 Welcome to The Condo Insider. I'm your host, Scott Shirley, and this is a program where we talk about condominium issues, both for board members and for owners. And it's my pleasure to be doing my first hosting today. And I'd like to introduce our guests that we have with us today. I'm very pleased and honored to have her as my first guest and that's Carol Richelau, and I've probably said that wrong, who is the senior condominium specialist for the real estate branch at... At the DCCA. At the DCCA. Department of Commerce and Consumer Affairs. State of Hawaii. And yes, I knew I was gonna get it wrong, but your last name is said... Richelau. Richelau, okay, and I said Richelau, I believe. You were close, thank you. I was close enough for government work. No. Oh. Well, I'm really excited about having Carol as my guest today because a lot of people, particularly condo boards, condo owners are not aware of what the condominium division does at the DCCA. And so I thought this was a perfect opportunity for somebody from there and the senior specialist, as a matter of fact, to explain to us what the condominium division is. Well, thank you, Scott. We really appreciate being invited today and being able to share the information. The real estate branch has two sections. One is basically the real estate licensing, your agents and your brokers. And then our section, which is the condominium branch. And we're basically charged with the enforcement of certain statutes. Those being Hawaii Revised Statute 514A and 514B, as well as the Hawaii Administrative Rules. Now, 514A applies to condominiums that were built before July 1st, 2006. 514B applies to condominiums built thereafter, as well as controls the governance. And the Hawaii Administrative Rules are basically meant for 514A condo projects. However, there is a really good section in there on reserves and how to handle reserves. So it's all the different requirements in there. So it's a good section to keep in mind for boards. It's interesting you bring up the fact of 514A and 514B in that 514A is prior to 2006 when they recodified the law. But just recently at the legislature this year, there was a bill that was passed. I don't know if the governor signed it yet or not. No, he's not. That will basically do away with 514A in about two years. Yes, yes, that is true. And we are keeping a close eye on it because we will have to do a major outreach effort to those folks that have condominiums that were under 514A. Fortunately, there is a safe harbor provision in the bill and we've already worked out how to handle this, but it's something that all developers, attorneys, owners of older condominiums and associations should be aware of, but we have planned a big outreach program in the event that the governor signs the bill. Okay, so you don't know if that's shown up on his veto list or it's just gonna be one of those that he'll either sign or just pass into law without his signature? I personally do not know. I know that I do check the status of it constantly. I don't doubt that. So as the real estate condominium division, you're also involved with the real estate commission in itself as well, right? Yes, yes, we are part of the real estate commission. They are a nine-member commission nominated by the governor and confirmed by the legislature, and at least two members represent the public and there are members from the other islands, as you were once upon a time our big island commissioner. Yes, I remember those days. So one of the reasons I wanted you on this program is so that you could explain some of the services that people might not be aware of that the condominium division branch offers to owners and board members and things like that. Yes, we have a condominium education trust fund which finances a lot of our programs and we have basically three main things that we do. One is the education and offer resources. We have seminars. We subsidize seminars at the moment the vendor is the Condominium Association Institute, at least nine of those a year, not only on Oahu, but where there is interest, we will go to any of the other islands and those are subsidized for condominium associations that are registered with the real estate commission. We also have online videos. We've done videos on pets and we've done videos on, it's your favorite topic. I do share a duty and we also recently did a free program for owners at the state capitol called Condorama and we also have that available online. In addition, we do quarterly bulletins which are published online of areas of interest for owners and boards and we also have an email subscription service which is kind of an update on the latest in educational opportunities or any changes in the law or events that also is available and we also are concentrating on outreach now. So we've been going to consumer fairs. We've been, you know, we've done it downtown, we've done Kapolei, we're doing one up in Windward and we're interested in doing more of the Condorama type things. Wonderful. In addition, we have a lot of publications. We have many, many brochures available online. They're for both owners and for boards. We have ones on aging, business judgment rule. We have ones on whether you even want to be a condominium. We have ones on whether you want to buy a condominium. We have ones about aging in place that are in there. Common issues, we have financial issues, all kinds of material available there as well as guides for both owners and board members. It's all available online. Not only is it available online but if you happen to go to where the office is located, did they have most of those brochures right there available as well when you first come in the board? Oh, absolutely. And when we redo their outreach, I come loaded with the box. It's like 20 or 30 different types of brochures in order to so the public can have that information. And also online, we also have FAQs. There are certain questions that are commonly asked over and over. So I think anyone that is interested in this area should look at the FAQs. I mean, one of the common ones is, well, I'm upset with the board. They painted the building green. And I don't want to pay my maintenance fee. Do I have to pay my maintenance fee? Basically, yes. Or the board asks, well, do we have to put up notices for our board meetings, for our association meetings? That's a common question. And the answer, of course, is yes to that. And other ones that come up or say, well, can the board just increase my maintenance fees? How can they do that? So there's a lot of FAQs there that I think will answer a lot of people's questions. Well, one of the things as a real estate instructor, like I do, is I often get asked, how does the real estate commission subsidize or the condominium division subsidize these seminars? And I point out to them, number one, when you get that CAI seminar flyer, usually in small print on there, it says partially subsidized by the condominium education fund. But people don't understand where that money comes from. Yeah, those are mandatory fees charged at the time of development, which we hadn't even talked about yet, as well as for associations to subsidize. It's really a minimal fee, very not painful. But it subsidizes all these educational outreach efforts that we like to make. And I remember you pointing out that a lot of the CAI Community Association Institute seminars are here on Oahu. Yes. But from time to time, they do have them on the neighbor islands. Absolutely. We'd love more participation on the neighbor islands. That's what I was going to say, is if you don't see them on the neighbor islands, that's usually because they haven't got enough signups. Right. We attempted to do two recently, but unfortunately, I guess you could say that the preregistrations were somewhat dismal, especially as far as even owners signing up. And so we really encourage people to do that. In addition, the real estate commission yearly meets on each island. Like our next meeting will be in Kona next week. And both a real estate specialist and a condominium specialist will be available at the meeting in order to assist anyone if they have questions regarding the statutes. And as a former commissioner, I remember those meetings very well, that you would have people on the neighbor islands show up for those commission meetings, not to hear what the commissioners have to say or do, but to meet with the condominium specialist afterwards because they may be having certain issues at their condo that they want to discuss. So it's an excellent opportunity when we're on neighbor islands. Right. And of course, we do have an email, which is hyrec-h-i-r-e-c at d-c-c-a dot hawaii dot gov. If anyone wants to email us questions. And in addition, we do have a condominium hotline, which is available, which is 808-586-2644. So we have the website. We have the email. We try to go in person of a lot of different places. And we also have the condo hotline. So all those are available for us to be able to assist people. Well, and I can appreciate that because having been a commissioner, being an educator, one of the things that I feel is important is for condo owners and board members to realize that there is a governmental body out there that can help you with this information. Right. The statute sets out each owner, each board member, which is who is also an owner, have various rights and responsibilities. And it behooves being able to live together in that kind of an association area to be familiar with what are the parameters? What are my responsibilities? Now, before we get into the issues of registration and developers' public reports, can you tell me offhand about how many people you have working in that department answering phone calls and things like that? Let me see. Answering phone calls, including for the developers' public reports and things, we have about six. But that's including association registration, developers' public reports, as well as most of the calls we get are either governance issues or the public reports. Oh, that's what I was going to ask. Do you feel or see a common phone call that you would normally get at the condominium division? I think the calls rather relate to people being unfamiliar with the basic statutes and being unfamiliar with even what is a condominium because people get very confused. They see an apartment or a unit, and they automatically assume it is a condominium. And a condominium is not a structure. It's a form of ownership, but it's not a structure. And so people can be perhaps by a single family dwelling and realize they have bought a condominium if they have been properly prepared by their real estate agent. So I think once sometimes it takes many questions to figure out how we can help this person because we do have limited jurisdiction, which would be to those that are condominiums. But there are many other types of ownership. Well, speaking of limited jurisdictions, that's actually a good point that you brought up because you have pointed out that you're charged with the enforcement of 514A, 514B, and some of the administrative rules. Some people do not realize this, and I'm actually having a little training session for my office on it tomorrow, that you're not involved in 421J, which is the Homeowners Association statute. Yeah, they are separate laws that govern community plan community associations. There are separate laws that cover subdivisions. There are separate laws that cover timeshare and the other issues, co-ops, all of those. Those are not condominiums. And so there are separate laws that covers those types of things. And those are not particularly under your jurisdiction. No, they are not under our jurisdiction. So we try to assist people and try to figure out what form of ownership they have, and possibly we can refer them to the appropriate statute. But it is not in our jurisdiction. Well, that's good to know. So maybe those phone calls won't come in. But like you said, you will try to assist and send them in the right direction. Yeah, and a lot of times, I think, people don't understand the difference between what is in the jurisdiction of the county. There are many areas that are strictly in the jurisdiction of the county. So they call up and say, well, my house is here. Can I build a two-story house? Or how many units can I have here? Or can I own a cow? We have things like that. That would be county, your zoning, your land use, your permitting, all of those kinds of issues. Building, that would be under the respective counties, and each county is different. So each county does have their own office for permitting, zoning, and those kinds of issues. Okay, well, we have Carol from the Condominium Division of the Real Estate Commission with us, but right now we're just gonna take a quick break. And we'll come back, we'll continue on with more questions. Thank you. Broadcast on cable OC16 and O'Lello 54. Great content for Hawaii from Think Tank. Some say scuba divers are the poor man's astronaut. At DiveHeart, we believe that to be true. We say, forget the moon. DiveHeart can help children, adults, and veterans of all abilities escape gravity right here on earth. Search DiveHeart.org and imagine the possibilities in your life. Welcome back to the Condo Insider. I'm your host, Scott Shirley, and we're continuing on with our discussion with Carol Richelieu. Did I say it right that time? Yes, you did. Thank you, Scott. I'm getting better. Who is the Senior Condominium Specialist at the Real Estate Branch of the Department of Commerce and Consumer Affairs. So moving on, there's another area of the Condominium Division that some people probably aren't aware of. Most realtors are because it was part of the mandatory continuing education in 2015 and 16, which was all about condominiums, how they're created, the process, and things like that. So that's also one of your areas. Yes, yes. It's also within our jurisdiction, frankly, prior to, although I've been in condominium governance for decades, I was not aware of another very important role that the Real Estate Branch does, and that's with what they call Developers Public Reports. These are basically disclosures that a developer is required by law to make and to file with the commission, thereafter an independent consultant reviews it, to ensure that enough information is disclosed to the public so that the first-time buyer of that condominium will know exactly what they are buying and that there isn't something hidden on page 47, line six. So it's a very important role. The developer cannot sell a single unit until such time as the Real Estate Commission issues an effective date on that public report. I remember that was one of the stressing points in what we called Core A in 2015 is the fact that you cannot sell anything until you got that effective date on that public report. Exactly. What I find interesting, and of course, it lines back up with the doing away with 514A eventually in a couple years is I actually had a student and Kona come up to me and say I have a client who developed a four-unit condominium and never sold any of them. And now because of his age and he's thinking the state planning and his children, he's now thinking maybe I should sell these now. Problem is, is he built them in the 80s. So he is under 514A, which actually had the public report actually expires. 514B, it's evergreen until that last unit is sold. Right, I must have gotten it on expiring, but it probably didn't. They probably didn't. So my comment to the realtor was, well, he needs to determine does he wanna go back basically and start from square one because it's been so long or does he wanna leave it as a problem for his heirs to take care of? Well, when I talked to him again, I asked him, did your client decide? And he says, yes, he's gonna leave it for his heirs to deal with. Oh, why? Yeah. Which in my opinion is probably the right thing to do. Yeah, but then again, if that bill gets signed into law, everyone, but I mean, there's a leeway there in time, but everybody's going to have to seriously think about the transition, but there is a transition class. One of the other things that was very much stressed in those continuing education classes was that the real estate commission condominium division or the commission as a whole does not approve the project to be built. No, absolutely not. Again, we were talking about those other government agencies, they're the ones that handle how tall can it be, what kind of a setback? You know, all of those, how construction, all of that is there. Basically, it's not an approval. It's effective data is given when it's decided that there's been sufficient disclosure made, good, bad, or ugly about what, about that condominium. And so I think people might relate to it in that we have the abundance of construction right now down in the Co. Co. era, so every one of those developments has one of these public reports. And if people are interested in reading them, of course obviously any buyer would have one in their hands given to them by their real estate person, but they are available online at our website. So you can read all these public reports if you are so inclined. If you're so inclined, yes. Well, you know, and one of the other interesting aspects of that is the statute also requires that when these brand new units are offered for sale, the first 30 days, 50% of them must be offered to an owner-occupant. Right, right. And we've had issues pop up at the real estate commission where an owner-occupant affidavit was signed that they are going to owner-occupy and then they didn't. Exactly. So that raises a lot of red flags as well. Right. But I always thought it humorous when I'd pick up the paper and see a full page add for one of these coca-occo ones that says that they're offering them the first time home buyer or the owner-occupant. And the studio is starting at 1.2 million and I'm thinking to myself, yeah, they're lined up down the street for those owner-occupant ones. Yeah. Well, if someone needs that form, it's available online if someone, and part of the law does allow for certain exceptions. If something untoward happens, perhaps a military transfer or a bad change in circumstances, health issues and things. So the law is not entirely rigid that people are sometimes able to get a waiver, but it has to be decided by our office. But there is a form online if people have something like that happen that they can ask to get out of it. And I think what's important about that too is the statute doesn't say there are exceptions for this, this or this because everybody's situation is gonna be different. So it becomes a, for extenuating circumstances, so to speak. So to speak, yeah. Yeah. Hardships and, yeah. Exactly. If I'm in the military, I'm getting transferred. Yeah. Right. And yeah, I can't occupy it. So... We also do the registration too for the associations themselves. That's right, yes. Yeah. And right now, it's actually, we're just entered a period of the next biennial. So we've already had, let's see, over 1,300 associations registered as far as we know. So that stands for about over 128,000 units. Have registered. And in addition, I would like to let people know if you want to see, the new ones will be available online. We haven't gotten it up there, but again, this information is available online. So if you are entirely mystified by who your board president is, you can go to our website and you can look it up at the registration of the association. And that's another interesting aspect is, every two years is registration of the condo. What condos don't have to register? Your ones that opted out, the little guys. Yes. Because I often have that question and it's usually the one or two. Yeah. Well, I can't imagine a one unit condo, but it probably doesn't exist. Because there isn't such a thing. You have to have two. You have to have two, because it's the only. And the other aspect of that too is a lot of people like you had mentioned that they could, looks like a single family home, but it's actually a condo. Right. And what we, I like to remind people is you can pretty much condominiumize just about anything. Yes. Including shops, stores. There's, there are commercial condominiums. There's now storage being done. Yes, there is. And there's also mixed use where you have perhaps downstairs and first floor offices, downstairs shops, restaurants and then the rest is a condominium. And I think some people get confused too, even by, again, don't judge by the shape of the building. Like townhouses. Exactly. A townhouse could be a condominium, but not necessarily a condominium. So don't judge it by the structure. Well, and speaking to that, I actually had a student a couple years ago tell me and I am surprised I hadn't thought of it myself. They actually got about halfway through and for whatever reason they didn't finish up on it. They were actually going to condominiumize boat slips. That's interesting. I've heard of parking. Parking spaces. Yeah, parking spaces. And to me that actually made a lot of sense. I don't know why they didn't follow it through, but we're seeing different aspects. I had predicted 10 years ago that somebody was going to condominiumize your storage spaces. And now it's happening. Yeah. And if that turns out to be successful, you will probably see that further down the road. So instead of paying rent to store the stuff that you visit once or twice a year, you can own the space that you're visiting once or twice a year to see your stuff. Right. When you're a little sidewalk would be your common area. Who's going to maintain the plant? That's going to be a fun one to work with when it does come around. Yeah, yeah. So what other services are available out there? Well, in addition on our website too, we try to put some links on to the important, other important resources, such as the Bureau of Conviances. There's a lot of people don't understand, especially if they're pros and try to do it themselves, like how to form a condo. I mean, it's in the law basically, but you file with the Bureau of Conviances, your declaration, your bylaws and your condominium map and poof you have a condo. But for documents like that, the correct depository is the Bureau of Conviances. So if people are doing research for those kinds of things, because what they may have filed with the real estate branch may have changed. So it's what is filed with the Bureau of Conviances. So we try to provide links to that. In addition, our office doesn't have enforcement power per se, but the regulated industry's complaints office does over some of our statutes. So if there is a complaint, and they have a form online for that, about a real estate agent or broker or certain of the condominium rules, usually it's documents, the failure to produce documents, then people can file complaints with what we call RICO and in order to enforce the law. Well, we're actually, you didn't think we'd have enough to talk about for half an hour, we're actually just about out of time. Oh my. So what I'm gonna suggest is one of these days we will bring you back so we can talk about mediation and arbitration, which is another big issue within the condominium. It is, it is. Industry and the different types of availability that there is out there. Myself, Richard Emory, we're firm believers in mediation. So that'll be a good topic for us to do on another episode. So, but again, I just can't tell you how happy I am to have you here today. Oh, I'm pleased to have been your first guest. It was very kind of you. Baptism by fire, we call this. And not only having you as a first guest, but also making it, my big issue is to make sure that people understand where they can get information, where it's available to them. And we have a condominium division at the real estate branch. That's what it's there for, can be utilized. And it surprises me even to this day how many people don't even realize that's available to them. So I wanna make sure that information, just like you get to say. We appreciate it. Yeah, we really appreciate it. We appreciate the opportunity to let folks know what's available. So I believe we are, if we're not out of time exactly, we're just about out of time. So again, I'd like to thank my guest, Carol Rishla, Rishla. One of these days I'll say it right, or just call you Carol R. That just makes perfect. Who is our senior condominium specialist for the state of Hawaii, real estate branch, condominium division at the Department of Commerce and Consumer Affairs. It's been my pleasure bringing you the program today. I'm sure you're happy to see me rather than Richard Emory, but that's another issue on its own. So again, thank you for being here at Condo Insider and thank you everybody for participating and helping this day. And thank you Carol and hope to have you back again someday.