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Hawaii lawmakers are still considering several bills designed to make life easier for condominium owners and stem complaints about the boards that oversee their buildings, but some owners say the legislation doesn’t go far enough.
House and Senate negotiators plan to meet Monday afternoon to discuss new drafts of measures that mostly clarify existing law. More ambitious proposals, such as a bill to create a condo ombudsman office, died earlier this session.
Jane Sugimura, an attorney who has been advocating on condo issues as president of the Hawaii Council of Associations of Apartment Owners, said the bills that are still alive are in essence saying, “The statute already says this, but we really mean it.”
Case in point: The first section of House Bill 1498 requires that the employment contract for the on-site property manager at a condo be available to unit owners upon request.
Sugimura says it’s common sense that owners should have access to that information.
“That’s a fair inquiry if you’re a unit owner who pays maintenance fees,” she said.
But lack of access to association documents is also a frequent complaint. Honolulu resident Alice Clay says that she’s had difficulty obtaining the contract for the executive director of her assisted living facility, and believes that HB 1498 would help.
Clay is also happy that House Bill 832 would clarify that board members are violating their fiduciary duty if they break state law by not giving owners certain documents or refusing to go to mediation.
“It’s pretty easy to use that as a hammer because it can have an effect on liability insurance,” said Richard Emery, a lobbyist for the property management company Associa Hawaii that supports the bill.
HB832 also would require that drafts of board meeting minutes should be available within two weeks, and that condo owners should be allowed to participate in the meetings.
For condo owners, Clay says, “The right to transparency is a big issue.”
Still, not all owners are as pleased as Clay with how the legislative session is shaping up. Lila Mower, who represents a group of owners who were pushing for bigger revisions to state condo laws this year, said many owners are disappointed.
For instance, Senate Bill 369, which states that boards shouldn’t retaliate against unit owners, would still place the onus on owners to go to court if they think they’ve been retaliated against, which can be costly.
And while Mower thinks it’s a good idea that HB 1498 would prevent people who are renting space in condos from serving on condo boards, she’s worried about another provision of the bill that she believes “gives more voting power to the board and simultaneously decreases resident unit owners’ voting power.”
“With all the bills that were introduced this year, legislators must be aware of the many varied problems we owners have, but in the end, very few of our concerns garnered any respectable response from legislators,” she said. “I would venture that many of the active hui participants feel that we were given little more than ‘lip service,’ especially when we are aware of how … the condo industry is represented by legislators.”
There’s no guarantee any condo-related bills will pass. The Legislature has one more week before it wraps up negotiations, and it’s not uncommon for bills to die mysteriously at the last minute.
Dozens of proposals related to condo law have already died this session, and just a handful are left.
Rep. Roy Takumi said at a hearing Thursday that House negotiators have agreed to the Senate versions of HB 832 and HB 1498. He’s planning to present final drafts of those bills to the Senate negotiators Monday.
House Bill 1499 remains a work in progress. It has several parts, one of which states that boards would not be able to demand that owners pay certain charges — like legal fees — if the owners dispute the charges and request mediation. The only exception is common-area fees.
Takumi, who took over the job of leading the House Consumer Protection Committee midway through the legislative session, said he’s moving forward bills that House leadership and stakeholders support and isn’t pushing more ambitious measures — like the creation of an ombudsman office — because he knew little about condo legislation until two weeks ago.
“I told myself that if I couldn’t grasp the impact for the bill and the rationale for the bill and the consequences for the bill … that I would take a step back,” he said.
If similar complaints from condo owners crop up next year, he plans to introduce a bill to form a working group to study the state condo law and determine if there’s a need for comprehensive reform.
Emery from Associa said Friday that the industry is satisfied with the bills that are on track to pass this year.
“I thought session went really well this year,” he said. He’s glad, for example, that HB 832 is advancing and not the more expansive Senate version, which sought to make any violation of the state condo law on the part of a board or its members a breach of its fiduciary duty.
Emery said the industry opposed that because it would discourage people from volunteering to serve on boards.
“It would have been good if there was someplace where owners could be heard without spending money.” — Kate Paine, lamenting the death of a bill to create a condo ombudsman office
Emery also successfully lobbied against the proposal to create a state ombudsman office, which he thinks is an unnecessary expansion of state bureacracy.
But owners like Kate Paine of Moiliili worry that they have nowhere to turn to when things go wrong at their condo association. The state Department of Commerce and Consumer Affairs generally focuses on providing education and helping condo owners get access to documents, and doesn’t enforce other aspects of the state condo law.
Owners who feel that their board is breaking the law must generally file a lawsuit or seek mediation or arbitration to get the issue resolved. While mediation is state-subsidized, the cost of suing is often prohibitive.
“It would have been good if there was someplace where owners could be heard without spending money,” Paine said of the ombudsman bill. “I know somebody who spent $60,000 (on a lawsuit) and didn’t get any relief. I know somebody else who spent $20,000.”
Paine went to the Capitol to testify this year and met with lawmakers. But like Mower, she said that she’s disillusioned by the legislative process and the influence of lobbyists like Emery on the bills.
“We had so many of them and it’s going to be a disappointment to see what’s passed,” she said of the bills. “I was hoping we could make some strides in this area.”