KAILUA — The state Regulated Industries Complaint Office is investigating how some individuals and companies are advertising, promoting and managing vacation rentals that might be illegal.

The probe is the latest development in an issue that has pitted neighbor against neighbor for years, with some who decry the added traffic and noise from vacation rentals, and others welcoming the money they can bring to a community.

An estimated 1,200 vacation rentals are run illegally on O'ahu.

Keep It Kailua, a group that has been pushing for a crackdown there, said in an e-mail it had asked for the RICO investigation of seven people and companies.

According to the group, the complaint filed with RICO alleges the individuals are associated with real estate companies and possess real estate licenses and, as such, are required by law to disclose in advertising that they are representing illegal vacation rentals.

No such disclosure was made in the advertising and promotion of the rentals by these individuals or their real estate companies, according to a statement by Keep It Kailua.

"In spearheading the effort to eliminate illegal vacation rentals, Keep It Kailua has now focused on promoters and managers of illegal vacation rentals," said Don Bremner, spokesman for Keep It Kailua.

JoAnn Uchida, RICO complaints and enforcement officer, confirmed that her office is conducting an investigation.

Uchida said she couldn't comment on the progress of the case, nor say who is being investigated.

"Ultimately, it's our call," Uchida said. "There may not be a direct correlation between the information that was presented to us in the complaint and the people we're actually looking at."

RICO is responsible for enforcing the state's licensing laws for certain professions, including real estate agents. It has the power to impose civil or administrative penalties, ranging from a fine, or suspension or revocation of a license, or an injunction against the unlicensed person or entity, according to its Web site.

INVESTIGATION DECRIED

Powell Berger, with the Kokua Coalition, which is seeking changes to the law pertaining to vacation units and an increase in their number, said the call for an investigation is another way to split the community.

"I think it's unfortunate that Mr. Bremner has an ax to grind," Berger said. "We'd really like to work with him to find a solution."

Controversy over the expansion of rentals has led the city to begin issuing fines that can reach up to $1,000 a day to property owners illegally using homes for vacation rentals. City ordinance requires owners to rent their properties for at least 30 days at a time or face fines.

A limit on bed-and-breakfast operations and transient vacation units was set in 1989 over a concern about their proliferation and impact on residential communities. An estimated 1,200 short-term vacation rental units are being operated without proper permits on the island.

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com.