Lawmakers killed bills to make it easier to oust bad board members and create a condo ombudsman.

To supporters of House Bill 176, it seemed like a no-brainer: eliminate a complicated proxy system and make condominium board elections more like state and federal elections by letting condo owners who can’t attend the annual meeting submit write-in ballots.

But like other measures proposed to tweak Hawaii’s condo law this session, the bill, which also would have made it easier for condo owners to vote out bad board members, went nowhere. Facing opposition from condo associations — and lawyers, lobbyists and consultants who work for them – the measure stalled without a vote in the House Consumer Protection Committee.

The idea of mail-in ballots for condo elections seems logical in an age when voters routinely use such ballots to elect governors and presidents, said Karin Lynn, a condo activist who publishes an email newsletter for owners of the Marco Polo condominiums.

But, she said, opponents of change can persuade politicians by simply saying, “There’s nothing to fix.” 

A condominium activist who publishes a newsletter for owners of the Marco Polo building asked why lawmakers won’t support a law to let condominium owners use absentee ballots to elect condo board members when such ballots are routinely used to elect governors and U.S. presidents. (David Croxford/Civil Beat/2023)

HB 176 wasn’t the only condo bill that died during the legislative session that ends Thursday. While a handful of condo bills have advanced to the cusp of becoming law, others favored by owner advocates like Lynn have stalled. That means the Legislature won’t give condo owners many new tools to deal with bad condo boards this session.

Also failing were another bill related to condo elections and a bill to establish a condo ombudsman to help owners resolve disputes with boards. Yet another bill, giving owners more ability to sue developers for the cost to repair construction defects, was vetoed by Gov. Josh Green. The Senate has voted to override the veto, but the House has not.

At this point, Lynn said, trying to reform Hawaii’s condo laws in a meaningful way seems like tilting at windmills.

“I’ve just lost faith in all legislators from the local level and up,” she said.

State Condo Law Affects Lives Of 1 In 4 Residents

Condo associations are often likened to private governments. Elected board members have the power to impose fees, establish rules, fine owners for violations and even take owners’ properties through foreclosure.

There were 1,826 condo associations representing 173,036 units in Hawaii in 2021, according to the most recent data from the state Department of Commerce and Consumer Affairs.  Industry experts have estimated that condo and community associations govern some 360,000 people – or about 1 in 4 Hawaii residents.

Given the power associations wield over so many residents, people like Lynn say boards should be more accountable to owners. Although condominium communities – technically called condominium property regimes – are generally self-governing, the Legislature creates a framework for self-governance through Hawaii’s condominium statute, which is often a subject of battles at the State Capitol.

Just about every legislative session, lawmakers introduce bills proposing to tweak the condo law. Sometimes they pass, including measures in 2018 and 2019 that provided relief to owners. One prevented associations from foreclosing on owners for failure to pay debts on non-essential matters like legal fees or fines for alleged house rules violations.

The other measure established a priority of payment law, so associations must apply payments by owners first to condo maintenance dues. Previously, the law allowed associations to use owners’ payments first to pay the lawyers, which would cause an owner to accrue delinquencies in condo dues that could justify a foreclosure to sell off the owner’s home.

In previous years lawmakers have changed Hawaii’s condominium statute to offer more protections for owners. House Speaker Scott Saiki, whose district includes Kakaako and Ala Moana, said it might be time for a comprehensive review of the law. (David Croxford/Civil Beat/2023).

This session lawmakers pushed forward several bills related to condos.

One bill requires the Hawaii Real Estate Commission, which regulates condo boards, associations and management companies, to develop a curriculum for board members. Although the measure doesn’t require any board member to study the curriculum, that could be required in the future, said the bill’s sponsor, Sen. Sharon Moriwaki, who represents the condo-dense neighborhoods of Kakaako, Ala Moana, McCully and Waikiki. 

“Once we create the curriculum we can require it, hopefully,” she said.

Another measure focuses on enhancing legally required studies conducted for associations to determine how much money they need to keep in their reserve coffers to pay for anticipated maintenance and repair, a measure intended to help prevent owners from getting slapped with big unexpected assessments.

Yet another bill on its way to passing, sponsored by House Speaker Scott Saiki, establishes a “Condominium Property Regime Task Force” that will among other things evaluate issues regarding condos and assess systems for resolving disputes established by the condo law.

Lila Mower, a longtime advocate for condo owners who serves as president of Hawaii’s Kokua Council, said such bills stop short of changes needed to level the playing field for owners trying to hold their associations accountable.

“It’s fine and dandy that they do these curricula and task forces and all these things,” she said. “But we’ve seen studies and task forces, and we haven’t seen the enactment of what they discover. I don’t think that intermediate step is necessary.”

Mower acknowledged the bills she and her colleagues support might have flaws, but she said she wished lawmakers would embrace them.

For his part Saiki said lawmakers are trying to get the Real Estate Commission to take a more active role regulating boards and management companies. He also said it could be time for the Legislature to review the condo statute entirely, something that hasn’t been done in more than a decade.

“That’s a likely scenario,” he said. “It’s timely to reassess the condominium statute in our state.”

Kim Coco Iwamoto at Margaritas Hawaii during a gathering she had on the weekend announcing running for House District 26 seat.
Kim Coco Iwamoto, a former Hawaii School Board member who narrowly lost a bid for Scott Saiki’s seat in 2022, is calling for greater consumer protections for condo owners. (Cory Lum/Civil Beat/2022)

To illustrate her assertion that lawmakers know the problems but lack the will to fix them, Mower points to legislation proposed in 2022 by Saiki and Stanley Chang, chairman of the Senate Housing Committee.

The House and Senate companion bills would have changed the condo statute to prevent what the measures called “excessive fees” owners can be forced to pay lawyers hired by boards to take action against the owners. 

The bills would have remedied a perverse provision of the condo law that now allows associations to force owners to pay thousands of dollars in fees to lawyers enforcing house rules violations that could merit fines of just a few hundred dollars, or no fines at all. The bills proposed by Saiki and Chang would have eliminated that activity by shifting payment of the legal fees from owners to condo reserve funds.

Saiki’s bill failed to make it out of its first committee. Chang’s Senate version never had a hearing.

Mower said this raises questions about the commitment of lawmakers to back bills they sponsor.

Kim Coco Iwamoto, a former Hawaii School Board member, is picking up the cause of condo activists like Mower in an ongoing push to win Saiki’s seat in the House, in a district which encompasses Kakaako and Ala Moana. In 2022, Iwamoto lost by just 151 votes, with 2,510 to Saiki’s 2,661.

To drum up support, Iwamoto has sent informational flyers to district residents and helped draft a resolution adopted by the Ala Moana/Kakaako Neighborhood Board calling for change. Iwamoto knows she can defeat Saiki in the next election in 2024 by flipping the votes of fewer than 100 frustrated condo owners in a district where thousands of condo owners live.

But even if she can’t flip enough voters to win, Iwamoto said, she hopes to pressure Saiki to take seriously the concerns of condo owners.

“Maybe he’ll listen if I take this on as an issue as well,” she said.

Moriwaki said she and Saiki do take seriously the concerns of condo owners. That’s why they want to create a task force to systematically review the condominium statute, she said.

Based on the task force’s findings, lawmakers can “come back with a comprehensive package next time” to amend the condo statute, Moriwaki said.

Help power our public service journalism

As a local newsroom, Civil Beat has a unique public service role in times of crisis.

That’s why we’re committed to a paywall-free website and subscription-free content, so we can get vital information out to everyone, from all communities.

We are deploying a significant amount of our resources to covering the Maui fires, and your support ensures that we can pivot when these types of emergencies arise.

Make a gift to Civil Beat today and help power our nonprofit newsroom.

About the Author