Judge rules against Paia short-term rentals

A 2nd Circuit judge has granted Maui County a partial summary judgment and a preliminary injunction against Paia businessman Michael Baskin, ruling that he’s prohibited from continuing to operate two of his short-term rental properties without required permits.

But because Baskin is appealing the permit revocations for his properties at 95B Hana Highway and 40 Ae Place, Circuit Judge Rhonda Loo did not rule earlier this month on the merits of the Department of Planning’s administrative action against Baskin.

“The court finds that it is premature to rule at this juncture as to whether the administrative agency’s revocation of the permits are appropriate and, perhaps, in violation of due process and equal protection rights as the defendants allege,” Loo said in court April 8.

Baskin’s appeal of the revocation of short-term rental permits for the properties is scheduled to come before the county Board of Variances and Appeals on June 26.

Last week, Department of Planning Deputy Director Michele Chouteau McLean said that the county was waiting for a written ruling from Loo before enforcing the preliminary injunction against Baskin’s two properties.

During a hearing before Loo, Baskin’s attorney, Paul Alston of Honolulu, argued that Baskin had not yet had an opportunity for a hearing before the Board of Variances and Appeals.

Without that hearing, “there is no basis for imposing an injunction and stopping the operation” of the short-term rentals, Alston said in a transcript of the hearing.

County Deputy Corporation Counsel Mary Blaine Johnston said that Baskin’s permits for the short-term rentals were revoked Nov. 27, and he was told to cease operations by Jan. 26. Then, in February, both permits expired under their own terms, she pointed out.

“So whether or not they had been revoked, the permits would have so been expired,” Johnston told Loo. “And these defendants would still be in violation of the Maui County Code because they continue, to date, to advertise both the property at 40 Ae Place and 95B Hana Highway and they continue to rent them out.

“Obviously, unless the court enters an order, an injunction stopping them to operate, they were going to continue to do so,” Johnston said in the hearing transcript. “There is no dispute. They don’t have a permit. They’re operating. They’re in violation of the code.”

During the hearing, Alston said that the county had failed to demonstrate everything necessary for a summary judgment or preliminary injunction, such as showing it was likely to win its case on the merits. Loo ultimately ruled otherwise.

“What they’re proposing entails shutting down a business, which has been in operation for years, long before the (short-term rental property) scheme came into effect, an operation we contend is grandfathered,” Alston said. “And if there were a shutdown, it would cost (Baskin) literally hundreds of thousands of dollars, if not destroy his business, and that simply should not be allowed.”

Johnston said that the county is obliged to enforce the law.

“The county in general and the planning director are specifically charged with enforcing the laws,” she said. “To not enforce them and let some people get away with not complying would not only be a dereliction of duty but could also give rise to other claims, like unlawful discrimination.”

Alston told Loo there’s evidence, and indeed public knowledge, “that there are hundreds, if not thousands, of unpermitted, fake short-term rentals on Maui. Why are they picking these two, which have been in operation for years for this sort of heavy-handed approach, where they’re trying to shut it down and destroy the business?”

Loo said that if or until the Board of Variances and Appeals overturns the Planning Department’s revocation of the short-term rental permits, Baskin and his Seashore Properties “are prohibited from continuing to engage in the rental activity for which they do not hold the required permits.”

In a statement released after the court hearing, Baskin said that his business was being targeted by the county while numerous other illegal operations continue.

Baskin said he’s filed appeals to more than 25 notices of violations and the revocation of his short-term rental permits. Instead of waiting for the appeals process to run its course, the county filed a lawsuit seeking Baskin to stop his short-term rentals, he said.

“They did so without first granting us the right to a hearing or even the opportunity to meet,” he said. “We have been afforded no due process, and the livelihood of our business is now in jeopardy.”

* Brian Perry can be reached at bperry@mauinews.com.