Here is a case with relevance to the Ilikai lawsuit against Shell Vacations Club (“Shell”) to cease timeshare operations at the Ilikai: O’Connor v. Resort Custom Builders.
In this case, some individuals (“appellees”) owned a home in a subdivision located in a resort area. These appellees sought to sell interval ownership interests, or timeshare, for that home. However, the subdivision had a restrictive covenant stating that the homes were to be occupied for residence purposes only. Appellants sued to prevent appellees from selling interval ownership interests, i.e., timeshare, in their home. Appellees in turn claimed that other communities in the area permitted timeshare, and that they should be allowed to do the same. They also pointed that the subdivision covenant did not explicitly prohibit timeshare. They also claimed timeshare was similar to rental of property, and that they should be allowed to proceed with timeshare because it was similar to rentals. The lawsuit outcome was this: The court ruled that appellants had a right to restrict the use of the land in accordance with the restrictions delineated in the subdivision covenant, – i.e., not allowing timeshare. The court also ruled that it was immaterial that other entities in the same community had permitted timeshare. The court also ruled that rental of property was not equivalent of timesharing.
The arguments by the individuals attempting to sell timeshare in the above case show similarities to the arguments by Shell and some brainwashed-by-Shell individuals, incl. some brainwashed-by-Shell Ilikai owners. Brainwashed-by-Shell individuals claim that timeshare is permitted in other properties in Waikiki, that the Ilikai covenants (Declaration and Bylaws) do not explicitly prohit timeshare, and also claim that timeshare is supposedly no different than rentals – that’s the common arguments by the brainwashed-by-Shell individuals. (P.S.: I do fully recognize the importance of Hawaii specific statutes and cases.)