In yesterday’s issue of The Maui News, staff writer Harry Edgar wrote about the reasons why four local buyers are suing Honua Kai to get out of their sales contracts. Honua Kai is the new condominium and townhome beachfront development located on Kaanapali Beach. See the full story below.
WAILUKU - Four local buyers who now say they were caught up in a “feeding frenzy” at Honua Kai in Kaanapali are suing to cancel their sales contracts.
Their attorney, Richard Rost, is also representing an unhappy buyer at the Ho’olei condominium in Wailea, but at Honua Kai he is presenting a different legal argument - one that, he says, could have implications for many real estate contracts.
The interest in Intrawest’s Honua Kai condominiums in 2005 was intense. The developer limited real estate agents to three reservations each for the first phase of 242 units, which were to have opened about now. Construction continues, and the first phase is planned to open next month.
In December 2005, Michael and Judith Elam put down $132,000, and David Ward put down $196,000 for units. In June 2006, Barbara Duhamel put down $320,000 for hers.
Now they allege that they were rushed through “an assembly-line procedure” and were presented with sales documents to sign but no time to read them or to have them reviewed by a professional. Rost’s suit says that this take-it-or-leave-it approach was intended “to prevent proper deliberation.” It was “psychologically and practically coercive.”
Later, the buyers discovered things in the sales agreements that dismayed them, but the provisions that Rost thinks will be fatal to Intrawest’s ability to enforce the contracts required buyers to give up several legal remedies, including the right to go to court.
Intrawest and its associated companies did not give up any of those rights for themselves, however.
Rost said a decision last year by the Hawaii Supreme Court declared that such lopsided contracts are unacceptable as a matter of public policy and that they will not be recognized as valid.
That lawsuit involved the sale of a hotel, not condos, but Rost said, “I read it to mean . . . we won’t allow those contracts to be recognized. I may be 100 percent wrong, but I don’t think so.”
If Rost is right, he said, the court will accept his argument for summary judgment based on the lack of a contract, without having to get to any other issues. There are several of those.
Rost alleges Intrawest and its sales arm did not comply with federal regulations in offering real property.
When his clients did read the fine print, they were upset to learn that if they put their units into a rental pool, but did not give management to an Intrawest associated company, their guests would not have common-area privileges at the 700-unit resort at Keka’a (North Beach).
The suit seeks an injunction and either punitive or treble damages.
The defendants are Maui Beach Resort limited partnership, Northwest Maui Corp., Intrawest ULC and Playground Destinations Properties Inc. A spokesman at Intrawest’s North American resort development headquarters in Colorado said the company has a policy of not commenting on matters being litigated.
Harry Eagar can be reached at heagar@mauinews.com.
Mahalo,
The Smith Team
Gregory P. and Melissa Smith R(B)
Ken and Jeremy Smith R(S)
Coldwell Banker Island Properties
Shops at Wailea
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December 26th, 2008 at 4:13 pm
there are also some lopsided contracts by Honua Kai condo purchaser’s who fliped their condo for a quick gain using simultanious closing and using the buyers funds to complete their obligation with the developer.
January 24th, 2009 at 9:19 pm
They also promised us a Duke’s Restaurant that is not going to happen. These guys are crooks
January 25th, 2009 at 4:14 pm
Does anyone know how the values have held up at honua kai? Is there a good chance that individuals in the Konea phase(phase 2) can get their deposits back? Any suggestions on the best course of action?
February 2nd, 2009 at 4:16 am
According to the Developers, they have closed $100 million in sales in January which is certainly welcome news.
We know that there are some people who could not qualify for their loans and thus were unable to close.
The Developers are doing their best to work with those individuals. In some cases, they are allowing them to switch to alternate less expensive units.
Despite the fact that Duke’s has pulled out, the Developers have promised another high end restaurant to take its place.
We don’t feel that this is anything they planned or could have foreseen. We are sure they are as disappointed as anyone, and that their actions certainly do not merit there being called crooks.
These are extraordinary times that we are living through right now; however, we continue to remain very optimistic about Honua Kai becoming one of West Maui’s premiere luxury resort condos.
February 9th, 2009 at 2:50 pm
The fact that some buyers are claiming they were pressured into buying is no reason to sue the developers. Hawaii has a 30 day cooling down period after making a firm contract, so to say they were pressured is silly. Like many people buying when real prime estate values were going higher and higher, they probably spent most of the 30 days patting themselves on the back for making such a “smart” real estate decision instead of reviewing the contract properly or understanding whether they can actually afford to purchase the property when it is completed.
February 9th, 2009 at 5:16 pm
If the closed $100 million thats horrible for the builders. Its a $425 million project they owe at least $350 million on phase I. Everbody was originally scheduled to close in January so any additional closings are all delayed ones. I was thier Sunday only 4 people at the pool
February 23rd, 2009 at 4:31 pm
When was it announced that Duke’s was no longer opening a restaurant on the site? Does someone have a link to a news article they can share?
February 27th, 2009 at 6:36 pm
Not sure exactly, but gota love the seller who now says even though Dukes is not opening guests wiill be able to buy gourmet frozen dinners to heat in their microwaves. What a joke.
February 28th, 2009 at 2:58 am
Although Dukes is no longer going to be the on-site restaurant, Pacifico, an equally high end restaurant, will most likely be the one to replace them. They are currently running the on-site gourmet cafe which is way more than frozen dinners. Greg had a delicious fresh made sandwich there today. Honua Kai is first class all the way!
May 13th, 2009 at 2:19 pm
First class right next to a sewer plant that stinks to high heaven on warm days when the wind is not blowing the smell away, also the sewer plant has had several sewage spills
mix of muddy runoff and wastewater overflowed into the ocean in Lahaina and Napili on the island of Maui in Hawaii. Health officials warned the public against entering any water contaminated by runoff. Maui marine specialists are concerned about the impact the spill will have on the coral reefs around the island. In Lahaina, an unknown amount of sewage was washed into the ocean after a spill from the Lahaina Wastewater Treatment Plant broke through a berm at Kaanapali’s North Beach. The spill was caused by a surge during heavy rain. In Kahului, approximately 1,500 gallons of wastewater overflowed into a nearby roadway on Wednesday as intense rain hit the Kahului Wastewater Treatment Plant, which generated flows beyond the plant’s capacity. “We’re not going to recover from that for a long time,” said Hannah Bernard of the Hawaii Wildlife Fund. “It will take months to clear off the reefs and in a situation like this. There could be permanent damage to our reefs. …There were tons and tons of sediment flowing into the ocean.”
- December 8, 2007: Maui News - Wailuku, Maui, Hawaii
August 29th, 2009 at 12:42 am
i am due to close escrow on my condo in dec.however my situation has changed due to leagal separation..i cannot qualify for my loan..i do have a property in maui that i was hoping to sell to cover some of my costs…however it is not selling…is it possible to get out of the contract and recover my deposit?
October 28th, 2009 at 6:11 pm
What is the latest word on whether those who are in contract on a Konea unit and can’t qualify to close? Will Honus Kai be returning their downpayments?
October 29th, 2009 at 4:38 pm
Has anyone won a lawsuit or received their deposit back?
October 29th, 2009 at 5:22 pm
To the best of my knowledge, no one has received their deposit back. Some buyers have been allowed to transfer their deposits to other units, or partner up with other buyers who have not been able to qualify on their own.