 Good afternoon and Aloha back to Kondo Insider on Think Tech Hawaii. I'm your host Jane Sugimura and today we'll be discussing open board meetings. This is a very important topic and we've had several shows on this particular topic but we still get questions and concerns from Kondo owners. They keep coming in and so you know I think it's worth it to talk about it again and you know the first issue is why are board meetings and why are open board meetings important and I think the most common sense answer to that is because owners are allowed to attend and owners are allowed to participate and and sometimes this is their only connection with you know working with the board unless they see them in the building or down at the swimming pool or at the barbecue you know to talk about you know the building and so you know it's really important to include the owners in these discussions to allow them to participate and yeah they may disagree with you I mean because not everybody is you know is in agreement with the board and heck if you're gonna disagree you might as well disagree in public with you know everybody there to you know chime in and so that's why these open board meetings are really really important because it does allow the owners to participate and they should participate they are members of the association they pay maintenance fees so they're paying you know for the upkeep and maintenance and they're paying they're contributing to the salary of the employees on the on the premises and so yeah they should they're entitled to you know have their two cents and that's why these these board meetings you know you know should be open and the the statute 514 b chapter 514 b which is a statute that regulates condominiums the intent of the statute and the section particular section I'm talking about is 514 b 125 and that's the one about board meetings and and and the intent behind that statute is to allow is to make clear that owners are allowed to attend the board meetings and they're not supposed to just come and sit there and listen I mean that's not much fun and you know and if I was a owner I wouldn't I don't think I'd you know want to attend a board meet where I just sat there and listened and I wasn't allowed to make you know put in my two cents so anyway the statute is intended to allow owners to participate and uh and and and and that's what I want to make really really clear up until three years ago the statute had language in it that's said that the board could limit board participation I mean owner participation and what it and the words in it basically said that upon a vote of the board members they could vote to exclude owners from participating that language was removed from the statute over three years ago and so there are a lot of people who sit on boards old timers who don't know that the law has been changed and so they may you know they may think that it's in that it's the law but it's no longer the law used to be but not anymore okay as of three years ago a state of hawaii hooked that language out to make it clear that owners have a right to participate in in in in the words of the statute in the deliberations and the discussions of the board and that's not limited to the owner's forum because some people say oh yeah well we have an owner's form and yeah we let our owners speak during the owner's form no no no no the statute says that the owners can participate in the deliberations and discussions of the board that means that you have a board agenda and let's say you're talking about plumbing repairs okay and there's a and and while the board is discussing this you have an owner who raises her hand the chair should recognize that person and that person may have a comment or a question or an observation and you know these are all very important to the board in making its decision and it may not be what the board wants to hear but they are owners they live in the building and you know they may see things that you know the board members don't see or don't know about and so it's very important you to allow this the owners to participate even though the owners can participate that doesn't mean that they can take over the meeting you know hijack the meeting in other words you get let's say you get a bunch of people who are unhappy with the board and they decide they're going to take over the meeting and they're going to ask all kinds of questions and they're going to be you know being disrespectful and say oh the board president is doing this and that and he shouldn't be doing this and that no that kind of stuff is not going to be permitted because the statute also says that you know even though owners can participate in the deliberations and discussion on the board the the board can adopt reasonable rules of owner participation because the main thing about a board meeting is the board has got an agenda and those of you owners who have ever attended a board meeting know that the agenda is posted it's posted somewhere in your building that says that there's going to be a meeting on such and such a date at such and such a time and there's an agenda the main purpose of the meeting is to get through that agenda okay but the board can adopt rules reasonable rules is what the statute says and typical of the rules are uh owners who come and you know each one can speak for maybe there's a time limit one minute two minute three minute four minute five minutes or whatever time they decide on and if you've spoken once you don't speak a second time until everybody else who wants to speak on that subject has had an opportunity to speak and that's fair right you know and and so after everybody has spoken and if you want to come up and say something else then you can raise your hand but you know you got to understand that that there's a time the the board has got to get through their agenda so you don't want to be repeating stuff as somebody else has already said but if you have something new to contribute then of course you know if the if if the chair and usually it's the president uh wants to allow you to speak and it's and the chair is as as part of you know running the meeting decides whether or not you're going to speak a second time and and the the the reason why you may not be allowed to speak a second time is because the president's got to get through uh the agenda and and they can't let the uh owners participation and input take away from the fact that you got to finish the agenda okay and to the extent that you're allowed to participate it would be uh limited by these rules and uh the rules once they're adopted I mean they have to be adopted by the board they and and in my building they're going to be posted along with the notice of hearing of the meeting every time those rules change they got to be circulated to the owner so that the owners know what the rules are I mean that's fair right if you come to the meeting and you're allowed to participate you should know what the rules are oh and one of the one of the the standard provisions of these reasonable rules is that people got to be just people got to be respectful in other words this is not the time to be calling people names uh making allegations that somebody is a cheater somebody is a fraud those kinds of comments will not be tolerated and you can be censored in other words totally or you can be you know and you're told you can't participate you may even be asked to leave the room okay and that's fair too because you can't have you can't come in and disrupt the meeting the board has got important business to uh to do and so you know that's the primary purpose of the meeting and oh but as part of the meeting the owners are a very important part of the meeting their input is important and uh and that's why you know the the rule was changed three years ago to make sure to clarify that owners did have a right to participate in every part of the meeting okay and you know the the owner participation is important because it allows owners to ask questions to provide feedback because like I said before you I I I don't know how many members uh you have on your board but you know it's typically nine people or seven or five but those people you know maybe have jobs and they're not there you know 24 seven and so maybe they don't see everything and so that's why it's important if you're the owner and you're sitting in the audience that you're and and you come to these meetings that if you see something or you hear something then maybe it's not not not what you've seen or if you have a question you should raise your hand because it's going to it's going to affect how you know board members decide on whatever issue is on their agenda and the another reason for having open meetings is to allow free communication between owners and the board and I can't emphasize this enough. Sue Savio who runs insurance associates and her company you know insures a whole lot of condominiums she tells me that Hawaii's got more lawsuit and claims made against the board by their owner. This is because there seems to be some miscommunication between the owners and the board they can't seem to get along and the owners file claims which they're entitled to do and it could have been because of a miscommunication a misunderstanding because people don't talk that's what happens when people don't talk and anyway this is not good for the association because every time that happens then it affects your insurance officers and directors the association has an officers and directors policy and every time a claim is made guess what if your association has a whole bunch of claims the premium goes up and I don't know how many and even though it's not an expensive coverage because I think typically a couple of years ago before all these you know before it got really bad D&O officers and directors insurance coverage was about two or three thousand dollars a year and if anybody if any of you want to go and look at your finances you'll find that the D&O is probably up to five and six thousand dollars now mainly because of these claims and and my association we haven't had any claims but our premium goes up and you know to me I get really mad because why am I premiums going up that's because you have condos in the state we're in the same risk pool so if I'm in the same risk pool as a hundred other condominiums and 50 of them have owners and board members who are fighting with each other guess what my insurance premium goes up even though my my my building has no claims at all and so that's why you know I am I am asking and you know I sometimes you know get on my you know preaching bench and you know and tell people you got to get along because you know this if you don't get along I mean you think it's it's there are no consequences but it is your insurance premiums go up if you look at your finances and you look at your D&O and your umbrella coverage for the last five years it's been going up because there are claims and lawsuit and you know so and if there's a way that we can minimize these lawsuits and claims uh we should do so that's why the open board meeting is so important and yes you're going to have disagreements you can't live in a building with 300 other families and not have a disagreement on how the building is run but that's okay it's okay to disagree okay the the the point is that you got to talk and be transparent and so that you know where you know where there's a concern and you should address it a concern doesn't go away because you you don't address it or ignore it it festers it gets bigger and next thing you know there's a claim filed and your insurance is going to go up and that means that you know that means that for everybody in the building the insurance I mean because they pay maintenance fees and your maintenance your insurance is included in your common expenses so if the insurance goes up that means your maintenance fees go up okay so that's another reason why you know we we all gotta try to communicate and one of the reasons and one of the biggest opportunities is that a board meeting and so yes and and if you're going to be doing a project and maybe there's going to be a special assessment you want the owners to know you don't want them to find out by a rumor then then then they're going to be all mad and say well geez how come you didn't tell me and how come you guys didn't do something about it before making a special assessment because there's nothing that gets owners matter at their board and if you do a special assessment they're going to say how come you didn't plan how come you didn't do this how come you didn't do that and that's why you need to have these open board meetings so that you know if there's a concern that the owners know about it that they're involved in the decision-making process and they know that you've taken steps to try to repair it or to try to undo these bad effects you know so that you won't have to go out and spend money on huge repairs and you know so they know the story behind the special assessment before they hear that oh did you hear the board is going to do a special assessment and then everybody gets mad okay so that's why you know and you want to make sure that these issues that might become contentious are discussed at the board meeting so that the owners can hear it and yeah it's not good news it's not good news to say oh well oh you know we've been having all these plumbing problems and you know we're going to hire this engineer and the engineer comes back and says oh you have to replace all your pipes and that's going to cost you 27 million dollars yeah and you want to share that with your owners because maybe you know if you share it with your owners they would have come up with some ideas on how you can address this and you know hiding these decisions you know in private meetings and in executive sessions is not a good thing especially if it turns out that you have to do a special assessment and as I said before nothing's going to get your owners angrier and if you do a special assessment and the first thing they're going to say is why why you guys screwed up again you guys weren't doing your job and this is why it's important in the board for for boards when they have their meetings to discuss all things that deal with the building in these meetings and like I said with the open communications I mean it's it's it's one of the most important things and it might not be pleasant but at least it's it's transparent and uh and and and I think people you know people can deal with bad news and and unpleasant situations but the thing of it is is you got to go through the motions you can't you know put yourself in a cocoon and especially the boards and decide oh well we know better and so we're going to do this in executive session and and I will be getting to executive session because I've been hearing one of the complaints I've been hearing is boards take decisions that are unpopular or might be might be controversial and they stick them in executive session but the statute says executive session is only for certain things and so if you're a board and you're discussing the the pipe replacement project uh and and talking thinking oh we might have to do a special assessment that's not something you do in executive session that's what you do outside with the with the owners present so that they know what's happening and and and in fact the statute let me let me read from the statute there are only certain things that you can do in executive session and the primary reason why you go into executive session is it deals with confidential information that you don't want to disclose in a public meeting okay and so the statute says one of the issues is personnel and personnel is is is very confidential because it might be taking disciplinary action against your employees wages benefits and that's not something that you discuss in a public forum how would you like you know how would you like it if somebody was discussing your job and your performance and your wages in a public forum that's why personnel issues are in executive session another topic that you talk about in in uh executive session is litigation that involves the board or may involve the board and you know so so this involves you know very confidential information because you're talking about exposure if we do this and that we're going to get sued if we do this and if we do this and that maybe we might not get sued so these are discussions that happen in executive session not open to the public and especially with ongoing litigation because you know with ongoing this litigation one of the issues is settlement and so you don't want and settlement is something that usually very private that's discussed between the attorneys for the party so you don't want to discuss it in an open forum with everybody in the whole world okay so that that's an issue that is an executive session matter uh anything that involves attorney client privilege the attorney the the uh association is the client and so anything that deals with attorney client privilege uh is is dealt with in executive session and not in the public portions of the meeting just because it involves an attorney doesn't mean it's an executive session topic like let's say I know with the pandemic you haven't been able to have annual meetings and so you ask your attorney for an opinion as to when you're going to be able to have your annual meeting that is not a subject for executive session there's no confidential information that's involved there's no attorney client privilege that's involved and so those kinds of disc in fact if you're an owner you probably are wondering how come we haven't had our annual meeting and you would probably be interested in that discussion and so it shouldn't be happening in executive session and and for uh or boards who are listening to me if you are uh if you're not sure it's the whether it's executive session and it's not part of these topics call your attorney do not rely on your property manager they're not an attorney they don't have the legal information to answer your question as to whether or not a certain topic is considered executive session material executive session is very limited very very limited so you don't talk an executive session is not a place where you talk about things that you don't want the owners to hear because you're afraid they're going to get mad at you okay you have to remember that executive session is only limited to certain things um uh oh another another topic that is executive session are ongoing negotiation and let's say your your negotiations for some contract uh having to deal with a big project and you're dealing with three or four vendors you don't want to discuss it in a public meeting because somebody in that public meeting may go tell one of the prospective vendors what you're talking about and and those are negotiations that should be confidential until you reach an agreement so like i said those are the only four uh matters uh that have uh that can be discussed in executive session and the things that are involved in an executive session if you sit on a board these are not matters that you go home and you talk to your spouse about or you talk to your uncle joe at a bar the things that are discussed in executive session are discussed there because they're confidential and board members have a fiduciary duty to their association and that means that if it's confidential it doesn't go any further than the people in the room so you don't go home and you don't tell your your husband or your wife what happened in executive session and you don't tell your neighbor and you don't tell your uncle joe uh it's confidential means confidential okay and and and and this is and and uh and what happens is some people you know don't understand confidentiality they go home and they they tell their wife the wife tells the neighbor and before you know and you know like the game the kids play i i don't know what it's called now but when we were kids it was called telephone and what happened is you would whisper something into the person next door and then you would sit around in a circle and see what comes out when it came back at the end and it's different and so that's why with executive session matters if it's confidential it's confidential it means if you're a board member it doesn't leave me it stays with you with the people in the room and when you leave the room then um you know you do not discuss that with anybody else and and with executive session it should be very limited like i said you know it's only for special confidential matters not for stuff that you don't want the owners to hear i mean that would be one of the worst things to use as a rule but anyway well we're gonna have to leave it there because i'm running out of time and but you know you've been watching condo insider on think tech hawaii and today we've been discussing open board meetings and uh i want to thank the viewers for tuning in to this episode and i'm going to be doing next week's show next week's show uh we're going to have senator Sharon moriwaki and she represents i think senate district 12 which is um has a lot of condos i mean that's kakaako Waikiki uh alamoana uh moiliili so anyway and and Sharon was one you know she introduced several bills and uh the the house companion to one of her bills is you know is going up to the governor's office so we're very pleased with it i think one of her other bills also made it through so uh we we should have a very interesting conversation about condo legislation and i'm going to i'm going to ask her to about that ohaw project out there you know across from uh ward warehouse out there by the um uh by alamoana in the marina there and you know what's what's going to happen i mean they they were going to try to build condos out there and uh the legislation that was pending got knocked down but the newspaper says ohaw is still going forward so i don't know what's going to happen so please join me next week uh with Sharon moriwaki and we're going to be talking about condo legislation and maybe the condos that are that ohaw's trying to build uh up there by alamoana okay thank you again for joining us uh hello