 The condo insider our weekly show about association living and I'm calling this show it's a wrap. The 2019 legislature is over. I think there were over 4,000 bills introduced in general in the association industry. There were about 40 bills introduced and now we're down to the legislature having adjourned and there were seven bills that will be either law already or are enrolled before the governor and we hope they become law. So I've invited Jane Sugimura my co-host and good friend who has worked with me and others in the industry to lobby for better legislation for associations and what grade do you give the legislature for our stuff? Well I'm happy that they passed Senate Bill 551 so I think maybe I'd give them a B minus. A B minus. Otherwise it would be a very dismal score. Why would you? Because I'm just very unhappy with the way the legislature is it has been operating and you know at the very end at the very end you know there's this tradition when you get the House and the Senate they get together and they sing aloha oi and they didn't do it they lock the door and and then if you look at the photograph of the House there's not 50 people in that circle so that tells you that there's discord at the legislature that's not a good sign. What you're saying to me the tradition where the House and the Senate get together in the House chambers and they hold hands in kumbaya and a sign of unity and love. The House locked the doors the senators were pounding the door to get in and always some of the representatives in the House were singing aloha oi. So I don't know where the aloha spirit was at the legislature but sure wasn't there the last day. You're telling me the word unity didn't exist. There's some discord happening over there and I just hope it stays in the legislature and doesn't make its way to the governor's office because all of the bills that we're going to be talking about today we really want them to pass. They really need to pass. Let's just start out with House Bill 61 the only House bill that has been enrolled to the governor has it's not law yet and it had to do with issues surrounding the priority of payments. Give us your take. I think this is a good bill but first of all it's a it's a fix it's a repair. I mean there was a lot of contention last year and the priority of payments bill basically took a provision that was in the statute that basically allowed us associations to set a priority as to how the monthly maintenance fees would be applied. The problem with that is if you made the resolution 20 years ago and then a new person moves into the unit two years ago right they don't know what that policy is unless you give it to every new person and and and what happens is that sometimes there are late payments or sometimes there's a fine and what they don't understand is that their condominium you know monthly dues is applied to these late charges and fines and attorneys fees and they end up being delinquent and and this resulted in some issues that and and and in a worst case scenario it ended up in foreclosure right because all because of the priority of payments policy and so the year before Bill Act 95 and this was basically Senator Ross Baker's campaign because she said nobody should lose their home because of the you know through foreclosure because of this prior to payments policy her bill basically deleted that and said you can't do that anymore if in other words when when when a person pays their maintenance fee bill it applies to maintenance fees it even if they're delinquent even if they're late charges even if they're fines and penalties though the maintenance fee payment only applies to that monthly payment and if there are late fees or attorneys fees or fines that goes it just kind of goes to the end but then there were some other payments that really needed to be addressed and these included things like utilities you know like a sub meter electrical charges and so because that wasn't in there the first go around there were other items and and and so that's what this bill this is Bill fixes what should have been done last night. Let me just summarize it in a different perspective. Previously before last year's Act 95 boards with that prior policy where they apply payments and first there'll be the legal fees then the late fees and we go down the ladder and usually leaving maintenance fees last right resulting in unpaid maintenance fees if the person didn't pay the fine for example relating to a foreclosure the senator Baker rightfully so changed the bill that any payments made has to be to common expenses first right so you couldn't get into this unintended consequence of foreclosure I want you to think for a second about your visa bill when you get your visa bill you may have charged at Macy's and Nordstrom's and Best Buy whatever it may be when you make your payment you're not saying pay Best Buy we're not playing Macy's or whatever it's just going into this big computer just like management companies and they're applying this lump sum and they've got to apply it to something so there's a priority of payment they have to apply it and with the original bill did it didn't give the board any latitude and after paying the common expenses how to apply the rest of the payments and with this bill does is give them latitude to establish priority of payments for expenses after the common expenses have been paid therefore you protect the unintended consequence of the foreclosure but the same time the board can say first the storage locker next to parking fees next maybe the first priority will be the having to buy the HO6 policy because the owner didn't do it so it gives them a little more latitude because the way a computerized world we live in we demand some way for management company to efficiently apply a gross amount of money to all these individual charges the end result is is that they would not be applied to late charges legal fees or fines yeah they have to be less late charges interest and legal fees so it's really a fix to take into consideration the need to first apply payments to common expenses then give some latitude on the non-common expenses every association is a little different and then in all cases legal late fees and fines have to be last right so that's what that does and that is enrolled to the governor at pass unanimously out of both houses both chambers house in the Senate doesn't seem to be a conflict my prediction is it comes law yeah I think I don't think that there is any issue there well since you brought up Senate bill 551 which is the foreclosure bill let's dive into that one okay and in a way they're kind of related because the same some of the people who were opposing 551 were the same people who opposed the priority of payments this is you know because those condominiums had priority of payments they were applying it to late fees and attorneys fees and fines and and so people were being put placed into foreclosure because of the priority of payments and so they were saying that this is a form of abuse and and and 550 Senate bill 551 basically confirmed that the associations could do non-judicial foreclosures but I think it clarified that you know that you know certain conditions had to be present before they could do it but the important thing about 551 is there was this appellate court decision and appellate court decision basically said that that the associations that that that did non-judicial foreclosure didn't have a legal basis for doing it because the language in the you know that there was nothing in the the legislature I mean there was no language between the homeowners and the association that allowed them to do it despite the fact that there was language in I-14A at the time which because that was 1999 so the general issue was is that for years 1999 as well part one existed they were using non-judicial foreclosures that got repealed in 2012 I think it was in part six took its place but during that period between 1999-2012 ignoring maybe the statute of limitation issues people were foreclosed on a judicial and what happened was when the appellate courts ruled you had to have in your governing documents it opened the floodgate of plaintiff attorneys and people who lost their homes to sue their associations saying you didn't have even though I'm delinquent didn't pay my bills you have the right to you didn't have the right to foreclose on me and now you're asking all the paying owners to reimburse and to pay a penalty to the person who never paid and was foreclosed on and this basically fixes that and reaffirms the right that this was always the legislature's intent right now in fact the preamble of the bill goes into great detail and points out to the fact that the committee report in 1999 specifically addressed the fact that the legislature wanted intended though the associations to be able to do non-judicial foreclosures because at that time what they were addressing was of the fact that the courts were we were going through a recession and the courts were just jammed with any kind of foreclosure and so we couldn't get we couldn't get a motion for summary judgment for six or eight months you couldn't get a motion to confirm for another six or eight months it took you over a year to get a foreclosure to do a foreclosure and meanwhile you're not getting paid if you're the association you're not getting paid and then the other owners who are making their monthly payments are then required to you know pay additional funds which isn't fair I think what it is that it's a clear explanation to the courts what their intent was and only really applies to these old foreclosures because you know the ones that were foreclosed upon in part six wouldn't be affected by this I don't think no and there are a lot more safeguards now I mean where you know you have to you know you have to do the notice of the default letter and in this in this legislation it makes it really clear that you cannot do a non-judicial foreclosure against active military if you don't you have an active military person you have to go and do a judicial foreclosure but having been to all the hearings and it was like delayed three or four time in conference committee it was a pretty bitterly fought bill yes because the plaintiffs attorneys and a few owners who lost their homes were making emotional testimony and frankly it wasn't very factual if actual history of those particular cases but the reality of it is it's gone it's in role before the governor any prediction well I think we're going to have to work real hard and still keep up the fight because you know I've been told that there's the same people who opposed by 51 are also going to be lobbying the governor to veto the bill and so the it's not over it's not over and we will be asking our constituency and you know association members who's you know contact the governor and ask him to sign Senate bill 551 okay before we take a break let's take an easy one which is Senate bill 552 which has to do with giving the developers 514 a this is been enrolled to the governor as well so it's not law yet what was the 552 we sent a bill 552 and what was the intent of that that one too what happened is earlier there was a previous bill that that repealed 5 514 a so that and that bill became that law became effective on January 1 of this year and what happened is you had condominiums that were created under 514 a and maybe some of them had not been sold some of the units had not been sold and so therefore they would not qualify under 514 b and so and and you know I remember when the the bill was first introduced you know to repeal 514 a and the same developers came and said oh no you can't do this we have these units that are unsold and and senator Baker says well you got a year you got a year go out and sell them I mean it's been all these years you've had you know you you've had it so you know and you got a time to fish a cupcake go out there and sell those units but what happened is by the end of 2018 there they remained unsold so in order to be able to sell them they came to the legislature they asked for another year and I think that's what this is but the important thing is if the owners of the board members here 514 a has been extended for another year that's not true it only applies to developers with unsold units were in the original public report they were they were formed under 514 a it's got a very narrow area for developers of unsold units so for associations out there that have been formed 514 a has been repealed and 514 b is the law on that note we're gonna take a short one minute break and we'll be right back aloha and my boo hi my name is Emmy or Tega Anderson inviting you to join us every Tuesday here on Pinoy power Hawaii with think tech Hawaii we come to your home at 12 noon every Tuesday we invite you to listen watch for our mission of empowerment we aim to enrich and lighten educate entertain and we hope to empower again Maraming salamat po mabuhay and aloha aloha I'm Cynthia Sinclair and I'm Tim Appachella we're hosts here at think tech Hawaii a digital media company serving the people of Hawaii we provide a video platform for citizen journalists to raise public awareness in Hawaii we're a Hawaii nonprofit that depends on the generosity of its supporters to keep ongoing we'd be grateful if you go to think tech Hawaii calm and make a donation to support us now thanks so much we're back and we're talking about the bills that have either been made into law because the governor has signed them for those that have been what we call enrolled to the governor where he's gonna make a decision either put it on the veto list and I think he has until June 24th to put it on the veto potential veto list and he has until July 7th to veto it and he doesn't veto it automatically becomes law let's talk about just a couple real miscellaneous bills seven Senate bill seven twenty five that has to do under the current law I shouldn't send to the current law because they signed this that's act number seven now but the previous law said that associations after their annual meetings only had to keep the ballots and proxies for 30 days right so what does this do you know the associations have to keep it for 90 days and this is for the people who have questions about you know an election and so it gives them an opportunity to challenge an election and so it just means that you keep the ballots 60 days more longer than you usually do it was interesting about that because from a technical point of view you have 90 days to give the notice you want to review it so it doesn't mean in the 90th day they're gonna burn it if you would have a letter so I want to review it and they've got to make them available to you they couldn't let the time run out and and do something so you have 90 days to do it and I can just speak for most of the major management companies I don't think we ever destroyed those things for well over a year after the election because of these types of questions that could come up there was no real incentive but the industry took the position there's no harm in this bill to give them a couple more months should there be a questionable election it's almost review it so that is now act number seven it is law so you are required to maintain the ballots and the proxies for 90 days from the date of the annual meeting and and that's what Senate bill 725 does and it is law act number seven and this is this next one is also law which allows the electronic voting Senate bill 1288 became act number 14 which allows electronic voting by members under specific circumstances yes and and and I guess this is a law for time shares are huge or large condominium associations right yes the problem is when you get to these 500 700 unit condominiums these timeshoe organizations counting ballots even for simple yes no ballots be very time consuming because it's manual today in this electronic world we live in there is software secure software with audit trails available back I just met with a vendor a couple days ago you're looking at his platform it's incredible the detail that's available and the protection and security that's available not what it does is allow the board voluntarily to choose electronic voting that meets specific criteria which should be the safety factors and you know any audit factors but the criteria is is this expensive well this particular vendor without much discussion was saying you could do the whole meeting or a dollar a unit so if in fact you had a 700 unit association it'd be $700 to use our software before any negotiation on the price which may be available but what happens is you would do this voting in a really incredible way on your phone and there are provisions for manual voting and you would have your election results in two or three minutes well with an easy audit trail oh that's wonderful yes so I mean they can if somebody brings it up they can opt out they don't have to it's strictly voluntary because if you're a 30 40 unit association where 10 or 15 people should typically show up to the meeting because of the proxies it doesn't make sense because you can count them manually just as fast as you can anywhere else we have associations with 780 members 41 percentages of common interest 41 different types of units you know with all these different classes of ownership with between the mixed use and the commercial and who can vote that can all be entered into the system with all the safeguards so that you can do this right on the dime right momentarily that's impressive and then the association has to voluntarily say do they want to do it they don't have to do it so it's just we're trying to move the industry into more of an electronic world because who wants to sit there for an hour while they count the ballots right you know this is this is voluntary and what it does is it just allows a different form of doing an election and I've met with one vendor but I have to tell you there's other vendors out there working on this to provide solutions so in any competitive world new product the pricing will probably move downward versus upward at this point in time we shall see yeah so this look at Senate bill 1325 which is now Act 27 it has to do with investment and this is the banks for pushing the banks for you know really one of this because I guess they they have a product that they they feel is is something that would benefit them as well as the associations but what it is is there's something called a government money market fund that has the same principal protection and what happens is that associations want to get a little higher yield would want to buy into a government money market fund most of the local lawyers I know in town who do this as an industry said the current law already provides for that maybe a little unclear but they believe you look at the language they already provided for this well you know the banks and their lawyers they want to be protected they're not putting you into something they can't do so this was a clarification bill in my book it didn't change anything because I tell you many many associations already invest in government money market funds it just clarified that that is one of the acceptable options that already that the governor already signed that one he did that's Act 27 so the next one which has not been signed yet but we should mention is Senate Bill 767 which is the famous handyman bill that you know under the old law you could hire a handyman an unlicensed contractor for up to a thousand dollars and that thousand included the GT so you can figure 95 percent nine hundred and fifty bucks you could you could sign a contractor under the old law which remained under the new proposed law you couldn't take a five thousand dollar job and sign five one thousand dollar contract you'd be looked at if it's the same part of the same scope of work that you'd be looked at trying to defeat the law but the new law does you know it allows 1500 it goes to 1500 dollars plus GT right so it's like you can do more it's like a 55 percent increase in what you have today and you know and I don't remember the exact days but it was like when this bill was originally passed it was the 1980s the late 80s and so the contractors were against it and the Honolulu Board of Realtors was the big organization pushing this we supported it but it did pass and it bill 767 which allows now the handyman exemption unlicensed person to do up to 1500 dollars of work plus GT and that 1500 dollars includes labor and material oh okay so that's that's what that number is that's pretty much the where the legislature the rap on the legislature this year but since we have a couple of minutes City Council Bill 13 what's that all about that's not even that's they've been passed yet but no it's it went to it's in the committee and their committee meeting is on Tuesday and Bill 13 is a bill for rubbish removal it's a bulky item pick up and there is also a pilot project that's in the works the the mayor did a press conference last week on it the the pilot project starts on June 1 and it goes from foster village to Waikai and there's a lot of condominium associations and co-op buildings in that area that's where the problem is and then and the city environmental services these are the guys who do you know the rubbish pickup they've been making the rounds to the neighborhood boards and so they showed up at our neighborhood board last month and they talked about it and I asked the whole bunch of questions and they couldn't answer them I said number one and they told me the bill doesn't really specify but it applies to condos and it means that the your site manager or your resident manager is I mean the whole bill is that instead of having a special one date for bulky item pick up in your area each whole household will now call the city make an appointment and for a single-family home I think it's three cubic yards for an association they told me it's 20 items and then what you do is you call the city make an appointment for them to pick it up and then this is a bulky item pick up by appointment and you pay and then so once you call it in and for an association I'm not talking about single-family homes because for an association your site manager has to call the city and say you know we have 20 items to pick up and you have to tell them what it is and for anybody who lives in a condominium and has is that is involved in bucket you don't know what's going to be on the sidewalk on the bulky item pick up day you don't know how what's going to be out there and you don't know how large it's going to be well everybody just goes they see their neighbor across the street put it out there and they go so I got this to go put mine out at the same time right and so and I hate to say at the cost of administration of that I'm just collecting this because I can't imagine it's going to be super expensive but even at $10 or $20 a pickup the cost of administration is going to be awful and you know and the thing if it is is that they're making the association do the collection or maybe maybe you've got three or four people in your buildings putting out stuff for that one collection and you have to be the one to then collect the fee from the residents and you know to me that's really not our function but we've survived the legislature and now we have to go back to the city council with and then we have the vacation rental bill which we've never gotten involved in because we represent both sides of that and we want to let the city council work through that but again thank you for all your hard work in the legislature you're very important to us and you do a lot for us in the legislature and we appreciate your volunteer time on that and that of Hawaii council community association we thank all of you for watching condo insider we've given you in 28 minutes a quick wrap on the 2019 legislature and you're welcome to go online to Hawaii legislature and and see the bills in full thank you for watching