 Aloha and welcome to Kondo Insider, Hawaii's show about association living. We've been doing this for over a year now and had tremendous response by owners and board members alike as they liked the education we're providing. A couple weeks ago we started a review of Hawaii Revive Statues, the Kondo Law, 514 B went about halfway through it and we said it was a four-part series but it looks like it's going to be a five or six-part series before we're done with it. I'll bet you it's eight. But anyway, I have to my left, the guy, my expert on this, Scott Shroy, Director of Training for Associate, and we're going to be continuing on with the records with regard to that. Welcome back Scott. Well, thank you for having me and unlocking me so I could come and do the show. Well, my nightmare has returned, all I can say. But anyway, let me say this, we have an exciting thing today before we begin the 514 B, we have a call-in question. I think that's exciting because people are starting to watch and have questions. I think that's very exciting. And so I've got this question I'm going to share with you and me. We're going to talk about it briefly before we get back to 514 B but I do want to tell all of our viewers that if you have a question we encourage you to contact us and join our conversation at 415-871-2474 and we'll do our best to answer your questions. It doesn't have to be on our topic, it can be about any association issue. But let's go right to our viewers' question and it is as follows. I was verbally assaulted and threatened by the site manager and board director of my condo over my dog being too aggressive. They threatened to kick my dog out of our home. After being verbally threatened, we were sending a citation as well as a letter of compliance that stipulation in terms we needed to comply with if we wanted to keep our dog. When we attempted to explain ourselves at the board meeting, the president of the board cut us off, didn't allow us to explain ourselves. My question basically is as follows, did the board of directors properly operate within the judicial powers and what are our rights from an anonymous viewer? So the issue is really clear, but let me begin saying this is kind of a topic I've been talking about previously, that first of all, number one, boards and employees of associations like the resident manager, site manager should always treat the owners with respect. Absolutely. They have to learn how to talk to people and discuss issues in a professional tone and never should be threatening, although we're taking this question kind of verbatim and what one people might find insulting or threatening may be in the eyes of the other person, not so insulting and threatening, but I think it's incumbent upon the association to do everything within their ability to number one, treat that owner with respect and try to communicate with them in a professional manner. That being said with regard to House rules, and certainly they have to have rules for pets and an association from sanitation to other reasons, for House will really be enforceable, you know, there has to be a right of appeal to the board of directors, so when that owner goes to the board of directors, that board should be respectful to them, give them a chance for a fair hearing to explain themselves and more times than not this is done by invitation to an executive session, so we don't have to drag the neighbors in and everybody else and they can have a conversation in private about what the issues are, hearing both sides before coming across hopefully a resolution. Finally though, based on what this question was, let's just assume that the board didn't give them a hearing and let's just assume that the site manager wasn't as professional as we would like, what are your options? My answer is what I've been saying all along, we have a law called Act 187 that for a very nominal amount of money an owner can request that the matter be mediated with a retired judge by going to a company like Dispute Prevention Resolution or DPR and if the viewer wants more information he can call the hotline and after the show we'll give him how to contact them, but if he really feels it's been unfair and unreasonable and he can't get the board to meet with them, he should then fall for an Act 187 mediation to have it properly resolved and the current laws before the legislature make it mandatory to the extent that the boards don't have a choice about whether they want to go to mediation or not and maybe just that filing will cause a catalyst for them to invite them back and talk about it. What do you think of my thoughts? Well I think your thoughts are right in line, I also realize that whenever you're dealing with pets or children that is a very emotional issue so handling it in executive session is probably a good idea so that you can calmly discuss the issue at hand instead of having a room full of emotions and again like you said we're seeing one side of the story and we're just assuming that this is actually what happened but I think when one of the things you pointed out is the board and any employee of the board like the resident manager should treat all owners with respect but I think that goes both ways too that the owners at a board meeting have to realize that this is a voluntary position they're not getting paid to be up there having these board meetings so the mutual respect should go both ways as well. Yeah I guess this summary I'd recommend for this viewer now is again write the board a letter or email and say look we didn't get a chance to discuss this thoroughly at the last meeting I'd like to attend the next board meeting in executive session and discuss this further if they can't get any opportunity to be heard then consider filing an act 180 set of mediation if they really feel the demands in the letter are unfair based on the circumstances. And I'll point out that just as an example for me if my wife had to choose between me or the dog in a scenario like this well there's no choice I'll be knocking on your door. Yeah I'm afraid of that so please be nice to your wife that's the last thing I need in my life you know. Anyway back to the real purpose of the day show now let me again thank the viewer for contacting us if you have more questions and want to talk after the show we can do that or are you certainly welcome to call the hotline at any time this is the purpose of the show to discuss these things and to all the boards out there treat your owners with respect discuss things with them have open minds and try to find resolutions and at last resort go to act 187 mediation. So let's go back to the intended purpose of the show which is 514b the hawaii condominium law. I would tell all the viewers that there's bills before the legislature today to abolish or repeal 514a so and that's moving along quite steadily so it's probable that come July 1 or some early date of an enactment that the 514a will go away we'll only be dealing with 514b. So finally discuss government structure declaration bylaws house rules. Yes we've discussed meetings annual meetings board meetings executive sessions those types of things and and what I want to talk about now is just briefly let's just review the difference between an annual and board meeting that's you that's me oh okay well the annual meeting is we call it an annual meeting but I like to refer to it as the owner's meeting because that's really where the owners participate happens once a year owners have a lot more discussion going on of what's happening at the condo they can make motions from the floor and things like that they can also have somebody other than themselves representing them at the annual meeting by way of a proxy. The board meetings on the other hand again owners do have a right to participate but that is only open to owners of record and it's basically the day-to-day business that is being discussed and it can happen monthly quarterly I'd hate to have an association that are having them weekly because that's just too much but I've seen that after like a hurricane or something like that when you've had a major event but oh yeah but the important thing I want to emphasize everybody is when you're in a board meeting it's a regular meeting sometimes it's a special meeting for a limited purpose but if it's a regular meeting you can only go into an executive session from a regular meeting you have to have a regular meeting and adjourn to an executive session and under the statute you have to announce what you're going in for and then at the end of the meeting you have to come back out and within reasonable description of what you did in the executive session you certainly wouldn't want to disclose any contract negotiations or litigation settlements something that might impair your right to it's not a final decision it's a discussion yes exactly you wouldn't want to impair your right with regard to what you disclose but you still have to tell the owners what you're going in for absolutely and have that meeting and I think it's also important to point out that the legislature actually had to go back into 514b and clarify executive session because it was being abused right um some boards would call a board meeting to order and then immediately go into executive session and basically have the entire board meeting in executive session so they had to clarify and 514b what you could go into executive session for and your opinion should they take minutes in executive session it's a good question um I always have and I believe you have as well and the recommendation is yeah take minutes uh for the executive session now can an owner request those minutes no of course no but those minutes in let's say litigation can be subpoena I've actually heard from some attorneys that say don't take minutes in the executive session then there's nothing you can subpoena well then there is they subpoena you right and then you have to testify so it's better to have the minutes it's interesting before the legislature this year there's a bill with respect to this that basically um puts some breach of fiduciary duty obligations on a board if they don't do certain things and the safe harbor is if the minutes reflect they voted against whatever this particular issue was so again that would be a reason why an executive session you'd want to uh take minutes so you can make sure your position is protected in case there is a problem down a road but um there's a lot of opposition to this breach of fiduciary duty language uh in the statute so I don't know if that'll come out of the of that particular bill but it's telling you that the legislature is looking at it anyway and it's certainly telling you that your vote whether it be in regular or executive session should be clear so you have that safe harbor if something goes wrong down the road well not only that I've actually seen bylaws that says that mandate that in the minutes each board member's vote must be indicated in the minutes because I had an owner accuse me of not doing it by the board bylaws and I said well yeah the bylaws say board member what their vote was board member what their vote was but when the vote's unanimous that's basically saying all the board members voted unanimous so it wasn't necessary to put their name down each time that they voted if the minute header lists all the people and you'll say unanimous that's adequate you know but the state law requires you to record when it's not a unanimous vote like that the individual vote of each of each director and again it's a safe harbor for you if you voted against something and the board did something that comes back to pose some liability on you or the association that you have a safe harbor that you didn't support the decision so now that we've been through almost half our show we haven't even got the record yet I hope we're not doing this in December you know maybe November yeah thanks giving your records yes one of the largest RICO complaints today is where boards or management companies refuse to give records to owners it's one of that yes it is highest number of complaints and the law is very clear in my opinion almost clear is that any clear with the law but get lawyers I don't know if I'm clear but either way records have to be provided but the law identifies the records let's start out with financial records yeah do they have to provide financial records up to a point it depends on what financial records are being requested and also just a little bit of clarification the statute actually says these are the records you're entitled to request but if you're doing a resale and working with a realtor who is requesting records the records that those realtors want in a resale is basically disclosure what's the maintenance fee what's coming up so their request for certain documents is not nearly as long as what an owner is entitled to right because basically they just want to give you the a synopsis of what's going on at the association so the buyer can make an educated decision and let me just summarize that we're going to take a break after I summarize okay so for the financial statements it's very clear the statute spells it out they've been able to financial statements check registers they're entitled to other delinquencies over 90 days you know they're entitled to contracts they're entitled to journals receivable accounts receivable accounts payable journals the statute specifically tells you what financial records you're entitled to have and so there shouldn't be any question about providing those to owners and in that note we're going to take a quick break hi everyone Ted Rawlsson here host of our think tech show where the drone leads and a lot of you of course have been setting your clocks at four o'clock on friday so that you can make sure you see our show it's not changed it's not going to be at noon on thursdays noon on thursdays new standard time for where the drone leads and where the drone leads is to systems like this capabilities that we're using here in Hawaii these days and we need you to pay attention to this be part of it so see you at noon on thursdays thanks for watching think tech Hawaii and look forward to seeing you at education matters on tuesdays with me carol monley hey everybody it's me and davidson host of a new show here at think tech called on the go what are you going to get during that show i can't tell you i can only tell you that it's going to be fun it's going to be sometimes and i'm going to have a good time and i hope that you do too uh there's a bunch of stuff here think tech this is just another one take a chance on it see how you like it thanks for watching well we're back at condo inside they're talking about 514b and what records need to be produced by law to an owner who requests it and we started with financial records and basically that includes the financial statement that's going to include the general ledger council civil journal counts payable journal a check register those types of financial records but the statute clearly spells them out with respect to that and one of the things is on delinquencies it's always been those delinquencies over 90 days so the ones in a less than nine days you don't have to provide so i'm an owner and i want to see your ledger not my own personal ledger but i'm an owner there and i want to see another owner's ledger can i ask for that no my ledger is my ledger and you know what purpose would you have if it's over 90 days then you have a right to see it but if i'm not over 90 days my question was can you ask for it yes you could ask for it but you're never going to get it because it's personal privacy information you know knowing you the way i should have expected that i know i'm not gonna get you back anymore if you don't get my questions right you know but anyway no they can't get other people's ledgers i even had an owner request once for me they wanted to see bank statements and they wanted to see like the signature card for opening up the association's trust account well you know in the privacy world signatures can be stolen in a world of electronic banking there's privacy numbers in there bank statements and signature cards are not listed as documents you can get copies of and certainly a board could voluntarily do it by redacting blacking out the privacy information to protect themselves but uh the statute is pretty clearly thought through to give information to owners under financial status without taking away people's rights to privacy well and and another respect to you know you're living in a condominium it's a business it's a miniature government and you're the taxpayer so you have a right to see certain documents but that right only goes so far and also a lot of times if it's controversial information that you may be entitled to the statute even says you may have to have to sign an affidavit in order to receive that material so that's the financial record side of it how about annual meetings proxies and validating and voting and things like that can they see that they absolutely do and since you threw one out at me i'm gonna throw one out at you a lot of times especially in a resale uh they request minutes of the last three board meetings and minutes of the last annual meeting and the annual meeting happened 60 or 90 days ago commonly sometimes the response is well we can't give you those minutes because they haven't been approved and that's the wrong response that's darn i didn't trip you first of all the more common practice today is that in the script of the annual meeting they give the board the right to approve the minutes and so the next board meeting they're approving the annual meeting minutes so they are approved minutes which doesn't prohibit the assembly or the owners at the next meeting from amending or correcting those minutes at the next end if there's an error but also because they're draft minutes if they don't have a meeting within 60 days of their annual meeting by law they have to provide the draft minutes so that's the answer yeah you you are correct that's right see you failed to fool me this time but anyway so it but i think it's a critical thing to know that on proxies and voting they can see of them after the meeting is adjourned and they have to make the request within 30 days within 30 days and they might be wanting to double check to make sure the proxies were in the right form or double checking ballots on on votes and the common problem made in that area is that you know people you know sometimes in the political world we live in they're fighting for proxies they want to say how many proxies are there who's got what only the managing agent the secretary's supposed to have that information and they're not supposed to disclose it to anybody except if 10 people gave you their proxy they could tell you you have 10 proxies from these 10 people you couldn't find out what other people have what the board has whatever and the only way you get that is after the meeting is adjourned then the others have the right to request within 30 days to inspect not only the proxies but the tally sheets the voting the ballots those types of and i think both you and i have experienced that where somebody was told over the phone or whatever email you have my proxy but they didn't give that person the proxy and then at the annual meeting they're very upset because they told me i can have that proxy a lot of things can happen between the time they tell you and the time the proxy is sent yeah absolutely it can be manipulated and the law is very clear for a proxy valid it's got to be turned in 432 days before the meeting and and i've had lots of circumstances they say they sent it and but they really sent it or not it's told the owner they sent it and you just don't know but the law doesn't give you any wiggle room it's 432 days before and you either have it or you don't have it and it's the end of the story you know and so that's where it's got to go now how about contracts can owners get copies of contracts they can and i believe the legislature is looking at that a lot more closely as well this year because let's say that the very common one is i want to see the resident managers contract but are there privacy issues by releasing that resident managers contract and i know for years you've been saying there's a lot of gray area that needs to be cleaned up in that well that's interesting because the federal laws on some prior old court cases some attorneys take the position i have a hard time with this saying that the resident manager contracts really an employment agreement so the statute requiring you to give contracts doesn't mean the resident managers employment agreement and then they go on to say because of certain privacy laws what is it bill before the legislature i think two bills today that have language in there that clarifies that owners are entitled to the right of the resident manager in this case contract and they can redact the social security number as private cell phone medical information certain true privacy information but they can't redact compensation and job descriptions now i want to caution everybody who's listening to the show that that law has not been passed yet no it has not yet so we still have that controversy in the industry a little bit although i personally say it's very much we know what the president of the bank of y makes that you know you as a an owner have to pay maintenance fees by your agreement and the contract you have with the association when you bought your unit i think that owners should be entitled to transparency and be able to know what the senior person makes and yeah there's some risk if he can be used against you or in a social media campaign but uh so i've been told by some senators in our state that comes with the territory comes with the job you want this kind of job get get used to it i guess we all know what the senators make so i guess it's fair so anyway um how about bids you know you're working on a bid and so you're going to get a contract for spalling you got five bids do owners get the bids absolutely not because they're still bids as a matter of fact sometimes bids are things that are discussed even in executive session because you don't want that information to be generally out there and the same would happen with a bid you know if an owner got the bid and his friend works for another company that's part of the bidding they can pass on the information and that's why bids themselves are not part of that that's correct and i've actually had owners who are upset saying i'm going to call everybody have been on this and tell them i'm going to sue them if they take this job they didn't want the association to spend the money and so they had to pay for the cost right so i mean so but the truth of the matter is owners need to know that they're not entitled to bids however after the contract has been let and there's no apparent legal reason or some other reason i see no harm letting the bids go at the after you've gotten through the analysis negotiations etc i see no harm in it but the statute doesn't require you to provide it so how about the common one owner's list i don't want the owner's list i want their email their birth date where they live all these things this is actually one of my favorites because i think our statute is very clear in this that an owner is entitled to the owner's name and mailing address this has been challenged actually a couple times where owners are trying to say well the term address also includes email addresses and when you look through the statute you do see references to electronic communication emails etc except there where it says an owner is entitled to name an address and every year frankly an issue didn't happen there's a bill before the legislature to require the management company or the board or the site to provide the email address of owner and and the legislature to date as well as the industry has said look people want to live in their home and quiet enjoyment they don't want to be badgered and of course even though there's a requirement you can't issue that list to anybody else does the amway salesman and i think it's the amway but you know they get it and they get used for unintended consequences and purposes so owners and listeners need to know that the board has no obligation or the management company has no obligation to give you more than the names of the owners and they're mailing and they're mailing that that's it and that's the end of it now of course we realize in this day and age there's probably other ways to get that information without even going through the board or through the managing agent but they can spend their time on google looking for it and one of the other common questions you know because you can request anything from the board that it may not be enumerated in that long list of what you're entitled to but can you get the email between board members but that's now you threw me again you're going to fire me eventually but you know a lot of times the board members do make their email or an alternate email available for conversation it's not just the email the board the answer is no to that but if you and i going back and forth on a discussion on painting the roof blue or whatever it may be can i demand as a record all the email we sent to each other well that sort of creates a problem now doesn't it so we're both board members and there are three other board members who are not privy to that conversation you and i were doing via email that could create a dangerous situation it's a sticky wicket because the reality of it is that certainly if you had a lawsuit going they could subpoena you'd have to provide it yes but as far as a general record keeping under the statute that is not listed as one of the items owners can get and that is the email among the board as a whole or board members individually or whatever that is not a document but what is important to note is that owners can request any document they want the board doesn't have to give it to them if it's not enumerated in ls yep but the board does have to reply in writing within 30 days that's right they're either going to give it to them or not give it to them or why you can't the board can't say okay we've got this request but none of the documents on here are the required one so we're not even going to respond that would be the wrong thing to do right and believe it or not we're down to one minute we haven't finished records yet but we could probably finish records in the next three or four minutes of the of next week's show and and so at that point in time i'm going to thank you again for being here to put me up with all my abuse you know and i give you lots of abuse because i have great respect for you and we've been doing this a long time together and thank you everybody for watching condo insider and we begin to invite you to send us questions send us email contact us so we can help answer your questions and we will see you again hopefully next week and aloha