Finally, Real Condo Law Enforcement?

by Marcia Kimura

The notion of condominium self-government presupposes that owners will accept as absolute and final, the rulings of Boards of Directors and association management companies. As such, it is a structure doomed to failure, not only as a result of patently expedient regulations by and for management, but also as a system in which many disputes inevitably end in costly litigation in our courts, when the constitutionality of condo policies is challenged. Owners who experience widespread abuse by management and attorneys, of assessments against them resulting from fraudulent violations, and who have lost their homes as a consequence of such actions can attest to this “par for the course” nature of condo home ownership.

Currently, one of the dispute settlement options Hawaii condo regimes offers is evaluative mediation in which mediators assigned to hearings are supposedly trained and knowledgeable in condominium governance. Settlements based on suggested solutions by a mediator are entirely the mutual decisions of both parties. Records which may include the evaluative type of mediation, for the period July 2015, the inception month, to September 2016, indicate that of the 43 total cases submitted, only 17 were mediated to agreement, - hardly the resounding success the condo management industry and its attorneys credit this method with. (1)

Another resolution method has been binding or nonbinding arbitration, in which decisions are established by arbitrators after hearing and considering the arguments for both parties; judges or field-experienced attorneys commonly serve as the arbitrators. One of the risks with this is the possibility that the party the decision is against can be assessed the legal expenses of the other party; another is the possibility of dissatisfaction with the rulings.

Widespread criticisms of both mediation and arbitration are that:

• association managers or Boards often have exclusive access to the selection process of mediators and arbitrators, with the implication that condo owners are at a decided disadvantage in pressing their claims;
• the equitable quest for accuracy and solutions based on hard facts, are sacrificed in favor of compromise, which in most cases neither party is satisfied with;
• in the absence of thorough investigative procedures in place before the hearings, careful deliberation of the evidence and sentiments of both sides is impossible; the presiding official is often limited to simply reading aloud the carefully prepared cases of each side; and
• association Boards and management have the unfair advantage of covering any or all of their legal expenses for disputes through use of association funds or direct immediate demands for reimbursement of these costs by condo owners.

For both resolution processes, costs average three hundred dollars per hour, exclusive of fees paid attorneys for their consultation.

Obviously, litigation, the third route for settlement efforts, involving exorbitant legal expenses and possible protracted time requirements, places this option well beyond the financial access of many owners.

A dramatically promising alternative to these flawed options is inspired by and modeled after Nevada’s seven-member governor appointed commission and ombudsman’s office, which has an established record of successfully bringing to justice, including penalizing, violators of Nevada’s condominium laws.(2) The proposed Hawaii bill for the 2017 legislative session would institute our own governor-appointed commission and ombudsman’s office and provide for:

1. A two-tiered structure of dispute resolution beginning with the ombudsman who possesses legal credentials and broad condominium-based experience, and culminate with the powerful enforcement actions of a seven-member commission, if no resolution is reached with the ombudsman.

2. Cost free filing procedures.

3. Thorough investigative procedures by the ombudsman or commissioners before hearings are held, instead of momentary, cursory reviews of evidence at hearings.

4. Swift punitive action by the commission towards determined violators; this would include fines, penalties, removal from current positions of management in associations when warranted, and

5. Suspension of disputed fines, assessments (for non common element dues) and legal charges imposed on owners, until the work of the ombudsman or commission in each case is completed.

If you as a condominium owner are disheartened with current exploitation of condo laws by management and its attorneys, disappointing dispute resolutions methods, and the absence of tough enforcement action against violators of your rights, doesn’t it behoove you to demonstrate to our legislators that they cannot ignore this swelling tide of discontent? You are encouraged to respond in favor of the following petition proposal.

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Petition In Favor of the Establishment of Hawaii’s Office of the Condominium Ombudsman and Seven-Member Commission

As a Hawaii condominium owner, I am in favor of the adoption and passage of the bill to establish Hawaii’s Office of the Condominium Ombudsman and seven-member Commission, as presented in the accompanying article, and allowing for additional subprovisions as developed, to enhance these measures. I believe that this would provide effective grievance, resolution and enforcement procedures for my issues.

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Please follow all of these exact directions to support the petition:

1. Respond only if you are in favor of the petition proposal. Please do not send any “against” responses at all.

2. Send your email support to Marcia Kimura at ombudcommission@gmail.com.

3. Use the subject line only and enter:

a. Your first and last name

b. The name of the condominium you are an owner in.

Sample: John (or Mary) Doe, ABC Towers

4. DO NOT type any comments, or attach any files in the message area. The entries will not be opened, and all of them will be viewed and printed from the “ inbox” list view only. Any entry not conforming to the instructions in 3a and b will be deleted.

5. Click “Send.”

Note: The purpose of the petition is mainly to collect diverse, quantitative results. Your entries will be shared confidentially with legislators only. No attempts will be made to contact you.

Thank you for your consideration and support of this petition.

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FOOTNOTES:

1 Hawaii Condominium Bulletin, “Mediation Case Summaries:”

Vol. 21, No. 2, September 2015, p. 7

Vol. 21, No. 3, December 2015, p. 6

Vol. 21, No. 4, March 2016, p. 6

Vol. 22, No. 1, June 2016, p. 6

Vol. 22, No. 2, September 2016, p. 8

2 Tim Stebbins (2016), “Corruption on H.O.A. Boards Will No Longer Be Tolerated. Anthem Highlands President Removed. Must Personally Pay Hearing Costs and Legal Fees.”  Nevada -- Commission for Common-Interest Communities and Condominium Hotels  Nevada RED -- CICCH COMMISSION INFO

©2016 Marcia Kimura All rights reserved Published with Permission  

2016 HB1802: LINK 

Feb, 2016: Legislation needed to rein in abusive condo associations