 Good afternoon, everybody. My rating, 10-0, I am one of the hosts with Condo Insider. And we also have, I'm going to introduce today, one of our new hosts that's going to be also on our, we're going to be rotating on a cycle for Condo Insider is Nalong, she's an attorney. And she's an attorney with Pastor Kapchak and for about the last one. But anyways, she's going to be also on our host. But today, because it's annual meetings, meeting season time, and we have probably some maybe new board members that are to be coming up, we wanted to do a show about being a board member. So I'm currently a board member on my Condo board. So Nala is going to ask me a series of questions and we're going to kind of get people a little bit familiarize themselves with what it takes to be a Condo board member. Aloha, everybody. My name is Nalong. I'm a practicing attorney with a law firm, Damon Ke-Dion Kapchak-Hastard. Such a pleasure to join this show, not only as a guest now, but also going to be one of the co-hosts. So today's topic, we're going to talk about for new directors. This is annual meeting seasons for condominium and community associations. First, Rili and I want to congratulate the new directors who got elected to the board. Your fellow homeowners did place a lot of trust in you. You will be having the duties and obligations to basically help all other homeowners to guard all your investment in this project. That's a lot of work. And for somebody new, you may feel at a loss first. So hope today's session will give you some useful information. So Rili, you've been sitting on your board association for a long time. For any new directors, I know usually right after the election, there's going to be an organizational meeting among the board directors. At this time, officers will be usually decided among directors. So typically, condominium board, there's going to be president, vice president, treasure, secretary, and also directors. Can you tell our audience what those positions are and what are the typical duties for each of them to be expected to serve in those functions? Typically, your condo should be operated just like a business. So you're going to have a president who is a CEO. Then you have the vice president and you have a treasurer at a secretary and then you have your directors. In some boards, the treasurer and secretary might be the same person or they might have them as individuals. And they have specific functions that's spelled out in your condominium documents. So one of the first things you should always read and it should have been available to you and you should have already read it when you purchased is your condominium documents, your decorations and bylaws because they spill out certain requirements and the duties of each of those along with the duties and responsibilities of the condo board. So everything is, and also we have to comply with 514B and all those regulations. And that also has additional requirements for board duties and responsibilities like fiduciary duty, making sure you're not doing a conflict of interest and some other things and especially how we have to do our reserves and do our budgeting assessments of maintenance fees and how we calculate that. So you don't have to be like a CPA to kind of do this but you have to know the mechanics of it and you always wanna consult an expert when you're not sure of how it works. And plus to go to trainings, there's always trainings available. Yes, thank you so much. That's a lot of information but don't feel daunting new directors because this is not a one person job. Remember, you're actually gonna be working along with your fellow directors with assistance from your managing agent. If you have a bigger project, probably there's also gonna be side managers in addition to property managers. And again, you have professionals in the industry that also help you. Those important persons include association attorneys, your insurance agent, sometimes consultant, a certain bigger project like elevator modernization or there's also, you can form committees for board directors, you have certain committees, volunteer homeowners, help the board carry out some of the functions. But I do wanna emphasize, although you can delegate some of the authorities as a board to these committees or these professionals sometimes to certain extent, but as a director and officer, you always have to remember, you cannot delegate your duties, obligations. Ultimately, if these people who you delegated authority to, they somehow bridge the fiduciary duties, they didn't do what they're supposed to do, you may be ultimately held responsible for those violations. So, I mean, as new directors, it always help to know what is the minimum standard you have to meet or what you're self-getting to trouble. You know, we've read news about those horrible situations where directors engage in serious violations that even help personally liable. Nobody wants to be in that role because you are a volunteer homeowner trying to do the good for your community. Sometimes it is a lot of work, it's very important job, but most of the time it's thankless, right? So, really, so based on your prior experience, are there any good tips for new directors who are in that role? You know, like for example, for meetings, if they go to a board meeting, how does the association conducts its official business and what should a director do to prepare or to attend those meetings? Well, typically the property manager, they'll publish the note and they'll make sure everybody can attend, so they'll set the date that's amicable with everybody. And then there's what we call a board packet. And truly, now it's been emailed versus being mailed, so it could be up to the association to decide if it's okay email or some people don't really are not, they don't have printers at home. So they might say, okay, certain people, you need to send it by mail, but it would include the meeting minutes of the previous meeting, the meeting agenda, and then your financials, and then what other paperwork, like one of the things on agenda might be to review a contract. So it would have that contract in there, but it's also incumbent on us, at least the night before don't bring the packet to the meeting and you're opening it up. You should open it up prior to, and at least look through it, look through the financials. It does take a little while to kind of read the financials if you're not used to it, but you're allowed to ask questions regarding anything, but especially if it has contracts in there, try to review them before the meeting, get some post-its and put little notes that you want to ask or you're not sure of that you need clarification on and you would start off that way. And the board as a whole needs to be a little kind in responding to some of these questions for especially new board members. It could be something that they've been working on on a project in the past and now they're reviewing contracts and so this new board member might have questions. So just ask them, answer the question nicely and so that this person can get caught up to speed as to what's going on. That always is something you try to make yourself your board to be as cohesive as possible, but also as a board member, if you don't agree with something or something doesn't sit right with you or something doesn't sound right that you're not sure of, I mean, it's okay to say no and to voice your opinion. I think it's more of a wrong thing to do is just to follow the crowd, okay? But you can voice your opinion, that's allowed. So don't think you're gonna get yelled at because you say no. Yeah, you're supposed to make your independent business judgment as a director in your role, that's very true. I mean, yeah, so I guess for starters you need to attend those board meetings because it needs official quorum, right? In order for the association to do any official business if a lot of the directors just do not show up at the meetings that's gonna be a huge problem for association operation. And some of the associations that I know they also adopt board meeting rules like confidentiality rules and those written policies sometimes could be really helpful to new directors because typically in these kind of director agreements they will spell out those duties like fiduciary duties, what do those mean? For new directors and also remind the directors on certain matters that's to be discussed at the board meeting you have to keep it confidential. Either to preserve association's attorney kind privilege or some sensitive personnel or fair debt collection mandated confidential information. So those written policies are super helpful. I highly recommend for any associations with a lot of new directors consider adopting one if there's no one in place yet. So that could be a really helpful tool to give information to new directors. Talking about resources, besides of watching our program are there any other, you know, accessible or useful information and resources available for any director who's willing to commit the time to educate themselves to be a more, you know, capable, competent director? Well, in the 514B you have this 107F that allows for associations to send their board members to educational seminars or trainings and the registration fee is gonna be at the expense of the association. So both CAI and HCCA Hawaii Council we both do education seminars and we really cater them around for board members on teaching them certain, we do various topics and it's very worth it to attend these. It's always got good topics. You don't have to attend every one of them but we know if there's a topic that comes up, you know, it's worth it to attend to learn about it. Also both of us do board training, you know? And that's kind of, this year for Hawaii Council we're gonna split it into two Saturdays because it is a lot of information in one day. So we decided this year to split it up into two Saturdays. And I think CAI also, there's this called board leadership and they also split theirs up into two Saturdays I believe but it's well worth to go through and attend. There's people that attend every year and they always, I hear comments, they said, we attended last year but I learned more than I did. I learned things that I don't remember from last year, you know? So it's always a good refresher and I've always been taught that if you go to a training and at least if you come out the door remembering one thing it was worth the effort, you know? So training is always very important and remember it's paid for at the expense of the association as long as you are a board member. Yeah, and also I think the DCCA website, you know they do have some free resources like one page or two page flyers explaining to you what is the business judgment rule that protect directors and what are the board's fiduciary duties and they will also have sort of like handbooks for directors, you know, all the condo terms and what you're supposed to know when you start serving on this, you know? Those are some reading materials but in case you need a reference to go to you can always go to the website to pull the information and for no directors, CAI referred by relaying is that's called Community Associations and Students and National Organization but there's also Hawaii chapter. They organize educational events and we also have a legislative action committee, you know lobbying for community and condominium associations and real legislative sessions for any bills pertaining to condominium community projects. Also your condo attorneys and your insurance agent. I mean, I know Susabhia has attended board beings that kind of give them a little bit of training, you know and even your attorneys, they might be, if you invite them in they can attend a meeting and you guys can sit there and ask them questions, you know and he can also reiterate what you're supposed to be doing or whatever the issue is, you know? So they're always willing to be of assistance to any board because the bottom line is to prevent any kind of lawsuits or, you know disruptions that could just disrupt everything the board operations. Great, I guess, you know I avoid to believe because we were all being there liking any, you know, kind of email project when there are a lot of neighbors, you know there could be situations where conflicts arise maybe, you know, this ground or the unit owners would approach, you know you as a director and either make complaints or vent out, you maybe also dealing with all these different personalities sometimes you feel frustrated how come, you know, I'm trying my best to do my job but, you know, I'm putting in this position dealing with all these emotions sort of like emotional drain for myself for any new directors if they are kind of had that kind of feeling what is your suggestion as an old director who has been, you know going through that with a lot of experience? I kind of take, you know, like I'll take a weekend and just put try to put it out of your mind because eventually in a couple of days something will to me something will come to your mind that can help you put at ease that you might be able to see it from a different perspective that you weren't even looking at so you can't be just fired up because you didn't like it you need to take a step back and just go about your day like for me sometimes it's cleaning house or going in the yard and then sometimes well, you know as I'm not really thinking about it but something might pop up into my head I'm like, oh, think about that maybe it's that, you know so that's what I do I don't let it create a fire in my belly, you know or sometimes I'll take pen to paper and write down plus and minuses, you know and then look at it because, you know, again every decision just because it didn't go your way doesn't mean that it's a bad decision, you know so you have to really look at the other side of the fence as well and what, you know what are they trying to do? Is it creating this, you know you have to really look you really have to analyze it on a non-emotional level, I want to say Yeah, so I think that's the hard part is you be professional like treat this as a business, you know like put your individual interests emotions aside, emotions aside I think as long as you are abide by the project documents, you know always follow the goal that will be transparent be consistent, be fair you know, I think communication is always the key it always helps and then as over time, you know with your experience scanning I think you will feel more comfortable in that role and again, your fellow directors your property managers your kind of minimum association attorneys or insurance agents all those professionals are there to help you you are entitled to rely on them when you need information to function in your job One other person we didn't mention is we need to follow Robert True's supporters So on the Hawaii Parliamentarian website there is I think a standard list of rules very user friendly, easy to read so that's always another resource is the Hawaii Registered Parliamentarian Association but they have a list of Robert, a simple list of Robert who is all of order to follow for board members Yeah So we also need to as a board member you also, when you're in a board meeting it's open to every owner unless you're discussing any kind of legal matters employee matters then that would be done in what they call executive session okay and board members need to realize don't try to use it as a second session as a means to make decisions that you don't want everybody to hear because you know they're gonna bark at it you know it's about transparency with a few limitations regarding confidential matters which would be employees and maybe contracts might be another one but owners themselves do have knowledge like some of them could be painters or even roofers so they could do some input on like the quality of the material like just painting alone you know when some people are picking colors of paint there's certain paints that fade faster than other colors you know so a painter could be helpful like you know you may not wanna do that blue because in two years it'll look like this you know and let that door open for those kind of suggestions I remember at a board meeting and it was about a painting and they had talked about this one color and one owner said I painted my house in that kind of a tone and in two years it looked totally different than where we're going to just do a patch they couldn't even do the patch because now the paint looks bad you know so sometimes we always recommend like select the wall and just put different colors let it stay there for X amount of time and see how it changes over time especially if you're facing the west side sun because that could really fade your color really fast you know so you know so sometimes these people that have other professions can put that insight into a board meeting that is a plus you know so don't close yourself off to having owner participation you're not allowed to anyways to hold off to owner participation they're allowed to be there but now what do you think about Zoom because you know we've been doing Zoom doing it remotely for so long but there's some people now that they want to come out of their shell they want to go in person but yet the condos are not doing it anymore I mean they're still doing it because you know and especially for some seniors they're feeling closed off Yeah I think that's where really every project needs to depend on your situation if like let's say if you have directors who are not on this island who are like remote like on other islands or on the mainland you know you might still want to even if you are going back to in person you might still want to keep this Zoom option open for those directors right you know and also for owner participation because the statue you know give the owners the right to participate and as you just mentioned owner participation can be valuable for your project you keep that option open you're going to enhance owner participation enhance transparency and that will also prevent disputes because you know the trust is built that way when there's open communication there's more transparency but I totally understand you know if everything is conducted with Zoom sometimes you do not have that team rapport when you know for any business right any team in person communication is always different and superior compared with Zoom and everybody's been doing so much over the past three years and it's like it's a time to if there is more opportunities to discuss in person there's always that's different vibe everybody's embracing for that as well yeah because I think some people even business wise I think some people are moving it more to what they call hybrid so it could be in person plus via Zoom so that would cover that end but it still is still needs a door open so now so if you say okay we're not doing Zoom or we're only going to do in person you know you're restricting you know in today's world we have to be a little bit flexible I want to say to owner participation as long as it's reasonable you know and it can be done yeah not like we're gonna fly people over I'll walk with you have a meeting yeah but one thing for sure is you cannot just conduct association business via emails right that's wrong right right no no yeah that's 125A you can't be having your discussions or board decisions via email and then ratifying it it's gotta be done in a board meeting because 125 the whole point of it is it prevents owner participation right 125A so try not to do that and then plus two the gossip that goes around when you make a decision via email they're hiding something you know and you don't want to do that it's open transparency you know so you really don't want to make your decisions via email at all it's not allowed number one and it just prevents the gossip that and adding more drama then it's really necessary to the board it just hampers the efforts of the board yeah I think there's one important matter we haven't touched that's really the conflict of the interests right yeah that goes into part of the duties and cares of duties as to fiduciary duties so what is your experience on conflict interest and what should a board director correctly handle that I stay away from it with a knife like I told someone I said like I know contractors I would never recommend a contractor to do work on my property even though I and I and I tell them I go no I go because I if something happens and maybe you did a great job but somebody else says you didn't or something like that I go I don't want the finger pointed me in and you know I'm the one that recommended you so I stay out of it you know I just don't recommend people I really let it go out to bid the way it's supposed to and be totally independent you know to me that's that's the proper way I'm and you know and don't get your family members involved to me that's the big no no you know because of the project goes the other way and there's a lot of deficiencies or not being done right now you've got additional drama in your life besides the board now you've got family drama you know I'm and and nobody needs that in their lives today you know so really stay out of that conflict of interest and be and if it does if that's the only resort that this is the only person that you know that can do this job because there are some repairs that might be very that only certain people can do that they have all the insurances in place the bonding in place things of that nature you have to give full disclosure and you can't decide or make the decision or vote on that particular item you know but a vast proper disclosure and then you know recuse yourself on voting whenever that's needed that will protect you a long way right so we only have a few minutes left I think there are some special situations where boards should be aware because those are the you know I want to see hot areas where people get into trouble got sued you know recalculate or you could really get into trouble the statute will see you breach your fiduciary duty if you violate those what is our documents request from unit owners the other is mediation arbitration requests or demand from unit owners what are your experience on that and what is your recommendation from your directors um usually those requests for documents would go into the managing agent um they might not necessarily go directly to the condo board but the managing agents takes that responsibility and they have the they have the duty to comply with those requests um and um just accommodate it and hopefully the condo docs requests have gotten a little bit lesser because now they're posted either on the website or they're on town square or similar platform um but if you do not comply especially with filling out after 30 you have to respond within 30 days and if you don't or if you can't provide then there's another form that the the managing agent needs to complete as to why it can't be comply with you know um don't ignore those requests for documents because now you've created another issue um now you can have RICO on on your on your backs to get those documents and um I've been told by RICO that whenever they get involved for request for documents they always get them and I'm like why couldn't they give it to them the first time around you know um you know and also like you know how some documents would be at a charge of a dollar per page and that's dollar per dollar per side like one person said they were having a hard time getting a copy of the House Rules that the weren't wanted to charge them for a copy of the House Rules and I said why would you charge them when you want them to comply give it for free you know don't make it so hard be reasonable people you know simple documents like the House Rules I would I I would freely give it out because I want them to comply with House Rules you know so what other things do you think would be um some additional uh like assisted animal right they're not pets I mean that's one of the yeah it got a lot of increase for my clients all the time and also you know of course mediation arbitration if certain unit owner requests there's statutory obligation association needs to go in when in doubt consult with your association council that's whole purpose the business judgment rules in place where as a director you don't have to do this job alone you can rely on you know these professionals to help you make the right decision for your project and we're running out of time such a great pleasure to have this discussion and we want to congratulate and thank all the directors who are willing to devote their time to serve their project it's a noble job you're doing and I think with all the help you're able to do it thank you thank you have a good week have a good weekend thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram and linked in and donate to us at thinktech hawaii.com mahalo