All Forum Posts by: Scott K.

I am selling my home as a FSBO. There are no agents or brokers involved.

Because of certain circumstances, we have both negotiated and agreed over the phone to the Purchase Contract being cancelled.

The escrow company has been instructed by both of us to disburse part of the funds to me, and part of the funds to the buyer, via an escrow Cancellation Instructions form.

What form or letter do the buyer and I need between us to formally cancel the Purchase Contract? We are both being considerate and civil towards each other at this time, but my inclination is that we need some sort of Cancellation of Purchase Contract letter that the buyer signs and I accept. Is it necessary? Anything specific to put in the letter?

That's good to know. I know that the wintertime high-season is the best time to sell, but I didn't want to take a chance. I've noticed that the prices in my neighborhood were slipping since I locked-in my price, but they'll probably re-bound between now and winter. Current active listings are still below my locked-in price.

There is a general inspection period which is to occur within 12 days after Dec 1. The Buyer can terminate the contract if the issues are not resolved with the Seller (me).

There is a termite inspection to occur 7 days after Dec 1. If live termites are found, the Seller (me) has to have the problem fixed.

I guess it boils down to negotiations, even after the contract is signed.

My neighbor's friend came to me and said they'd like to buy my house, which was not yet on the market. She is a licensed real estate broker from California, my house is in Hawaii. We went back and forth a few times and agreed on a price and wrote up a purchase contract using the Hawaii Realtor form without using a broker (no commissions).

The buyer is also going to be my renter until we go to closing, expected in January which is 5 months away because they need to have 2015 taxes filed to qualify for a V.A. loan. I agreed to lock-in the price and sign the contract now because it's bird-in-hand.

While the buyer is renting my house which they will be buying, they are finding things wrong with it -- carpet is heavily stained and worn (it is, my last tenants were awful), there's dings in the drywall (again, bad previous tenants), the mirrors and light fixtures are rusting (Hawaii is humid, things rust fast), and there's bugs, possibly termites.

What, if any of this, am I responsible for? The purchase contract says nothing about getting new carpet or new shiny fixtures. But I want to do what is right without going overboard.

I'm heading back to Kona (Big Island Hawaii) to deal with my squatting tenants. I've already filed an eviction lawsuit with a court date late this month. I'm going to try and talk reason to the tenants and get them to move out peacefully.

During their occupation of my property, there was severe water damage to the upstairs kitchen and downstairs bedroom. I only found out about it from my property agent who did a quarterly inspection. The tenant never notified either of us of the damage to the kitchen (tenant does not have access to downstairs bedroom). Tenant claims that the faucet was leaking so he just tightened it up. The sink cabinet floor MDF was swollen and the drywall with the water supply lines under the sink became moldy and there was water pooled under the sink in the cabinet. The tenant never notified me of any of this. Because it was not addressed, it rotted through the plywood subfloor under the sink cabinet and soaked the ceiling drywall of the downstairs bedroom below eventually pulling down the whole ceiling and flooding the bedroom and molding the carpet. The bedroom ceiling drywall, one wall, and the bedroom carpet all had to be replaced.

To be fair, the tenant had no access to the downstairs bedroom, but his negligence to let me know of the water leak in the upstairs kitchen led to extensive water damage.

The insurance company said they estimated the damage to be $5,489. Less depreciation and deductible, they cut me a check for $4,350. They did not give me any money towards the carpet damage as mold damage to carpet was not part of my policy. The carpet estimate came in at $1,253.

Here is the relevant Hawaii tenant code:

I've hired contractors and made the repair. My Question #1 is how much to bill the tenant.

• The actual repair cost charged by my contractors, plus the carpet estimate? 
• The entire amount estimated by the insurance company, plus the carpet estimate? 
• The difference of the insurance company estimate less what they paid me, plus the carpet estimate not covered by insurance?
• Some other amount?

Question #2. The tenant paid me rent in advance, but signed an Early Termination agreement 4 months after the lease was entered because I was going to evict them but gave them a way to end this amicably. In the agreement, the tenant agrees that the unpaid prorated rent may be used to cover the cost of damages, in addition to the security deposit.

Would you recommend billing the tenant for the damages from Question #1, or go ahead and deduct the amount for damages from the rent refund just as the tenant signed and agreed to in the Early Termination agreement?

The riff-raff that I got as tenants inherited a bunch of money (or made it selling drugs), but no matter how much money they have, they're still riff-raff. When they gave me $25,000 upfront for 8-months rent, I couldn't turn it down. Gone were the worries of chasing down people each month for rent. But I didn't factor in that they were still riff-raff and damage my house, break rules, get into fist-fights, have the police show up 2-3 times a  week, disturb the neighbors, and break rules and laws.

The rent for a $600,000 home in Kona is about $1,800-$2,100/month and that's the max the people who are working for a living in Kona will pay rent for any house. The jobs in Kona amount to low-income retail and food service, and construction. A "great success" in Kona is to get a job working at the airport. So, the people working for a living in Kona make hardly any money which caps out rent around $2,000 per month no matter how nice the house. For long-term rental, I was charging $3,000 furnished with partial utilities, hoping to weed out the riff-raff. I still got riff-raff, just riff-raff with a huge inheritance (or drug dealing money).

If I would ever rent out property in Kona again, it would *ONLY* be vacation rental property that allowed daily or weekly rentals, or at least 30-day minimum rentals so that I could rent it to mainlanders on extended vacations (especially Canadians, who would come over for 2-month long vacations and pay $5,000 a month!).

Yes, yes, yes.

I'm single, and I bought the 2-story 3BR/3BA house which has a fantastic unobstructed view of the ocean and sunsets to use as my full-time residence AND to rent out half of the house as a 30-day minimum rental primarily for mainlanders who take extended vacations (mostly Canadians). I remodeled the house so that the downstairs and upstairs were separated private living spaces with doors to secure them from each other. The only common area was the laundry room.

After a few seasons, the HOA got on my case about renting out my home for what the CC&R's called a "vacation rental". My idea of a vacation rental is daily and weekly. 30-day minimum to me is a month-to-month rental. Well, they said anything less than 180-days was not permitted, which is uncommon as most subdivisions in Kona that don't allow daily and weekly rentals, do allow 30-day minimum rentals. Then some nosy person in the subdivision reported my remodeling to the County zoning department, saying I had created a "multi-dwelling" structure where it's only zoned for single-family. I technically did not have a multi-dwelling because the downstairs space did not have a stove AND a sink (it only had a sink) which defines a space as a "dwelling", and the zoning inspectors gave me a pass on the multi-dwelling, but they also said I cannot live in the same single-family home AND rent out part of the home to a family. It's confusing because the law says I'm allowed to have up to 5 roommates. Couldn't the family renting from me upstairs just be roommates? Typical vague law, on purpose so government can define and enforce how it likes.

So because the HOA forbade me to rent out as a 30-day minimum rental, which I could easily get $5,000+ in the high season and $3,500+ in the low season from mainland visitors (mostly Canadians), and the zoning department did not allow 2 families to live in the same single-family home, I had to move out of the home and would have to rely on long-term rentals from the impoverished local economy.

So with the low rent against a high mortgage just made it not worth it at all and I was losing -$700 per month, even with an optimal renter. With a bad renter, I'm losing thousands in damage and unoccupied time. I found this out the hard way multiple times when I owned a condo in Kona and swore I'd never rent out another property long-term to the local economy ever again, and made the mistake of doing it this last time. However, as a 30-day minimum rental to mainlanders on extended vacations, the Kona condo I once owned worked out great during the high season, and I'd live it in during the low season. That is an arrangement I would recommend, and what I aspire to get back to if I want to spend part of the year in Kona again.

The bottom line is that the Kona house was a mistake, and it's my fault for not understanding the CC&R's and zoning laws. As just a residence with no vacation rental income or as a long-term rental to the impoverished local economy, the house is a financial loser either way and I had to cut my losses and sell it.

 I called every single PM in Kona and not a single one wanted to take over managing my property. The most successful PM in Kona even asked me where the tenants were from and when I told her, she said "No thanks!" Sadly, certain demographics are like bad buzzwords.

Another PM told me that I was already doing everything she would do, except she would be able to post notices on the door. Other than that, she said I was doing all I could do already.

But fortunately I finally got a PM at no cost because she is going to buy my house, and she's been a real bulldog on these tenants because she has a vested interest. However, when it comes to eviction, she said she'll tell me when it's time to do it, but she cannot do it for me.

Admittedly so. I'm also 5000 miles away from my property. I actually *do* have a PM now and she is really on top of things with these tenants. I only got her in the last 2 months entirely because she is under contract to buy my house this winter and has a vested interest in the property being maintained.

She has been over at the house almost daily "swatting flies", telling riff-raff to leave and putting notices on the tenant's door. Things I can't do from 5000 miles away.

The latest update -- I just heard from my PM -- is that she said he said he's leaving tomorrow. We'll see. My PM said she's done 100's of eviction in California, so she knows when we need to do that.

Bob, that was a really helpful detailing of the process you went through.

You got the police to negotiate with them to pay you $3K so they could have extra time and leave at a later date. What would you do if they didn't leave on the negotiated date?

Question on keeping the security deposit -- what was your reason to have claim to the entire security deposit? Did they cause damage to the property up to or in excess of the sec dep? Was there unpaid rent?