Oahu’s stunning North Shore, with its alluring, deep blue ocean and prime surf breaks, is increasingly resembling a game of real estate hot potato as oceanfront property owners unload homes that are increasingly threatened by erosion.
But some buyers have complained that they weren’t fully apprised of the risks, and two California residents are now suing. They say that Rupert Oberlohr, who sold them a Sunset Beach property, and his real estate agent engaged in deceptive practices by not fully explaining the risks posed by the eroding shoreline.
Oberlohr strongly denies the allegations, saying through his attorney that the real reason the new owners were suing him is because their business plan of using the property for vacation rentals fell through.
California residents Peter Rudisill and Kristjan Higdon purchased the property at 59-175-B Ke Nui Road for $1.9 million in 2019. An advertisement listed by real estate agent Julia Napua Fetzer of Hawaii Life described it as a “beachfront paradise.” The main three-bedroom house has a lanai, which the ad said was an ideal spot for watching waves, as well as a two-bedroom house in back. A picture shows a wide beach extending out from the property.
But that wide beach is deceptive. At certain times of the year, the beach narrows substantially as the direction of swells shifts. All of a sudden, the shoreline can become dangerous, as Oberlohr experienced firsthand in January 2014, when 50-foot waves pummeled the North Shore.
Oberlohr, who had owned and lived on the property since the 1970s, joked to Hawaii News Now at the time that either the ocean or his ex-wife would end up taking his house.
The situation along that stretch of coastline between Rocky Point and Sunset Beach has worsened in recent years. In a desperate attempt to save their homes, property owners have been maintaining massive “burrito” systems containing long sand- filled tubes and heavy black tarps on the beach without authorization, and illegally dropping boulders and building seawalls.
One of the homes along the stretch actually fell onto the beach earlier this year, and in recent years others have looked to be teetering atop an increasingly high sand berm.
Rudisill and Higdon say that when they bought the property, they weren’t apprised of the risk in a lawsuit filed in 2021 against Oberlohr, Fetzer and Hawaii Life in Oahu’s 1st Circuit Court. The lawsuit claims Oberlohr’s disclosure statement lied about the property not being in a special management area — a coastal area that has special controls on development to protect sensitive natural resources — and didn’t disclose that he had been pulled into litigation related to neighbors Denise and James O’Shea’s alleged construction of an illegal seawall.
The O’Sheas filed a claim against Oberlohr that said he had done unpermitted work on his property and that his retaining wall partially collapsed in 2018.
Rudisill and Higdon also say in their complaint that they received a violation notice from the state Department of Land and Natural Resources in 2020 that revealed facts not disclosed by Oberlohr or Hawaii Life. They say they weren’t told that DLNR had given Oberlohr temporary permission to install a burrito system in 2018 because major erosion threatened the property.
DLNR’s violation notice also said that approval of the burritos was contingent upon Oberlohr removing debris from his failed retaining wall, including concrete and wood, which Rudisill and Higdon said he didn’t do.
The burritos have been expired for over a year, and like dozens of other property owners on the North Shore with expired permits, Rudisill and Higdon have refused to remove them.
Their complaint alleges that “Oberlohr concealed the erosion problems with the property in order to increase its marketability” and that Oberlohr used photos in the property’s marketing materials where sand was covering the burritos and debris.
Rudisill and Higdon are seeking to rescind the sale, triple damages from Hawaii Life for alleged violations of Hawaii real estate laws, and unspecified punitive damages. A recent attempt to settle the lawsuit was unsuccessful, according to court documents.
Rudisill and his attorneys declined to discuss the litigation.
An attorney for Oberlohr said there was no basis for the lawsuit and that the owners were really suing because shortly after the sale, the City and County of Honolulu cracked down on vacation rentals.
“This meritless lawsuit filed by the plaintiffs, two California real estate investors, is not about failure to disclose conditions about the property,” said Sunny Lee, an attorney with Honolulu’s Bronster, Fujichaku and Robbins, by email. “Instead, this case is about buyer’s remorse.”
Lee said Rudisill and Higdon’s business plan to conduct short-term rentals at the property failed after the Honolulu City Council passed Ordinance 19-18 banning short-term rentals of less than 30 days. The law was passed four days after they bought the property from Oberlohr.
Lee also said that Oberlohr had clearly disclosed the property’s erosion issues and that the new owners even signed an “oceanfront addendum,” which warns that certain properties located in areas with high waves may be subject to damage and that coastal owners can lose portions of their property if the ocean migrates inland.
Lee said the new owners were given a copy of the temporary permit DLNR had issued Oberlohr in 2018 for his burrito system and that Hawaii Life’s Fetzer had told the agent for Rudisill and Higdon the property was in the special management area. Lee also said the new owners were aware of the O’Shea litigation before closing on the sale and that the litigation doesn’t affect the property.
“Mr. Oberlohr denies any wrongdoing and looks forward to proving his case at trial,” said Lee.
