
In order to abide by the new regulations we recommend that HomeExchange Members located in the City and County of Honolulu update the description of their home by including the following sentence.
Members can copy and paste this sentence into the Additional Information section of their Home Profile: “My home is only available for a 30 day exchange period. If I do offer my home for 7 days, I will not offer it again for 30 days starting from day 1 of the 7 day period.”
I think that last bit about the 7 day period is technically correct but will be misinterpreted by members to mean hosts can return home after the 7 days are up.
In a quick search I found 40 homes on the HomeExchange platform in Honolulu. None that I look at included the 30-day language. And I’m sure there are many more listings on other home swap networks. I urge home exchange platforms to contact members with listings in this area and alert them to the new ordinance. There are hefty penalties if you’re found in violation of this law.
