As a resident and condominium owner in the Kakaako district, I am a constituent of Speaker of the House Scott Saiki and state Sen. Sharon Moriwaki.

In 2019, I wrote to Civil Beat “An Open Letter to Hawaii Condo Owners About Proxies.” Each year thereafter I returned to the Legislature to request the support of Speaker Saiki to introduce proposals to amend condo law, Hawaii Revised Statutes 514B.

In the current legislative session, House Bill 2067 was amended and proposes to “Remove [s] from the standard condominium proxy form the option of giving a proxy vote to the board of directors of a condominium association as a whole or to directors present at the meeting. Requires a disclosure statement on the standard condominium proxy form informing unit owners that an association may direct elections by electronic, machine, or mail voting.”

Senate Bill 2404, a similar proposal, was amended to remove the proxy assignment to “the board as a whole,” and it, too, survives.

During my investigation into the introduction of new proxy choices to condominium law HRS 514B, I have some interesting findings. However, it is crucial to emphasize the importance of comprehending cumulative voting.

First, it’s helpful to understand that most associations are nonprofit corporations in Hawaii. Condo owners are stockholders and the amount of stock each owner holds varies based on their ownership interests; each owner owns a percentage of the common interests of the condominium.

In the initial development of condominium documents, cumulative voting by stockholders was introduced alongside proxy voting for board elections. For instance, if there are three positions available, each stockholder has the ability to cast three votes.

An owner can choose to allocate all three votes to a single candidate or distribute them equally among multiple candidates. It is worth noting that many owners are unaware of the concept of cumulative voting.

National Resources

The Community Association Institute is a national organization that claims to represent associations and their members. A key components of their organization is their Legislative Action Committee.

According to their website, legislative action committees work to monitor state legislation, educate lawmakers, and protect the interests of those living and working in community associations.

Each LAC is comprised of homeowner leaders, community managers, and representatives from community association business partners who they say, “graciously volunteer their time.”

Because owners may not be present to vote in their association’s elections, condominium associations allow owners to assign their voting rights to a proxy holder who votes on their behalf. The standard proxy used by most associations allows an owner to assign voting rights to an individual, or to “the board as a whole,” or to be divided equally among board members who are present at the meeting, or to be considered only for establishing the quorum.

Despite evidence that proxies may be misused, Hawaii’s CAI-LAC opposes deleting the proxy options assigning proxies to the board as a whole or to be shared equally among directors present at the meeting. The inclusion of these two options for voting by proxy, either giving the owner’s votes to the board as a whole or sharing them at the meeting, amplifies the cumulative voting effect by consolidating a significant block of votes for the board.

The recognition of the danger of these two options was introduced to the Legislature in 1984 through the testimony of Richard Port, former chair of the Democratic Party of Hawaii. In his written statement, he articulated, “With regard to the current abuse in which some boards use association funds to solicit proxies under the guise of obtaining a quorum and then using the proxies to reelect themselves or in other ways to maintain control over Association funds, which sometimes exceed $ a year, this abuse needs to be controlled.”

The main motivation behind my proposal to eliminate proxies to the board stems from the board of directors’ inability to assess the infrastructure of their buildings and prioritize maintenance and repair requirements.

Classes on HRS 514B caution board members against deferring maintenance. The practice of intentionally keeping the reserves at artificially low levels has resulted in owners, especially seniors and others on fixed incomes, bearing the financial burden of repairing and replacing building components through large financial assessments that should not have occurred if directors had to prove their diligence through unweighted elections.

Please support the deletion of the proxy options that give incumbent boards the ability to reelect themselves despite their failure to upkeep maintenance and to protect owners’ most valuable asset, their homes.