Today we shine the light upon a three-bedroom, 2.5-bath house that was built, in 1997, for $240,000 and purchased by Geoffrey and Sadie Barish for $1.925 million on Aug. 3, 2005. It is located just off the beach, in Wainiha Subdivision II, which has very specific Covenants, Conditions and Restrictions (emphasis added):
“No owner shall subdivide or re-subdivide his Lot, nor shall any Owner seek a zoning amendment, use permit, variance or any other type of approval which would allow a use of his Lot for other than single family residential use. No commercial activities shall be allowed on any Lot.”
In keeping with that restriction, the Barishes did not use their house as a vacation rental. In fact, they went so far as to pay off agent Gary Fischer, who had been renting it out as a TVR prior to their purchase and had future reservations booked. They didn't give their house a cutesy name, or take out any advertisements. But when Barish went to sell the house, North Shore Properties (NSP) reportedly advised him to apply for a TVR permit under the county's newly passed ordinance for regulating TVRs in continuous use before 2008.
In support of his application, Barish submitted a letter, dated Aug. 19, 2008, from Roberta Haas and Mimsy Bouret of NSP. The letter said NPS had been the property management company for the Barishes since Nov. 1, 2007, and the house, known as Hula Hale, had been part of their vacation rental inventory from that date. The letter goes on to state:
“Mr. and Mrs. Jeffrey Barrish [sic] have had transient guests occupying the subject property in exchange for compensation prior to the effective date of the Transient Accommodation Rental Ordinance with a pattern of consistency that evidences an ongoing and lawful enterprise.”
In further support of that “ongoing and lawful enterprise,” Barish submitted a GE tax license — though it had been closed on Sept. 5, 2005. He submitted no other documents required by law to prove previous TVR use, such as general excise, transient accommodation or Hawaii state tax returns, reservation lists or receipts for rental payments.
But he did include the mandated floor plans for the house, which showed three very small enclosed units had been added to the ground floor — without county building permits, in violation of federal flood laws.
Although the county's TVR log and the property's nonconforming use (NCU) form indicate the house was inspected on March 18, 2009, there is no inspection report. Nor is there any explanation of how it could have passed with such an obvious violation. Nevertheless, and despite the complete lack of documentation to prove prior TVR use, then-deputy planning director Imai Aiu approved NCU Certificate 1059 for the structure in June 2009.
Meanwhile, the Barishes had sold the house to David and Karen Burse, of Los Gatos, Calif., for $1.7 million on March 31, 2009. FEMA also had begun investigating reports that some Kauai County houses were not compliant with federal flood regulations. The Barish-Burse house was one of them, and on May 7, 2010, the county wrote to FEMA:
“Cited by building division for non compliance with the flood ordinance. Property will not receive a renewed NCU certificate for the next year.”
An initialized, handwritten note, dated 6-8-10, is attached to the file stating, “cannot renew because TVR ceased. Since 2009. Has permit submitted.”
On Aug. 26, 2010, then-county engineer Donald Fujimoto sent Barish a notice of apparent flood violation.
On Oct. 12, 2010, after the county had passed a second ordinance liberalizing the TVR permitting process, Burse sought a TVR permit for the “Burse Residence.” As “proof” of former use, he submitted a notarized affidavit that states “On information and belief the former owner operated a transient vacation rental,” and says he is remedying the unpermitted ground floor units. He also includes a copy of the NSP letter that Barish had originally submitted, and a reservations report from NSP that purports to show “arrivals for all complexes between Jan. 1, 2001 and Dec. 31, 2009." However, it lists just 12 arrivals and shows no income to the Barish account.
On Dec. 8, 2010, the National Flood Insurance Program conducted a site visit and noted numerous flood violations on the property.
On Jan. 10, 2011, county planning inspector Vill Balisacan sent Burse a letter advising him of “actions required to complete the TVR registration and NCU form” he had submitted the previous October. The “missing documents” included proof of payment of TAT and GET taxes, and as-built plans for the structure.
On Feb. 8, 2011, Burse sent planning inspector Bambi Emayo a fax, thanking Bambi “for your call and your explanation that we can still apply for renewal of NCU certificate 1059 for the renewal periods of 2009-10 and 2010-11.”
Now remember, this is the same NCU permit that had not been renewed because of the flood violation and also because, according to the initialized, handwritten note in the file, “TVR ceased. Since 2009.”
As has been noted previously, under the county zoning ordinance:
“If any nonconforming use ceases for any reason for a continuous period of 12 calendar months or for 1 season if use be seasonal, then the use should not be resumed and any use of the building or property thereafter shall be in full conformance with the provisions of this chapter.”
With that fax, Burse retroactively submitted a 2009 renewal form, and followed it up with a 2010-11 renewal form. He also submitted GE and TAT licenses that showed a business start date of 11-4-2010.
On Aug. 15, 2011, Burse sent Balisacan another letter, in which he confirmed his Aug. 4, 2011 telephone conversation with Vill and Bambi and writes:
“Mr. Emayo informed me that (1) our application for TVNC 4280 was complete; (2) no further inspection is required because of the previous inspection done in conjunction with the approved (now expired) TVNC 1059; and (3) final approval of our TVNC 4280 application will be granted as soon as we can provide a 'clearance from the Kauai Co. Public Works Dept. which [sic] respect to the Noticed 'FEMA Audit' Flood Violation.”
On Oct. 11, 2011, county engineer Larry Dill sent the Burses another letter advising them of what must be done to bring the ground floor units into compliance with the county's flood ordinance.
Remember that handwritten note? At some point, these words were added: “Renewal affect 10-14-11. Meeting.”
And at some point, Burse apparently got the original 1059 permit renewed — a permit that should not have been issued because it never met the original requirements, a permit that was out of use for more than a year, a permit that had expired.
On Sept. 24, 2012, his newly authorized representative, Realtor Jane Abramo, submitted the NCU renewal form for “Hale Koaniani.” (She and Coldwell Banker are now in the business of handling these pesky renewals for absentee owners.) Abramo included a note that read:
“We hereby withdraw NCU application no 4280, which was originally filed on your recommendation because of uncertainty at the time of the renewal status of certificate 1059. However, as you explained during our conversation on June 27, certificate 1059 is now “active” and eligible for renewal, and application 4280 was rejected because there cannot be two active certificates for the same property.
To avoid public confusion due to there being both an “active” permit and a “rejected” permit listed for the same property (TMK 5-8-9-052), we ask that you please delete the public listing of NCU application 4280, or at least change the status to “withdrawn” instead of “rejected.”