 Oh, and welcome to condo insider Hawaii's weekly show about living in an association, mostly condominiums but you've been doing this show about three or four years now and produce a couple of hundred episodes that are available through think tech Hawaii on YouTube from all sorts of issues on managing an association and it's designed primarily for board members and homeowners, and it's been very very successful and very popular as a part of our industry educational effort to teach people about what it's like to be an association and how the world is changing. I do want to start before I introduce our guests. I'm telling everybody that our big ruling came out from FHA this week, where they've advised all the lenders, the spany may Freddie Mac mortgages that they're changing their qualification rules. If you want to qualify for one of those mortgages as all centered around the champagne towers south collapse and surfside Florida. There are restrictions and requirements on reserve studies and disclosures and the status of a condominium that could have a dire effect on getting a mortgage for some people, if the association is not well maintained. I'll cover this and another show in the future but know that the collapse of champagne tower south, not only called surfside is having a ripple effect in the mortgage industry already. Today's show. It's my honor and privilege to have one of our state representatives in the house, Matt LaPresti here with us today. He and I were talking earlier about condominiums and, and he's been very interested in that topic for many years about where the world is going and why it's going that way what we need to make it better for everybody. So first of all, let me introduce Matt welcome to the show. Thank you Richard I'm really happy to be here thanks for having me. Yeah. One thing I always like our guests to do is become kind of introduced themselves to people who are watching so because we see legislators and it's always about the legislative effort. Tell us about you your family along you've been in Hawaii and I know you have a PhD I think so that's a self as a, as a congratulations that's a hard accomplishment. Yeah, I do have a PhD in philosophy, my, my vocation is as a professor I teach philosophy and ethics and some world religions humanities political science at Hawaii Pacific University. I did my PhD here at UH and Manoa and I finished in 2008 I came out here to go to grad school from Ohio and I moved out here in 1999. So I've lived in Hawaii now for about 22 years and married a local girl, and we had kids that are in public school and get two little kids junior high and then an elementary school. Yeah, yeah, I mean, I got into politics because I started paying attention to what was going on around me when we were when we bought our first home. As a homeowner I got on our board and our association which I serve as a president now, and I started to become much more familiar with opportunities for improvement and our society. And I thought I was able to help with that. So I put my hat in the ring to help with that. You know, be having a PhD, you know, ironically, by the way, I've, I've been a guest lecturer for over 10 years of Hawaii Pacific University in their master's program and business, a primary lecture on a course called policy formation for managers, which basically says the policies you've set may have a greater effect on your success than you think, you know, how many hard policies, but it's got to be a challenge to run for office when you've never done it before. What were the obstacles you found. Man, it was really hard. It was the hardest thing I ever did in my life actually was winning. I ran in 2012 and I lost. And I ran, frankly, after meeting my legislator, I was very unimpressed. I thought, I'm going to help somebody beat you and nobody would run against her. So I did. And I get my, I lost in a big way by 40 points. So as an academic, I took a class. And I thought anything worth doing once is worth doing twice if you really care about it. They call it political science for a reason. There's a real science to this. And I learned about marketing fundraising communications, how to talk to voters about what they care about, and how to listen to voters to understand what they need. So I did all that and then I walked the district, I think three and a half times and I had a 40 point swing and I won in 2014. So this is my third term in office now. I was out for a couple of years last time when I ran for the Senate, but decided to come back to the house. And one of the big problems I see in our democracy is that the skills needed to win an election often have nothing to do with doing the job well. And that's frustrating to see, because you get some people in who are really good at running campaigns and really good at getting you to like them and vote for them, but then they get in and it's like the dog who caught the car and policies a whole another world. So first of all, thank you for serving in our legislature I've said many times. This is a thankless position, and the problem with legislators in general is you get elected. And you may have skills in certain areas, but the legislature is so broad and all of the type of bills and issues that come forward. You have to in a short amount of time become an expert on the issues and the two sides and maybe three or four sides that have different points of view on that So let me thank you for agreeing to do. I don't think it's a, you know, I would tell you this true story quickly that a good friend of mine was marked to Kai if you knew Mark. Yeah, Mark, Congressman and passed away was very good friend of me, and he and another representative of the state legislature went to dinner with me and asked me if I'd ever consider running for office. And I get my words to them my exact words were, didn't I tell you I was running, and they looked with big eyes at me I said I'm running as far away from that, as you can ever get, because that make a lousy politician, you know, so it takes a special person like you to be able to do it. And we appreciate it even though I'm sure there's times you and I won't agree or others won't agree but if we're all fighting for a better Hawaii so be it, you know, that's how it goes. There's nothing on a condo board. Politics is politics, you know, it's just a different level. The good thing about the condo board is, because we're all neighbors, or at least most everybody is neighbors sometimes that you have landowners who are on the board and don't live in the area but there's much more friendliness and courteousness and everybody has shared interest that if you make a bad decision to defect your home. And that's something that is more intimate than than regular politics I'd say, but nevertheless there's there's elements of political shenanigans sometimes that's, you know, you're never going to avoid any kind of power structure. I think with condo is a business in a way, you're going to have different people. I'm convinced a lot of people buying condos and don't know they have to follow rules. Yeah, you know, they just, they don't have to follow the rules because this is America, we don't have to follow the rules. You know, so I've seen everything I've been in this business since 1992. And I think I've seen about everything I spent a lot of time now as an expert witness and teaching on condo matters but it too is a thankless job in a way. Oh yeah. It's more thankless than the legislature at least in the legislature we get a paycheck. It's interesting to say you see him as a business I see him as small governments. So some of the areas in Hawaii, like Mililani for example and have a beach where I represent. Much of the homes are HOAs and an HOA not just condo but a larger home and our association, and they have the power of small governments so like have a beach has the size what 70,000 people. And that's the size of a large town on the mainland where you would have a mayor and a police force and all these sorts of things but we don't have that we have kind of wars. And they tell you what to do with your yard and how to do it and what's got to be done when and there's basic rules and regulations for maintaining cleanliness and, and a nice place to live. So I see them and really a small government taxation, right, I mean they have fees. Yeah, they are kind of a, they don't have all power because they have to follow federal and state laws and things like that but they certainly have the ability and I teach a class on parliamentary procedure and I say the biggest mistake condo boards make is that your documents to find what your authority is. And so they make decisions that are outside their authority and that's where most of the right call the litigation and the problems began that they, they think they can do more than then what's empowered within their governing documents that they. So but that's just a personal feeling I'm sharing with you. So anyway, talking about the state real quick before we take a break in a few minutes and talk about the condo side. What do you see the major challenges for Hawaii this year. Right with legislation. The state of the whole, just in general, oh well obviously over in the economy and reopening. I think they just announced that they're still going to require the three foot rule, which I don't know that I mean I've got my vaccines and my booster and everything and I support all that but this is that seem to be opening safely faster. And I think we need to be moving in that direction to. They just started letting bars and restaurants I think stay open later, but they're still at a limited capacity. And it's not easy running a restaurant it's not easy running a bar and it's it's a lot of people's livelihoods at stake. And I think the sooner we can open that up the better because the vaccination numbers are really getting up there. And that's encouraging. So I agree with you 100% we've got to get open and there's, there's risks and living and I don't think it's that great detail. We've got to get open, because people are dying because they can't make a living, you know, and that's going to be open but the thing that has bothered me a little bit for what I've heard the legislature later various people. Not you is that, you know, since I've lived here in 1974. You know, the cornerstone of tourism is the cornerstone to our economy, followed by the military. And we now have all this push we want to limit tourism, but then you want to expand the economy to pay for more entitlements and programs you know, how do you see tourism in this, where were you on that subject you know, yeah, there's been a, it's been a long going. I don't know if we'd even call it a debate but for decades people have been talking about limiting tourism as it's grown and grown and grown. But what does make sense to me is identifying some degree of carrying capacity, and how much we can reasonably expect to accommodate, and at what cost, right because there's an environmental cost there's an infrastructure cost. One of the ways that that people have talked about doing this is by trying to attract higher paying tourists. So that way, if you get more bang for your buck from the tourist industry with less impact on the environment on traffic on infrastructure, then that might be an ideal thing to do. I think that's the right way to go but at the same time I don't want to see why become a classist resort state, just for the, the uber wealthy. You know, it's a family brand that they have here, and I think they need to maintain that not just for the rich. But that's a really complicated, it's a really complicated question, especially when you start to think about sea level rise, like a key was a swamp. And it'll be a swamp again with sea level rise so what's going to happen to those hotels. They're building so many new sky rises and kakaako that places flooded during King Tides already. And so some of the most. Some of the fastest development area is going to be underwater 30 years, and it doesn't make a lot of sense to me and I don't understand how we're planning. It seems like we're not planning at all for development for affordable housing for the tourism industry for the future. People are just scrambling right now to try to deal with with the fires that we already have to put out. So it's, it's keeps me up at night sometimes worrying about these things again as a bill to see wall are they going to move all the hotels out to the west side of the island. I mean, how's that going to work. I think you're right on. Yeah, I think you're right on. I don't see any plan. I mean I've heard. I've heard that for 46 years. We have to face the fact that we're an island that attracts people because of our beauty and not just the beauty of the surf and the mountains but we have a cultural beauty here it's beyond anything I've ever experienced I love the culture here. A county issue but you, you have any short fast take on big on the vacation rental short term vacation rental feelings. Well yeah I think that's been a real problem and I'm certain I'm certainly in favor of limiting and regulating them. The county Honolulu County has done a really poor job of regulating that industry, whereas other counties I think have done a better job. One of the things that we did last year was in the legislature was we passed a new tax structure that enables the counties to use to raise their own TAT. And really what that's going to help do I imagine is help incentivize the counties to go after these legal vacation rifles. And that's a good thing, because a they're skipping on their taxes and be we need to make sure that homes here are for people who live here. It's one of the, it's one of the driving costs not the only. There's lots of driving costs so pressures of rising the cost of housing but that is that is one of them as a legal vacation. Yeah, I support you know that vacation rental should be regulated and should be legal. I don't think they should be everywhere in every community but yeah I still think there is a market for a certain level of vacation rentals, and I would tell you I happen to have a own a wiki key that I use for over 30 day rentals. And of course they're talking about 180 day rentals is a new in this new bill before the county city council. And so I looked at my tenants and tenant number one was a family who's opening a business in Hawaii they're building a restaurant, and while they look for a home they wanted to rent my place for three or four months. And then my next tenant was to. They called themselves handyman, but they were nuclear engineers working on a submarine and Pearl Harbor, maintaining the submarine but they weren't military they were Department of Defense right so they were here for like 75 days. The third one was a doctor but the doctor wasn't at a hospital. They had a contract with the University of Hawaii, as far as the sports medicine program. And then I had a speech therapist was helping the varsity school with young children, and they were all here typically 60 to 120 days all less so 180. And the city council bill would would put that out of business unless they clean up the language you know, but there's a market for those kinds of transit rentals that is necessary to have a vibrant Hawaii economy and buy treatment so. Yeah, it sounds like it. No, I'm not familiar with the bill before the council right now but that's. Yeah, yeah, we got an awesome track, but we want to get to know you going to take a lot of things, but in that note we're going to take a one minute break, and we'll be back with Matt LaPresti, and a second to talk about condos specifically. So we'll be right back in one minute. My name is Mark Schlau, I am the host of think tech Hawaii's law across the sea program. My program comes on every other Monday one o'clock. And we talk about a lot of different subjects. All of them law related in some way either life or practice, and I try to have a diversity of guests that can talk about different topics of interest. So please join us. My law across the sea program every other Monday, one o'clock in the afternoon. Aloha Richard Emory back again with representative Matt LaPresti talking about our state, our economy, and about condo living Matt's a board president of his condo and I asked you a couple questions about some of your objectives this year. What's your take about the condo industry in general and being on a board and the industry and there's a lot of, you know, to me a lot of language out there, certain around it may not be totally accurate, not from you but in general So what's what's your take about the condo industry. Well you guys get a bad rap just like politicians sometimes the management agencies and so. It's, it's a strange world. Sometimes it's, I think a proper word is it's incestuous with developers sometimes people switch jobs between managing associations and developers and you never know who's I think a common feeling for condo owners and HOA members is sometimes you feel like the HOA and condo boards not on your side. And that's unfortunate because the more people were, if more people got involved, then they would be part of the decision making process and help understand why decisions are made that otherwise feel like they're being imposed on you. And then it gets people upset and they don't understand why, why the things happen, but that's because they're not involved. And so, you know, my take on the board on boards in general is that the more people who get involved the better. They help make their community better. But there's a, I think there's a lot of room for improvement. And that's what I'm going to be looking at and some bills coming up. Let's just talk about some of those bills which one do you want to talk about first. Yeah. So, the one thing that I hear a lot of complaints about in my district and have a beach is people buy into a new development or a new, sorry, they buy a home in a development that already existed and they have HOA rules. And they're living there for a couple years and then they get a letter in the mail from the HOA saying hey this change was made by the previous owners, and you need to fix it. And then they get a fine or they get in some dispute, and it's really frustrating. So one of the bills I want to look at is trying to limit, kind of like a statute of limitations on when an HOA or a condo or can issue fines so if they don't. They don't fix things if they don't get things identified before a condo switches property or within some reasonable timeframe, then they can't go after the new owners. Because what happens is, depending on the, depending on the board and how with it they are. Sometimes you'll have boards who neglect that stuff and then you get a new activist board a few years later and now they want to go after everybody, and bring everybody to heal. It's, it's, it's got to be consistent. And there's got to be a timeline and expectations reasonable expectations for homeowners, new homeowners to not be held to be responsible for faults that were made before them and that the HOA should have caught them, not now. So that's one thing. I'm going to comment on that real quick. I think as an industry we support that, provided that take a kind of like a high rise. If someone did something inside the unit that no one could see the effect of the structural integrity of the building. There's got to be some carve outs to protect the building and the safety and the association as well. All of these things come from exterior parents changes from my experience. You know, and I agree with you that that there'll be a point in time that you haven't done something. It's grandfather. I mean I'm actually an expert in a case right now that the exterior changes to the apartment and a condo were made 40 years ago. And the new borders decided, well they weren't made correctly so we want you to tear your apartment about. Which is totally ridiculous. It's obscene. But you're totally right about you know if there's if there's load bearing walls that somebody's messed with and a condo and a structure. Yeah that's not okay. Doesn't matter what the time limit on that is, it's got to be fixed for safety. So, but yeah that's one that I think it might have the best impact and quality of life for people. Another is reserve estimates so I've spoken with you and some other people in the industry about trying to get more accurate reserve estimates so for new developments for example. So we're required to developers are required to give estimates on what it's going to cost to do the maintenance fees, and universally, and I've never heard of a case where this is not true that after the developer then turns over the board to the people. Jump up because, oh my gosh, the numbers were too low, and we were never collecting the right amount of money to begin with, they always, they always jump up. And, you know, whether it's by design or not almost doesn't matter what it does is it, it hurts the consumer. It hurts the homeowner who thinks that they can afford one thing at one level, and then it turns out that that's not entirely accurate. So finding a way to require, maybe independent reserve studies independent third party studies that show what it's really going to cost say to live in this condo. That's something that I think needs to be done. Yeah, you know, as I told you I do a lot of expert work and I have a reserve specialist that's negation the highest reserve study preparation and developers for example could do a level for reserve study by independent, which has some teeth to it but the current law in Hawaii doesn't require the developer to do a reserve study. They leave it to the board, and they give an estimate in their public report. But, allegedly, well I shouldn't say allegedly there's law says it's supposed to be an accurate estimate, but it basically use averages or some number without any teeth to it. And I'm looking at, I can't tell you accountless people I've talked to with some of this litigation that are affordable housing buyers that now have to get second and third jobs as devastated their family income, because the numbers were so so wrong. Yeah. Yeah, and that that genuinely hurts people. And it's just, it's, it's morally wrong. So it needs to be fixed and I know you, and some people are working on, possibly a bill to that effect and I hope I can work either on this. We're down. We're down to two minutes. This kind of goes. Oh my gosh. Yeah. So what are your last thoughts about condo and condo legislation for the year. I see people get involved so that they feel empowered and heard, because a lot of times, and I'm hosting a town hall meeting next Tuesday, a virtual town hall meeting on HOAs, because I think people get really frustrated when they don't understand the laws and what the rights are. And I want to develop a greater conversation with condo owners and boards and HOA residents to feel empowered, because it's their boards. And they need to feel like they are, they need to get involved and they need to understand how they can make it better. And I hope to listen to them and find out ways that I can help. Well, you can be assured that our industry will work with you to have meaningful legislation in the areas you've talked about. I know we didn't get a chance to talk about a couple other ones. But the reality, those are the two primary ones I know we talked about. But the industry really wants a balance. You have to respect the need for safety and rules for association, but it can't be oppressive. People have rights and it's got to be a balance. So we look forward to this year working with you on proposed legislation and I know you're attending the national seminar on reserve public policy that has just been adopted by community agencies to nationally. I was on the task force for that by the way. And so we look forward to working with you this year and a successful year for you in the legislature and encourage all of you watching if you want to go to the town hall how would they do it contact Yeah, you can contact. I'm going to go to my website at the capital, the capital website. That's Hawaii capital dot go. And you can find my website there and there'll be a link to the meeting. If you're a resident of a beach in my district you'll be getting a newsletter today or tomorrow that has a link as well. And if they want they can just call me at 586608 oh and my staff will give me information. Well, thank you very much for being on the show today and thank you for your service at the legislature I know it's a tough job, and you're inside and what you see for 2022 for condos. And we thank you for being here and to all of our viewers. Thank you for watching condo insider will be back again as we are every Thursday at three o'clock. Another show. So again aloha and thank you for viewing.