11 Things to Investigate Before Buying Vacant Land on Maui (Part 1 of 3)
Back in the year 2000, my wife and I wanted to take the first step in building our dream home on Maui, so we bought our vacant lot. Having been a vacant land buyer, owner, going through the most of the building process on Maui and helping numerous clients become vacant landowners I have come to the conclusion that a prospective land buyer needs to explore 11 distinct topics before they buy. I plan to write a series of blogs on buying Maui vacant land. The goal of this first blog is to give you an introduction to the first few of the 11 topics. The first three blogs in this series won’t discuss any particular subdivisions or compare subdivisions, but they will lay the foundation for future blogs where different developments and options will be discussed.
The island of Maui is only 727.2 square miles, and in that small space, there is a huge diversity depending on where you are on the island. A number of the topics we will explore will be dependent on the location including weather, views, lifestyle, and price. For example, if being close to the airport is important to you, then living in Hana may not be ideal, as my iPhone says it will take 2 hours and 11 minutes to get from Hana to the airport. I will come back to the topic of location in the next two blogs as all real estate is about location, location, location.
The topic of zoning could fill a book. I will try to keep it as simple as possible for this overview blog. Zoning will dictate what you are allowed to build and not build (including sizes) AND what you can do and not do on your lot. The three major zoning classes a typical vacant land residential buyer will encounter on Maui are Residential, Rural, and Agricultural. Residential zoning has four sub-classes, Rural has five sub-classes, and there is currently only one agricultural zoning. Residential and Rural zoning, which are defined and enforced by the County of Maui, have the same rules concerning accessory dwelling (aka ohana or cottage). The rules are dependent on lot size, and the lot size dictates the allowed maximum size of the accessory dwelling and the number (max 2) of accessory dwellings.
The rules for ag zoning are different from residential and rural in part due to the State of Hawaii having their own rules that apply to ag land. For simplicity, on ag land, you are allowed a main dwelling, one accessory dwelling, (max 1000 sq ft of living space), a detached garage and barn. There are exceptions to this rule of thumb when you begin to generate significant farm revenue on your lot, the details of which are beyond the scope of this blog.
To keep it simple, if you would like to build two accessory dwelling on your lot, in addition to the main house, you would need to find a lot zoned either residential or rural, with a minimum of 7500 square feet of space. The size of the accessory dwelling is dependent on lot size. The maximum accessory dwelling size of 1200 sq ft of living space requires at least a two-acre lot. If you only plan on building a main house or a main house with only one accessory dwelling and are willing to engage in some sort of agricultural pursue, then including ag land in your search would be appropriate. Just so you know what I did, I have a 3.5-acre ag lot.
3. CPR (Full lot or a partial lot)
CPR stands for Condominium Property Regime. “A CPR is a legal mechanism (Hawaii Revised Statutes 514B) for dividing a single property into 2 or more separate UNITS OF OWNERSHIP, typically with attached “appurtenant” exclusive-use LIMITED COMMON ELEMENTS (yard areas). Each CPR unit has its own separate fee ownership (deed), mortgages, encumbrances, and CPR TMK NO. (which is found at the end of the property Tax Map Key No.).” Source: Jakob K. Wormer Condominium Property Regime Basics Class. The most important thing to know is that a CPR property remains a single parcel for all State and County Zoning and Building Code purposes. This means if you buy a CPR, you are entering into a partnership with the person(s) owning the other unit(s). In your CPR ownership, you may have the rights to the main house or an accessory dwelling or possibility to neither.
My advice is first to determine if the listing you are looking at is a full lot or a CPRed lot. The easy way to know is to look at the TMK number of lot and if the last four digits are not “0000,” but rather “0001,” “0002,” or “0003,” then you are looking at a listing for a CPR. If you are considering a CPR, consult a CPR attorney to learn what you can and can’t do with your lot, along with the risks of entering into such a partnership. I have helped clients sell a CPR, but for my personal ownership, I am not a fan. Then again, I failed kindergarten as I didn’t play well with the other children, so being in a partnership is not ideal for me.
Some of you reading this blog will say that a lot that is in a subdivision with a Homeowners Association is an advantage, and some of you will say it is a disadvantage. The person that says this is a disadvantage will say they don’t want some HOA Board telling them what they can and can’t do on their lot, i.e., that there are rules. The person that says this is an advantage will say they like that the HOA Board will tell their neighbor what they can and can’t do on their lot, such as keeping it looking nice. The disadvantage of having an HOA that everyone agrees on is that there are HOA dues. The advantage is that some of these dues are used to maintain common areas that can lead to making the neighborhood looking nice. An HOA, in some cases, maintains the private roads, gates, and signs. This is a very personal choice. Regardless of what camp you are in, you will want to know if an HOA exists or not. Two questions to ask if there is an HOA, how soon do I need to build and do I need to maintain my lot before I begin building? If you are curious, my lot is in a development with an HOA, and yes I have served on the board.
Hopefully, this blog has given you some things to think about when you are considering owning vacant land. Read part 2 of Buying Vacant Land on Maui, considerations 5 through 8.