Homeowner surprised by unwanted house, refuses developer’s offer for alternate lot

In an unusual real estate mix-up in Hawaii, a woman found herself embroiled in a legal dispute after discovering a $500,000 home mistakenly constructed on her vacant lot. Annaleine “Anne” Reynolds, who purchased the one-acre lot in Hawaiian Paradise Park on Hawaii’s Big Island for about $22,500 at a county tax auction in 2018, was taken aback when a real estate broker informed her of the accidental construction.

The error occurred when Keaau Development Partnership, the local developer, hired PJ’s Construction to build several homes in the subdivision but ended up building one on Reynolds’ property instead of a lot owned by the developer. This mix-up has since led to a complicated legal battle involving Reynolds, the construction company, the architect, and other parties.

Reynolds rejected the developer’s proposal to exchange her lot for a neighbouring one of equal size and value, a decision supported by her attorney, James DiPasquale. DiPasquale emphasized the importance of setting a precedent that property rights cannot be overridden by unauthorized construction activities.

The case highlights the challenges of managing property development in areas like Hawaiian Paradise Park, where lots are often indistinguishable from one another in the dense, jungle-like environment. Peter Olson, representing the developer, accused Reynolds of attempting to leverage the construction error for financial gain by rejecting the offer for an identical lot.

The developer has taken legal action against Reynolds and other parties involved, while Reynolds has filed a counterclaim denying any knowledge of the unauthorized construction. Meanwhile, the situation has reportedly led to issues with squatters inhabiting the unoccupied house, further complicating the dispute.

This legal entanglement underscores the importance of diligent property and construction management, especially in regions where geographical and environmental factors can contribute to confusion. As the case unfolds, it serves as a cautionary tale for developers, contractors, and property owners alike.