 Welcome to Condo Insider for today. I am your host, Portray. And with me, we have Loree McGuire, who is with Porter McGuire-Kiocona from LLP. And so we're gonna be talking today about Hawaii Revised Statute 514B-125 and it's in regards to board meetings. And we're specifically gonna talk about decision-making that is being done via email outside of board meetings because that seems to be a big violation going on right now, it has been. But the statute has been in place since forever. And then it was updated in 2017. So welcome Loree and thank you for being on this segment with me. Thank you. Thank you for having me, it's a pleasure. So 514, number 125, section A or item number A. So it was amended in 2017. So what part was amended and how did it change? Okay, it's actually subsection A and it currently mandates that owners shall be permitted to participate in any deliberation or discussion other than executive sessions pursuant to board participation rules. Now previously, what it stated was that all meetings of the board other than executive session shall be open to all members of the association and members who are not on the board may participate in any deliberation or discussion other than executive sessions unless a majority of a quorum of the board votes otherwise. So prior to the 27 amendment on a per meeting basis the board was allowed to decide the majority of the quorum of the board was allowed to decide whether or not they would permit owners to actually participate in the board discussions and deliberations. So prior to 2017, it was up to the board. Following 2017, it's now mandatory that owners shall be permitted to participate in board discussions. And what they now suggest is that boards construct meeting participation rules and that way they aren't bombarded by all of the owners at one time and owners are allowed to speak typically for two minutes at a time on a per issue basis. Okay, and I also wanted to, because we have projects that are governed under 421J. So how does that affect those people? And board meetings? Okay, well, community associations, homeowner associations are governed by 421J. And under 421J-5, they now have the old rule. So if you look at 514B125A prior to 2017 where it basically was not mandatory and boards could decide or a majority of a quorum of a board could decide on a per meeting basis whether owners could participate, that rule still applies to homeowner associations. So there is no such mandatory rule with homeowner associations, at least not yet. I think in the future, that will likely be amended to mandate participation in homeowners association. Okay, so say for example, the board meeting, they have a board meeting, they finish the board meeting, but there are still some like unfinished topics that they're contemplating, like maybe it's a model repair project. So they still need to find additional information regarding that repair project. And then, so somebody will send out an email and they'll have more discussions about whatever information they discovered. Can they actually do that? And can they actually make a decision to spend, like spend money for that repair project and it's in between board meetings? No, they can't. So, you know, you're talking about this ongoing email communications that's no longer permitted. As you know, and our audience knows previously prior to the 2017 amendment, boards would often have deliberations or discussions via email and they would actually vote on various matters via email and then they would ratify that decision at the next board meeting. You can no longer do that. That being said, it is still happening to this day. I actually had a situation last week where I was talking with one of the board presidents and found out that they had done that very thing and I basically said, no, you know, go back at your next board meeting, you all need to have this discussion again and then vote on it at that time, at that board meeting. So it's a legitimate discussion and decision because if they had made that decision without the owner's participation, it's not a legitimate decision and it could be overturned. That sounds like another can of worms. Yes, potentially. Okay. So what exactly does it mean for condo boards that are subject to either 514B or 421J and also where board meetings are now being conducted via Zoom or another like internet-based platform? Well, for example, if a condo association is going to have a board meeting via Zoom, now what they need to do is when they send out their notice to all of the owners, notifying the owners of the upcoming board meeting, they need to also insert the Zoom link in that notice. So the notice typically will have the notice itself and the agenda and now it needs to include the Zoom link so that all owners have the opportunity to participate. As far as community associations, it's up to the board. It's the board determines on a meeting by meeting basis, whether or not they're gonna allow owners to participate. So my recommendation to homeowner association boards is they know this issue is gonna come up. I recommend that they develop a policy in advance. Don't wait to the meeting because you can't send out a Zoom link with a notice once you've started the meeting. So that board needs to make a decision in advance of the meeting as to how they're gonna handle it, whether they're gonna allow owners to participate or not. And if they are, then I recommend that the Zoom link be inserted in the notice that goes out to all the homeowners prior to the meeting. Okay, so that kind of creates a question for me because usually the links are long string of characters and letters and numbers and would it be reasonable for the board to make sure that that link is available in an electronic format upon request? Well, I would submit that if they have a website, most boards, most associations that do have a website also put their notices up on that website. True. So absolutely, you would wanna put the link on that notice, but even if it is long, that link needs to go in the notice wherever the notice is posted. So if you've got it on a hard copy piece of paper and let's say you post it in the elevators, then that's where it needs to go. The Zoom link needs to go on the hard copy as well as any electronic copy. Okay, so it needs to include the meeting link, also needs to include the agenda items for that that's gonna be discussed on that meeting date. Correct. Okay. So there's been some questions about the rules, the board rules about participation. So what do you suggest that boards should adopt into their rules? Is there like a length of time or an owner's forum? It's gonna be an open orange forum where they can do a Q and A kind of a thing or what do you recommend? If it's a condominium association, then I recommend that they set a time limit for each owner on a per issue basis. So let's say you've got a board meeting and you've got three substantive issues on your agenda, then you should implement rules that for example, would allow each owner to speak for two minutes. And then once every owner has had an opportunity to speak at least once, then you could allow them to speak another two minutes on that particular issue. And then the discussion stops and the board makes a decision. And then they do the same thing on each subsequent issue. So that's one of the ways you can do it. They can also then make a decision on whether or not to have owner's forum at the beginning or at the end. And that applies whether you're using a Zoom link or whether it's an in-person meeting. So that won't change. What about some condos will do like owners, they call it owner's forum. So would you give them also a time limit? And it is like, I'm talking about stuff that's outside of the agenda. So an owner comes to the meeting because there's one that typically normally doesn't but they have some item to discuss or bring to their attention. Would you do the same rules for an owner's forum when they have certain issues that they want to bring to the attention of the board? Well, technically the owner's forum is not a part of the meeting. Okay. So I don't think so. I don't think you would have rules as to the owner's forum because that's not a part of the meeting. It's just the forum for the owners to have their discussion. And technically, the board isn't even involved in it unless they're doing it on an owner's basis. You know, in other words, they're not operating as a board during the owner's forum. Because outside the meeting, that's why you typically have the owner's forum either at the beginning prior to the meeting or you have it at the end after the meeting. Okay. And that's a good point. So some people have always had it during a board meeting kind of like a Q&A session, I guess, after they've done the main part of their meeting. I've heard some people do that, allow that to happen during a board meeting. Well, I guess you could temporarily adjourn your meeting, go into owner's forum and then come back and resume into your meeting. But technically that owner's forum is not a part of the meeting. Okay. Okay. And then so getting back to the board meeting notices and I kind of want to deviate from it a little bit, the meeting minutes, because there seems to be a confusion on the minutes on how when they do the decision making and people, the board members will vote. So how do they record, do they need to record who voted yes and no? Yes, exactly. They're to record exactly how each member voted. And if that particular board member abstains, they need to record that as well. But yes, that goes in the meeting minutes as to every decision made by that. I heard a comment from somebody because a board member abstained and they were kind of like shot down, kind of like told like, how dare you abstain? I mean, what is the reasoning behind abstaining? Well, it depends on every board member. A lot of times board members just don't want to take part in a particular vote. So they'll abstain, period. So they just say, I take no position kind of thing. Yeah, and that's their right to do. Right, okay. I mean, that's why I thought it. I mean, no, I go, well, if you take no position, yes or no? Well, you know, certain boards, and I understand that they're passionate about whatever the issue is. So they want everybody to take a position. But, you know, it's often because of that passion that certain board members don't want to take a position because they want to steer clear of the phrase, so to speak. Okay. So to kind of recap a little bit on the emails between board meetings. So it means that all communication regarding board meeting matters can only be done during a regularly scheduled board meeting, whether it be in-person or via Zoom or WebEx or whatever platform that they're going to use, especially right now during the pandemic. So owners have the opportunity to participate in the deliberation or the discussion, but other than executive sessions, correct? Correct. You know, there is one exception and that exception has to do with ministerial questions. So for example, the board is trying to decide on when they're going to have the meeting, what time on a particular date and maybe the location of the meeting. That could happen via email, but other than that, any substantive issues must be discussed in an actual board meeting, not via email communication. And that would apply to even personnel issues, right? Well, personnel issues are typically discussed in executive session, right? So yeah, absolutely. Even though owners aren't permitted to participate in executive session, an email is not executive session. Yeah, it's kind of scary to send things via email because that becomes record and like with that case on Maui, that homeowners. So I kind of get a little shy when I send out emails, you know? It's not only that, but certain board members have spouses and they share emails. So a lot of times if you send an email to a board member, that board member's spouse could be reading it. So if you're talking about something that's an executive session and you send out an email, there's no guarantee that only that board member is gonna see that email. So you as a board have a duty of confidentiality in executive session. You're not supposed to be sharing that information with your spouse or anyone else. It's limited to the board members in executive session. Okay. So how do you, you know, because this is still going on and it's been an existence for how long? It was updated in 2017, but it was still in 514B prior to that. So how do we get this word out because it's still being violated today? Some people don't even know about it. Well, you know, I mean, it's really up to board members to spread the word. It's up to owners to spread the word and it's up to property managers to actually enforce it. You know, I mean, unfortunately, it does create more work for property managers because they're the ones that have to post the notices. So if every single decision is being made via a board meeting, you're gonna have more board meetings than you otherwise would, at least potentially, you know, certain boards don't, but you shouldn't be discussing it any decisions that the board's supposed to make in email. So if that means you have to have two board meetings a month or three board meetings a month, then that's what you need to do, unfortunately. You know, notice is 72 hours prior to the meeting or simultaneous with notice to the board, right? So let's say the board has a pressing issue, they need to discuss it. According to 125, you know, the notice can go out as soon as the board is made aware of the need to have a meeting. So once that information goes to the board, they need to get it to the property manager so the property manager can post it simultaneous with notice to the board. They don't need to wait and give out 72 hours notice if it's a pressing situation and they need an answer. What about when it comes to like an emergency type of, like an emergency repair or like maybe they're under, they're doing a repair project and there was an issue that created something that needs to have board discussion. You get out and notice simultaneous with notice to the board. So for example, let's say there isn't an issue, they're in the middle of a spa repair and something has happened, the contractor needs an answer right now. You get on the phone, the board president gets on the phone with the property manager and you send out a notice to all the board members and a notice to all the homeowners that three hours from now, we are going to have a board meeting. So that's legitimate so long as it's simultaneous notice to the board members and the owners. And that's a legitimate board meeting even though there's been only three hours notice. Okay. And I think we're kind of close to hitting our time but do you have any examples of some, I don't wanna say for our stories but where some of this has created havoc and it's come to your office's attention that created a problem? Well, for example, owners are finding out now about this rule and they're, you know, mandating or not mandating, demanding that it be enforced. So for example, if they go to a board meeting now and a board is seeking to ratify a decision, then they're gonna speak up and say, hey, what are you ratifying and why are you still ratifying any decisions? You know, why wasn't this discussion had in front of all of us and you're really exposing yourself to a lawsuit by doing it. And, you know, people don't realize it. And, you know, honestly, people hate change. It's hard for people to change. And especially when the change involves something that is used to be convenient and is no longer convenient, right? Email is very convenient but you can't do it anymore. So people are gonna be slow to change from property managers as well because it's a lot more work for them. Now they're the ones that have to get out all the notices for every decision that the board has to make in a board meeting. So it's more work. Well, I'm sorry. The reason for that is because the legislature is very concerned about transparency because every legislative session, they hear from owners who are complaining about the lack of transparency in board meetings. So the legislature, they were done with it and that's why they implemented that rule in 2017 because now they want all discussions to be in the open so everybody, all owners, whether you're on the board or not, can participate in the discussion. Okay, because I noticed now a lot of property managers, they are trying to really collect email addresses for every single owner so that they can actually email especially for the non-owner-occupant owners. They're really trying to keep them on board as far as communication regarding the condo. So I'm hoping that will kind of help with sending out notices. It'll go out via email versus mail. So at least these non-owner-occupant owners can say, well, we never go into it as well. It was sent via email. So hoping that's gonna help that communication. Well, I know myself in my experience, you're now having many more owners participate in board meetings because of the convenience of Zoom. They don't have to go to a meeting. They can, you know, they're in their own home at their own computer and now they've got a voice in their governance. So you're gonna see more and more people participating, I believe, in more and more meetings because of Zoom. Yeah, I think the pandemic created another thing that's gonna probably continue on into the future and it's gonna be our normal way, is doing more Zoom or Webex. But yeah, I kind of really think that created a good thing. Also the pandemic is bad, but it created a good thing for condos. Right, agreed. Yeah. So is there anything that you wanna add? Give me a second. Let me look at my notes here. Let's see. Oh, I did want to make one point and that is if you look at subsection D, you know, I do believe subsection D, 125 subsection D, there is a bit of a conflict between subsection D and subsection A because subsection A says all owners shall be able to participate in any deliberation or discussion. Period, right? Subsection D states that if permitted by the board, any unit owner may participate in a meeting conducted by a means of communication through which all participants may simultaneously hear each other during the meeting. Well, that conflicts with subsection A because that gives the board the decision on whether or not there's that participation. So in my opinion, there is a current conflict between subsection A and subsection D, but subsection A was recently amended and so subsection A will trump subsection D. And I think at some point, we will have to go to the legislature to amend subsection D to get rid of that language or certainly amended. Isn't that some of the changes that's happening right now at the legislature because of the pandemic and they're making like Zoom meetings more possible? Well, they are, definitely. But you can do Zoom meetings on board meetings. They're talking about for annual meetings. Okay, okay, okay. Distinction. Okay, so did you have any other things that you wanna add, that you wanna, words of advice to our homeowners and condo board members? My main thing is, stop emailing each other to talk about any current issues, period. Wait for the meeting. If you need to have two meetings a month, then do it. You need to have one meeting a week, then do it. If you've got that many decisions that need to be made that you need to discuss, then do it because I think that what will happen in the future is any boards that have made decisions via email and subsequently ratified them may be subsequently challenged by owners and they may be set aside. And in doing so, you can create all kinds of habits because if you've gotta go back and set aside decisions that have been made on certain, let's say projects, maybe that project isn't valid now. You just don't know. And so follow the law. The law is there for a reason. And that would extend to even the employees of the association as well too, right? Like if they're talking about an upcoming repair project that they're working on the specs or whatever, it hasn't started yet, but the employee, the resident manager or general manager, whatever, what if he sends an email communication to the board and saying, hey, this, this and this, would he have to really hold off until actually a board meeting to have that conversation? Well, he could send it to the board, but the board from that point should not be communicating about it other than maybe the board president telling the property manager, please put this on the agenda for the next board meeting. Okay. So he could communicate a status. Like the board meeting is what I discovered and we can further discuss it at the next board meeting. Yes. Yeah. And it's wise, I would say, for the resident manager to keep the board updated, they just should not have an ongoing conversation about whatever that was. And if they find that they need to, and it can't wait, then they need to set a board meeting ASAP. Okay. All right, cool. This was really good. I'm really, thank you, Loree. And what we're gonna do is we're gonna, once we get the links to this, we're gonna email blast it out to all the email addresses that we have. So that we can really, really infiltrate and correct this item that a lot of people are not aware of. And so they are violating the statute. And hopefully we can spread the word out quickly and fast. Well, thank you, Loree. Thanks for having me today. Yeah, thank you so much, Loree. And thank you everybody for joining us today. And we look forward to seeing you again next week Thursday, three o'clock. Thank you. All right, thank you.