| Hawaii has a reputation for making life difficult for contractors who don’t toe the line. Sometimes the results border on the ridiculous, at least from a contractor’s perspective. Just ask Michael Sakatani, a Honolulu contractor doing business as 808 Development LLC.
A few years ago Mike’s company landed a $1.8 million contract to build a 9,000 SF home in Honolulu – in the shadow of Diamond Head and just a block from the blue Pacific. That should have been good work for Mike. But costs ran a little more than expected and relations with the owner soured. Payments stopped and you can probably guess what happened next. A team of lawyers stepped in to sort things out. The case dragged through Hawaiian courts for several years, eventually landing in the Hawaii Supreme Court.
Like many other states, Hawaii requires specific notices and disclosures in construction contracts. What’s required depends on the type of work. Mike’s Diamond Head job was residential. For residential work:
· Hawaii Revised Statutes § 444-25.5 voids any contract which omits specific notices and disclosures.
· Omission of the same disclosures is also considered a deceptive act under Hawaii Revised Statutes § 480-12, making the contractor liable for a $5,000 fine (§ 444-23).
· Failure to provide the disclosures required by Hawaii’s Code of Rules, Title 16, Chapter 77, Subchapter 12, § 79 and § 80 can result in suspension or revocation of a contractor’s license. That’s Hawaii Revised Code § 444-17.
· Hawaii’s Contractor Repair Act, § 672E-11, requires that contracts include a notice of the contractor’s right to repair construction defects.
Once Mike’s lawyers took over, they discovered a problem. One of Hawaii’s required notices was missing from Mike’s contract — the mechanics’ lien notice. Mike claimed the lien notice had been delivered as part of the contract. But he couldn’t find a copy and neither could the property owner. Read more… »