Maealani Place, Volcano, Island and County of Hawaii - Foreclosure Notice

 From Hawaii Tribune Herald 5/21/23:

Notice #: 0001416727-01

NOTICE OF FORECLOSURE SALE CIVIL NO. 1:21-CV-00261 DKW-KJM United States District Court for the District of Hawaii MFY Funding LLC v. Ohia Opportunities, LLC; Kanoa Ross Bristol, et al. PROPERTY ADDRESS AND DESCRIPTION: Two (2) adjoining properties situated on Maealani Place, Volcano, Island and County of Hawaii in the residential project known as the Volcano Golf Course Lots and bearing Tax Map Key Nos. (3) 9-9-002: 021 and 022. A single-family fee simple home is located on the two parcels containing approximately 0.45 acres or 20,909 square feet. The house covers approximately 1,822 square feet and contains five (5) total rooms: three (3) bedrooms, two and one half (2.5) baths with kitchen, pantry and two separate spacious living and family rooms. Covered garage (approximately 600 sq. ft.); outside laundry and concrete areas (approximately 280 sq. ft.). A separate stand-alone outdoor storge building (approximately 300 sq. ft.) exists. Ample outdoor open spaces with dense vegetation. AUCTION DATE: WEDNESDAY, JUNE 21, 2023 at 12:00 O’CLOCK NOON, Front entrance to Hale Kaulike Courthouse Building, 777 Kilauea Avenue, Hilo, Hawaii. OPEN HOUSES: BY ADVANCE APPOINTMENT ONLY on Sunday, June 4, 2023 from 2:00 p.m. to 4:00 p.m. and on Sunday, June 11, 2023 from 2:00 p.m. to 4:00 p.m. To attend the open houses, you must make an advance appointment to attend the open house on the designated dates. Walk-ins will not be granted access. Please contact Commissioner to make an advance appointment. TERMS OF SALE: Property will be sold in “AS IS” condition, without any express or implied warranties or representations of any kind, at public auction with 10% of the highest bid payable in cash, certified or cashier’s check at the close of auction. THERE SHALL BE NO UPSET PRICE. Balance of highest bid shall be paid in full upon court approval and confirmation of sale. Potential bidders must be able to provide proof of ability to comply with the 10% bid requirement BEFORE participating in the public auction. Purchaser shall pay ALL costs of closing, including, but not limited to, escrow fees, recordation fees, conveyance taxes and is responsible for securing possession of the Property upon escrow closing and recordation. Neither the availability of title insurance nor securing possession of the Property shall be conditions of sale closing. Sale closing usually occurs not later than thirty-five (35) days after the entry of the order confirming sale. Real property taxes shall be prorated as of the date of closing and recordation of the documents transferring title. The Property, including all improvements, will be sold without personal property. Property is currently unoccupied. ALL SALE AND TERMS OF SALE ARE SUBJECT TO COURT CONFIRMATION. DUE DILIGENCE INFORMATION: A Foreclosure Fact Sheet containing additional limited information is available upon request from the Commissioner. The information made available has been collected from various sources including tax records, a title report, and pleadings and appears to be reliable but it is not guaranteed. Photographs are available upon request. Potential bidders are expressly advised to perform and complete their own investigation and due diligence prior to bidding. For further information, contact Wayne K. T. Mau, Commissioner, 1003 Bishop Street, Pauahi Tower, Suite 320, Honolulu, Hawaii 96813; Telephone (808) 781-8494 (cell); (808) 380-8498 (ofc.); email: (HTH1416727 5/21, 5/28, 6/4/23)

See all open houses and auctions on the calendar.

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Kyra Bronson R(B) 23930

LUVA Real Estate

What is a Tax Lien sale vs a Tax Auction? NO TAX LIEN SALES IN HAWAII!

Recently I kept seeing a Facebook ad wanting me to sign up to learn about how to buy tax liens in Hawaii.  🙄  Fortunately I know that Hawaii County doesn't do tax lien sales, they do tax auctions.  

In many counties on the mainland, instead of letting a large tax balance build up over several years and then doing a foreclosure, those county tax offices auction off tax liens.  Typically you pay ONLY the amount of taxes owed, and the bidding is for the interest rate you will receive if the owner pays it off.  It starts at 18% and you bid down to zero.  The bidder who bids to pay off that year's taxes in full at the lowest interest rate wins the lien.  The following year, that same bidder is given the opportunity to again pay off the taxes for a tax lien.  Once there are three years worth of liens, the bidder may take the property to court for tax foreclosure.  This system is much more fair to the owner because they get three years to pay off their tax liens, and they are only required to pay the taxes plus the interest rate the bidder bid.  It's also much nicer for the bidder because although they have to wait through a three year process, they have the chance to obtain a property for ONLY the past due taxes, no bidding up.  

Contrary to this commonly used tax lien system, Hawaii County does a tax foreclosure.  They let the amount of taxes pile up for three or more years, and then take the property to auction where the amount gets bid up, sometimes to $100k or more over the tax liability.  This is very unfair to the prior owner who then has to come up with all of that extra money, at 12% interest, if they want to redeem their property.  It is also not nearly as lucrative for the bidder since they are getting the properties at close to market value, not nearly the bargain they deserve since they are buying a property that now has a tax auction in the chain of title.  The one big benefit is that the foreclosure part is already done.  Unlike the tax lien system where the bidder is responsible for finalizing the foreclosure, in Hawaii the county does that step.  

So, don't get duped and sign up for a class on how to buy Hawaii tax liens.  We only do direct tax foreclosures here!  

Tax Lien System

Tax Foreclosure System

Bidder must buy three consecutive liens, then bidder forecloses.

County accumulates a tax owed balance for three or more years, then county forecloses.

County get their taxes paid in full every year.

County has huge amounts of taxes due while they process the foreclosures.

Bidding is on the interest rate, starts at 18% (depending on county) and bids down.

Bidding is on the purchase price.  Starts at taxes owed plus legal fees and goes up.

Owner still owns – can pay off tax liens through the county and the county pays back the bidder.  Much easier to pay off because it is ONLY taxes owed plus interest.

Bidder owns immediately.  Prior owner has one year to redeem the property directly from the bidder by paying the winning bid amount + 12% + all escrow fees.  Difficult to pay off because it is the market price bid at auction plus interest and escrow fees.  Typically a lot more than what was owed in taxes.  County does not assist in the redemption process.  

Bidder must foreclose after three years

County forecloses as part of the process

Usually online bidding

In person bidding

County of Hawaii Tax Auction June 2023

It's that time of year again!  The Hawaii County Tax auction has been scheduled for June 8th at the Afook-Chinen Civic Auditorium starting at 9am.  

Here is a link to the county site with the auction list and the folder full of litigation guarantees:

Here are the links to understanding tax auctions: 

Hawaii County Tax Auction FAQ

How to work the tax list to prepare for auction

And finally, a recap of January's auction so you can see how it might go: 

January 2023 tax auction recap

January's auction was held at the Sangha hall which was a great location inside, but the parking situation was dismal.  This year it looks like it will be back at the Afook-Chinen Civic Auditorium which had tons of parking but it was very difficult to hear what was happening.  I miss the days when the attendance was low enough that the auction could be held at Aunt Sally's.  

The publication of the list was also different this year, so maybe attendance will be down.  Typically the list is published along with bank foreclosures and association foreclosures in the online classified section of the West Hawaii Today and the Hawaii Tribune Herald.  This year, for some reason, it was only published in their print or online print-reader version, so if you didn't have a paid subscription to the paper, you wouldn't have seen the notice. I only saw it because I routinely check the county site for it starting in December and May.  

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