Financial

Maui: A Look Back at 2019

While not a full list of the all of the happenings and news on the island in 2019, Here are some of the headlines that attracted the most attention. Blazin’ hot. Even though 2019 was the Chinese year of the pig, the year may be better remembered as the year of fire. Weather, including record breaking heat, combined with fallow fields contributed to blazes across 25,000 acres- more than five times as many as in 2018. Growing green business. Maui Brewing Company was recognized for investing over [...]

Reducing HOA Property Risks

Amenities add value to communities. Having a place to gather, play tennis or other recreation activities can be the centerpiece of the neighborhood on Maui. And since all members chip in through HOA fees, perks can be provided at a reasonable cost. However, amenities are not without risk A Homeowners Association is open to liabilities providing such amenities. It’s important to be fully aware of risks and take appropriate steps to minimize them. It may mean saving a lot of money down the road. [...]

Employers: Are you ready for payroll and related changes in 2020?

There are numerous payroll changes for 2020, mostly on the Federal level. You can toss out the old Form W-4- there’s a new one. 2020 is a leap year, which may throw off payroll calendars. Finally, there are a few interesting state laws taking effect in the upcoming year. While the new Hawaii laws are not directly tied to payroll, they may have an impact on personnel. Federal Changes FICA Taxes Social Security tax For 2020, employers and employees must each pay Social Security tax at 6.2%, up to [...]

Fiduciary Duty of a Board of Directors

Board members of a condominium or homeowner’s association have fiduciary duty to act in a way that will benefit all members of the association. The Hawaii Department of Commerce and Consumer Affairs has a document available to associations, “Condominium property Regimes: Owner Rights and Responsibilities.” Following is an excerpt of the document, which is a good starting point for association boards and their members to understand their responsibilities under the law. Board of Directors The as [...]

Keeping Adequate HOA Reserves

It’s hard for some homeowners to understand why dues are collected, or even increased, when an HOA already has funds held in reserve. However, reserves must be adequate, and a vote not to reserve is likely a vote for a special assessment in the future. An association must protect its common elements through the proper funding of association reserves. Pre-planning can save money, relieve stress and save time. Adequate reserves help keep a property well maintained, and adds to the safety and sec [...]

What’s Growing On at Mahi Pono

The tide is turning on the “wait and see” attitude many had toward Maui’s newest major agricultural land owner, Mahi Pono. The company bought 41,000 acres of central Maui land from Alexander & Baldwin in December for $262 million after the longtime sugar grower decided in 2016 to get out of the agriculture business and focus on commercial real estate. Now Mahi Pono is following through on community farm plans, revealed its first farm plan to grow fruits and vegetables, and broke ground thi [...]

2019 Legislative Session Update

The Department of Commerce and Consumer Affairs Real Estate Division has provided on update on the 2019 legislative session. Enacted into law were several condominium bills. Provided is a summary of a few relative acts, but please consult with legal professionals regarding these new laws. House Bill: Act 192, SLH 2019 clarifies the order in which excess amounts in payments over maintenance fees can be applied to any additional fees, fines, interest, or amounts an owner may owe. Senate Bills: A [...]

A & B Reinvests Maui Ag Land Proceeds in Hawaii

Alexander and Baldwin, Inc. is turning from agriculture to grocery-anchored shopping centers. After the sale of 41,000 acres of mostly sugarcane farmland on Maui to Mahi Pono in 2018, A & B has made a series of commercial investments. The new acquisitions include: $66.5 million for three Class-A warehouse buildings in Kapolei; $42 million for a ground lease under the Home Depot store in Iwilei, Oahu; $41 million for an industrial ground lease in Kapolei; $17.75 million for Waipouli Town Ce [...]

A Contentious Wailuku Development Plan

Debate over increasing parking in Wailuku has gone on since 1962, according to County records. Towards the end of Maui’s post-war decades, the island economy was shifting from sugar and pineapple to a new and promising crop; visitors. The “Dream City” developments in Central Maui, stretching into emerging neighborhoods in Wailuku, would create the largest property tax base for the next generation. Central Maui was thriving. As tourism grew, West and South Maui took the lead in supporting the t [...]

REIT – Tax Dodge or Good Investment?

A special kind of real estate related corporation is under Legislative scrutiny- again. A “real estate investment trust,” or REIT, provides significant benefits under the federal tax code. In Hawaii however, State lawmakers are looking to close tax loopholes. Background REITs are related to investing in real estate or loans secured by real estate. Established by Congress in 1960, certain requirements must be met to maintain a REIT. In addition to how it is organized and owned, a REIT must also [...]