Phase V Lease Redetermination settlement

Aloha Phase V homeowners,

The Association has reached an agreement with the Master Lessors as to the minimum rent they will receive for the period beginning January 1, 2014 through December 31, 2023.  As you should be aware, your apartment lease is with Moana and under the terms of your lease the minimum under the Master Lease is increased by 25%.  As a consequence the minimum rent you will owe Moana will be $564.24 a month.  Under the terms of your lease, each beachhouse in Phase V pays the identical amount of minimum rent. 

We understand that this is a substantial increase from what you have been paying but when compared to what the average rents your Phase has been paying, taking into account the average measured rent, it appears the increase is only about $150 a month. The new minimum rent is for the year beginning January 1, 2014.  You are likely to still receive a bill for additional rent for the 2013 year.  For at least the next several years, you will probably not have responsibility for additional rent beyond the new minimum rent.

As part of our negotiation of the new minimum rent the Association retained an appraiser who was preparing a report to present to an appraisal panel if we had not been able to reach an agreement.  We requested his opinion as to whether we should accept the agreed amount and he recommended that we accept it.  It is very close to the amount he had tentatively determined he would present to a panel.

This amount of measured rent is much less than the most of the other Phases are currently paying.  As a point of comparison the minimum rents paid by the Garden Units in the other phases are:  Phase II - $853/month; Phase IIIA - $735/month; and Phase IV - $707/month.  Phase IIIB has a minimum rent of only $408 but that Phase does not have the sandwich lease which contains a 25% override.  If it was subject to the 25% sandwich lease the minimum rent would be $510/month. Its minimum was agreed to approximately 5 years ago.

Assuming we can implement this agreement the bills you receive for January 1 will reflect this new amount. We understand that Moana will be sending you coupon books reflecting this new amount.

Ben Miller

President

Association of Beachhouse Owners of Kiahuna Plantation