Critics say oversight by state Real Estate Commission means owners get short-changed in favor of associations, management firms and lawyers.
The Hawaii Department of Commerce and Consumer Affairs billed its “Condorama,” held in late April, as an educational program for the public.
“Brought to you by the DCCA Real Estate Commission to empower owners about your rights,” a flyer mailed to residents said.
But critics say a basic aspect of Condorama runs counter to the idea that the department and Real Estate Commission are committed to empowering condo owners. To run the event, the department chose a real estate trade group that routinely lobbies against bills to strengthen the rights of condo owners.
Called the Community Associations Institute, the organization is composed of condominium associations “as well as those who provide services and products to these associations,” the group’s website says.
The directors of the Hawaii chapter include a partner in a law firm recently found liable for violating state and federal laws during a legal battle with a condo owner over a dog and the president of a management company that recently operated for months without an active license, in apparent violation of state law.
The result is an educational program that’s far from balanced when discussing the rights of individual owners versus the rights of the associations, management companies, lawyers and other professionals whom the institute represents, said Greg Misakian, a member of the Waikiki Neighborhood Board, who also serves on the board of the Keoni Ana condo association.
Misakian said the consumer affairs department has ceded power to a handful of industry insiders.
“I’ve lost all faith in the DCCA,” Misakian said.
Real Estate Commission Chairman Derrick Yamane said the commission is trying to provide information to help condominium owners. But he said he could not comment about this year’s Condorama.
Playing Field Is Tilted Against Owners
For activists like Misakian, Condorama illustrates what he says is a broader problem with Hawaii’s condominium communities. The legal playing field, they say, is tilted against individual owners in favor of the ecosystem that the Community Associations Institute comprises: association boards, management companies and lawyers and consultants.
Condominium communities are generally self-governing, under the rule of elected association boards that hire management companies for daily operations. But the rules of self-governance are outlined in state law, which the DCCA and state Real Estate Commission are in part responsible for administering.
Like many boards and commissions, the Real Estate Commission is designed to be made up largely of industry professionals who understand the industry they regulate. Among other duties, the Real Estate Commission is responsible for regulating condo associations and management companies, which are required to maintain active broker licenses administered by the commission.
By statute, the commission is composed of nine members. At least four of the members are required to be licensed real estate brokers. One of those four is required to be commission chair. The law requires two of the nine commissioners to be “public” members.
In practice, all of the members are industry types. Seven are brokers, including Richard Emery, the principal broker of the four-person Hawaii First Realty, which Emery runs from his home in Kahala.
Emery has come under particular criticism for lobbying on behalf of Associa Hawaii, one of the state’s largest management companies, before joining the commission. Since joining, he has continued to testify before the Legislature, although in his personal capacity, not for Associa.
Robert Harris, executive director of the Hawaii State Ethics Commission, declined to comment on Emery’s situation but said the state ethics law generally applies to current business relationships, not previous ones. Accordingly, Emery’s past relationship with Associa Hawaii wouldn’t disqualify him from serving on the commission or even voting on matters involving Associa.
As for a commissioner testifying for or against laws the commissioner might end up enforcing in contested case hearings in his role as a regulator, Harris said that also didn’t pose a problem under the ethics code. However, he said it could raise questions about the commissioner’s bias that could become an issue in the litigation.
Emery said he does not see a conflict that prevents him from serving as a commissioner. Commissioners routinely recuse themselves from voting on matters where they might have a conflict of interest.
As for testifying before the Legislature, Emery said he didn’t give up his right of free speech when he volunteered to serve.
“I’ve been in the industry for 32 years, and I have a right to express my opinion,” he said.
The two public commissioners also are industry professionals: John Love, a partner with the corporate law firm Cades, Schutte and Nikki Senter, assistant general counsel for the Howard Hughes Corp., a Texas-based company that’s the owner and developer of Kakaako’s Ward Village.
Given the commission’s composition it’s hardly a surprise that the commission would pick the Community Associations Institute to educate the public about the rights of condo owners, Misakian said.
“It’s not a surprise. It’s by intent and design,” said Misakian, who is also a vice president of the Kokua Council, which advocates for seniors. “Clearly it’s a group of people who appear to be in control of something where they’re profiting.”
Condorama Focused On Concerns Of Associations, Not Owners
DCCA records show the state awarded the Community Associations Institute $19,500 for online training services in 2023. According to DCCA’s flyer, funding for Condorama came from DCCA and a special educational trust fund financed by condo owners.
The institute routinely testifies against measures that would give owners more power. For instance, CAI testified against a 2023 measure that proponents said would have made it easier for owners to vote out bad boards by replacing a proxy voting system for board members with one that allowed direct votes. A 2022 bill opposed by the institute would have prevented what supporters described as excessive legal fees from being imposed on condo owners by association lawyers.
The institute’s directors include Chris Porter, a partner with the firm Porter McGuire Kiakona, which in 2022 was slapped with $475,000 in actual and punitive damages after a federal jury found the firm violated federal debt collection and state privacy laws when fighting a condo owner in a dispute over his dog. The case later settled for an undisclosed amount.
Speakers included Joshua German, an account executive with Insurance Associates Inc., who talked mainly about insurance policies for board directors. Kanani Kaopua, a senior vice president with Hawaiian Properties Ltd., discussed how boards can determine why maintenance fees are increasing. Lawyer Melanie Oyama provided an overview of processes for associations to make and enforce rules and resolve disputes with residents.
Misakian acknowledged the information was useful for associations and board members, but, he said, not for owners.
For example, Misakian said it would be helpful to include content letting owners know what rights they have to file insurance claims to cover water damage caused by faulty pipes outside of their units. Another issue commonly in dispute is the scope of the rights condo owners have to speak at board meetings.
“The training isn’t fair and equitable for both sides,” he said. “There’s so much more that should be included but isn’t.”
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