State officials have begun an investigation of one of Hawaii’s major condominium management firms, Associa Hawaii, which state records indicate has been operating without an active broker’s license required by law.

“They should not be doing any activity,” Kristen Kekoa, a real estate specialist with the Hawaii Department of Commerce and Consumer Affairs, said of Associa. “This is absolutely something we would have to take a look at.”

Kekoa’s comments came after Civil Beat inquired about listings on the Hawaii Professional and Vocational Licensing Division website that indicate Associa Hawaii’s license is inactive and that the company should not be practicing.

Advocates for condominium owners, meanwhile, say the matter underscores the power imbalance of a system in which residents often face still penalties for breaking house rules while big players like management companies can violate laws with relative impunity.

On its Instagram site, Associa describes itself as “World’s leading integrated services property management company with offices on Oahu, Kona, Maui and Kauai.”

Associa Hawaii’s president, Pauli Wong, did not return a call for comment. The company also did not respond to a request sent through its website.

Hawaii condominium law requires a property management company like Associa Hawaii, technically called a “managing agent,” to be a licensed real estate broker under Hawaii’s real estate broker law. In this case, the state’s Professional and Licensing Division website states that Associa Hawaii’s license is inactive. The page for Associa Hawaii, which allows the public to determine if a professional is in fact licensed, says, “LICENSE IS INACTIVE UNABLE TO PRACTICE.”

The next step, DCCA’s Kekoa said, will be for the department’s Regulated Industries Complaints Office to investigate and make a recommendation to the Hawaii Real Estate Commission, which will make a final determination.

William Nhieu, a DCCA spokesman, said RICO officials could not comment on an ongoing investigation.

The real estate broker statute imposes a fine of up to $5,000 for each violation of the licensing law.

Condo Owners See Imbalance In Penalties

Advocates for efforts to change Hawaii’s condo laws to give owners more power when they’re dealing with their boards and management companies seized on the issue.

Lila Mower, president of Hawaii’s Kokua Council, a citizen advocacy group, said penalties imposed on property management companies for license violations are often insufficient.

The DCCA’s Real Estate Commission, which is the backstop to protect condo owners and the public, generally does little to penalize real estate professionals for license violations, she said.

She pointed, for example, to a 2022 real estate commission action against real estate brokers Caesar Paet and Cadmus properties, who forfeited their licenses in December 2020 and didn’t restore them until June 2021.

In the interim, they “undertook activities requiring licenses,” the commission’s Hawaii Real Estate Bulletin reported. The commission imposed a fine of $1,500, the bulletin said.

“The difference in magnitude is astounding,” Mower said, comparing that penalty to what condo owners sometimes face for violating minor condo rules.

Management companies often hand enforcement of rules over to law firms that run up bills collection payment from the condo owners, which can mean thousands in legal fees on top of the original fine, she said. People who don’t pay can lose their homes through foreclosure.

“The magnitude of the penalties, it just doesn’t balance,” she said.