Sublease issue in claims court

LIHUE — A lease and sublease to a vacant building is the subject of a small claims case in Kauai District Court.

Phillip White and Phyllis Richards filed a claim in Kauai District Court of the 5th Circuit on July 21 alleging careless and fraudulent business practices and false representation. It names defendants Guang Bin Lin, HRT Realty and Weinberg Foundation.

It claims that Bin Lin subleased the property to White and Richards unbeknownst to the property’s owner, HRT. Bin Lin leased the property from HRT in 2009 and subleased it to White and Richards who put in thousands of dollars in renovations before the county stopped the work because the HRT hadn’t signed off on the permits.

The building is the spot of a former automotive stereo store that last housed Oki Diner that closed in 2011. It sits between McDonald’s and The Garden Island at 3-3131 Kuhio Highway.

Bin Lin leased to White and Richards as Off Da Hook-Ah, LLC, a Waimea-based company in January. The five-year lease required White and Richards to pay $3,500 monthly rent with a five-year extension option at $4,000 per month, and tenant responsibilities to include general liability insurance, annual property taxes and property insurance, according to the complaint.

By March, the costs to establish Off Da Hook-Ah Ultralounge were $47,648.91 for expenses in demolition, repairs, renovation, labor, materials, licenses and permits. But, according to the complaint, all work came to a halt when the county intervened saying the permits were not valid without HRT approval.

White and Richards contacted Bin Lin, saying they believed the lease agreement was a deliberate and planned attempt to obtain financial gain through deception. A letter to Bin Lin demanded a return of payment.

Bin Lin responded to White and Richards in writing, claiming to owe them nothing because they violated the “colleague agreement” that resulted in the cancellation of the lease. The leasers were conducting an “illegal party” on the property, the letter stated. The county posted a red notice on the building to cease the illegal party.

Richards said the posting was from the Public Works Building Division for conducting renovations without proper permits. The permit issue arose once it was discovered that HRT had no knowledge of Bin Lin’s lease agreement to Off Da Hook-Ah.

Richards said they would like to complete the project at the same location through a direct lease with HRT Realty.

“That would be a great opportunity,” she said. “Otherwise, we will be looking to recoup our losses, either through HRT, Weinberg or Bin Lin.”

The property owner, HRT Realty, LLC, through its attorney Reuben Wong, informed Bin Lin on April 23, that HRT does not consider itself involved in the claim and has no contractual relationship with White and Richards. The letter added HRT would look to Bin Lin alone for any damages and liabilities with the building resulting from the sublease.

Attorney Kai Lawrence is representing HRT Realty and Weinberg Foundation in the case. Lawrence did not return messages to TGI. Bin Lin’s attorney Randal Char also did not return messages.

A trial date is scheduled for Oct. 10.

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