 Good afternoon and thank you for joining us for another session of Kondo Insider. My name is Jane Sugimura and I am your host today and today and this is a show for people who live in condos and work in condos or have anything to do with condos and today we're going to be talking about some new legislation that became effective two weeks ago and I have as my guest my very good friend Richard Port who has been a long time advocate for condo owners and he's had over 20 years of experience of being a board member in a high-rise condominium and as an advocate he's been beating and knocking on doors at the legislature for over 20 years haven't we? I think I started actually back in the 1980s so that's what going into the fourth decade almost I guess. Oh my god that's really amazing. And you know when I first got started first of all I thank you for the invitation but when I first got involved it was primarily to try to provide information for owners as to what their boards were doing and making sure that they had the information that they needed to determine whether boards were doing a good job and we did a lot of good legislation over the years to you know provide them with minutes and financial statements even contract signed contracts so things like that so that they would be able to be prepared we even got them a permission to get owners lists so that they could write to owners if they had a saw that the board had a problem but more recently we're looking at the board interactions among themselves and so that brings us up to this kind of legislation. Right and what we're going to be talking about is Act 196 and that was House Bill 1874 that passed out of the legislature in the 2018 session but it became effective on January 2nd 2019 which was only two weeks ago and so and this legislation deals with mediation and arbitration and we already have those provisions in the condo statute and and you had a personal stake in the outcome of this legislation why were you so involved in this. Well a little bit more background initially we wanted to make sure that owners if they did have a gripe or a problem that they could get mediation instead of having to go takes things to court because court is expensive so we wanted to be able to allow owners to mediate disputes and initially we thought well that's that's really a good way to go because boards would certainly not want to spend a lot of money in court and so we had the mediation statute and then subsequently mediation or arbitration and that seemed to work up to a point but gradually what we found was that boards sometimes found it more advantageous to string out the mediation or the arbitration and that did not work too well for the individual owners who had problems so more recently we've had cases where there might be let's say a minority member or members of a board so you might have a nine member board it might be two or three members that are on the minority and that they somehow feel the board is not doing what it's supposed to do not generally speaking you know majorities rule and you expect that the decision of the majority will be the effective for the entire condominium but on occasion you get a dispute where maybe there's actually a good issue maybe there's something that they feel I'm not saying always but that they feel is actually being done that might be illegal and so the problem became that the earliest statute only was only clear as it related to owners and board owners and boards and and I think the thinking early on was well board members are owners and therefore they should be able to mediate and it was the string out that became a real problem and you know with with boards I mean they even though you know there's you know and and I guess you know the dynamics is most boards are pretty congenial and they can work things out but you know you're entitled to disagree right you can you mean in fact you have an obligation to disagree if you feel strongly right that you know the facts that are presented to you as a board member you know don't support the decision of the majority and so even if you disagree and you go on record as you know the minority position I mean that's something that you can do and you're allowed to do right and in fact usually a board member will be satisfied by simply voting no on a particular issue but and that and so that most of the time everything works out but as I've said to many a board member you know on occasion there's something that not only you don't like but may in fact be against the BIO laws or the declaration or whatever and and that dispute needs to be resolved if it's serious and in fact you did have a dispute with your board and you made a demand for mediation and and in fact that's what they they they did they basically said well you know statue doesn't apply to you yeah because in fact they said fine just vote no but don't tell the owners about the problem and so it actually became a kind of internal dispute not only between the board but between owners and the board and in this case act 196 there's a section on mediation there's a section on arbitration the part that deals with mediation it expanded the people who could participate in mediation and and how how did how did that affect you well the the good news of the first of all let's take the bad news was that stringing something out but not only just for me but for any owner or board member is is costly and also it doesn't resolve anything that in fact the it's like you know a scab that keeps getting worse and worse and so this new bill will be very helpful because it and you can explain it to better than I can actually but basically we won't have to wait and let the the board keep stringing out mediation or arbitration because it doesn't going to be assumed that the answer is they don't want to mediate or arbitrate if it gets strung out right and you know and the thing of it is you keep saying stringing out so it's like well you make a demand and by stringing out you're saying well what happens is the in in case you're in in your case I think that demand was free value of mediation right and there's two kinds of mediation well let's tell our listeners you know what they what it is there's facilitative mediation and there's a value of mediation right and facilitative mediation basically means that you have a trained neutral a mediator who tries to you know persuade the parties to come together and and resolve their differences their dispute whereas a an evaluative mediation you have a neutral who is trained in condo law and basically tells people hey you got a bad case or you have a good case and you know and and and also gives you a written opinion you know as to the the strengths and weaknesses of your position and so that means that if you go through a negative mediation and you don't get it resolved you have a piece of paper that tells you whether you've got a good case or a bad case and if you do go on to litigation I mean and with a bad case you could get hit with a lot of attorneys if you lose right and so that's the that's part of the the the wonderful part of it is that that an owner or a board member who's disputing and finds out that this independent evaluator is saying you don't have a good case you better drop the case right and and in some cases the the independent mediator is a retired judge yeah and that's good and that's that's good and and another good thing about evaluative mediation which is the reason you use it is it's subsidized by the state of Hawaii right in other words you're not paying for the mediator and for the retired judges their hourly rate is four hundred dollars an hour and so if you take evaluative mediation then that means that you're not paying you you only paying for the first hour right and the state of Hawaii picks up the balance of the cost and we ought to explain to the viewers that that money that's used for this purpose is money that owners pay into a fund that the commerce and consumer protection the real estate commission basically handles that those funds and it's been going off for 20 years and when it first started you and I opposed it because we said hey this is just another tax on condominiums and when it started over 20 years ago it was a dollar and a quarter right every other year and and I think now isn't it three is a three no as of 2017 it was ten dollars per unit ten dollars per unit so you do the math there's millions of dollars that the state of Hawaii is collecting so you know and and one of the purposes for the other condo and fund is to provide uh uh programs that that will uh facilitate the resolution of dispute between parties in a condominium yes and uh and and so so so by doing this uh you know by having these funds available that means people can do evaluative mediation either with uh with with different organizations that contract with the real estate commission and one of them is the mediation center of the pacific right and the other one is dispute resolution uh dispute prevention resolution that has to retire judges and there are a number of private mediator slash attorneys right who have been trained and have the the expertise in condo law who will do the uh evaluation and and really you went through the process so it's really easy right you pick up the phone and we we call dpr and and they handle it right you tell them who the association is on the other side and they start trying to schedule it and that's where they were where you that's where we got into a problem right because they your your board came back and said oh no uh we don't want to do that as mediation we want to do facilitative mediation and they got away with that right and and so we were at a stalemate that's right and how long did the stalemate last well i think we started actually in may of 2016 and it didn't get involved uh recent uh in didn't get settled until was it december of uh 17 so it was it was over a year yeah oh well over a year over a year yeah and and and and the funny thing about it is in and and and it's and this statute right this statute also has a provision act 196 has a provision that says if you ask for mediation and the other side doesn't respond and the statute says the current statue says thou shout meeting right shall right shall means mandatory doesn't mean six months from now doesn't mean a year from now it means you will do it now yeah right by the way i had the wrong year i think it was 2015 we started and we didn't get resolved until late 2017 yeah so it was it was almost two years long time and and so if this law had been in effect you could have filed the motion to compel and gotten your attorney's fees and but anyway right now uh it's time to take a break so we're going to take a break for uh a minute and then we're going to come back and we're going to tell tell the audience how you finally got to mediation okay good good all right this is stink tech Hawaii 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that we can resolve okay okay we're back with my guest uh richard port who is a condo advocate thank you richard for being on our program and i've asked him to share his experience uh which had to do and and his experience with his board where he had a dispute and he demanded mediation under the statute and what his board did was you know string them along and stonewall him and so now we have a statute that went into effect two weeks ago and i guess we have your condominium to thank for some of the provisions in that in that the law because now the things that uh that uh that are in the law are going to help other people whose boards will will not uh mediate with them right now they can um demand mediation go to court and get their attorney's fees yeah and their court costs uh reimburse and it's a maximum of fifteen hundred dollars which should be sufficient for them to follow one petition one court hearing and have it all resolved and so what what happened exactly how how did how did your case get to mediation well just let me first just get a reminder of where we've come during this whole thirty forty years early on uh people would say oh but that's just your condominium or that condominium because i would get calls from other condominiums and they would say oh but that's only one condominium that has a problem but sooner or later you begin to find that uh of what impacts one does in fact eventually impact other condominiums but anyway back to our legislation uh it took us uh all the time that i mentioned just before the break to uh be even able to sit down with a mediator and you've already pointed out it was not it was facilitative not evaluative and uh basically there was a settlement but it really was um it was the best we were going to be able to do under that particular situation in the future any of these kind of disputes will be able to go through an evaluative uh mediation in which each side will get uh a paper may not be long but it'll be telling you what the strengths and weaknesses of your case and i i think that's uh uh very important but in your case in your case what happened is the association bought a petition that's true against you that's right he basically asked the circuit court to make a determination that your claim was not suitable and and and and and what happened in that case was the judge took a look at that petition took us back into back room and basically scolded scolded us like why are you wasting my time and and and then he ordered us into mediation yes he ordered us he ordered us to go into mediation and and that's how we got there i mean that's the long way around but you know we we finally got into mediation and it was because you know the judge you know basically said you know why are you guys wasting my time the statue says thou shalt mediate so here it is and he he read the paperwork and he says how come you've been fighting for over almost two years and you found this petition which is a waste of my time to read and as a matter of fact the courts really do not like condo cases no they hate them they would prefer much prefer that these go and be settled in mediation or if necessary in arbitration right and the i you know when we first set it up too we when we first set up the statue we set up the statue so that if you don't follow the steps in other words you go and you demand mediation and if you don't get mediation then you can do arbitration right and if you don't follow the steps and you go right into litigation then the judge can say hey i'm not going to award you your attorney's fees yeah right because you didn't follow the process right and the process is set up so that you don't have lawsuits you don't have these condo lawsuits right because the judges just hate them and we've had a few over the years over the decades that really ended up being very expensive for the association and for the owner and and frankly uh if it weren't for the fact that some of these owners who have gone all the way through the process had deep pockets they had lots of money uh they you know and ultimately some of these go into hundreds of thousands of dollars which is ridiculous and and and basically and when there's a lawsuit the the association turns it over to its carrier right and that and then the carrier has to defend whether the association is right or wrong they have to defend and in some cases in fact it seems like in most cases they end up paying these humongous judgments right and then it affects the future uh charges for insurance right as well for the association and now it seems like it's affecting everybody in the state right because of the lawsuits and i was at a at a at a at a um uh a seminar where Sue Savio you know who is head of a insurance association right she told us that hawaii has the most claims of any little hawaii yeah as as you know versus all of the 50 states in the whole united states right we have the most claims yeah against d and o policies and that the carriers are leaving the state so we're now down to two or three and so the risk pool that your your condominium might we're all in the same risk pool so if there's this so if the people read about a lawsuit where a condominium gets sued and they and the owners win a judgment of three million dollars guess who pays for that i'm beginning to see that attorneys who previously would have who represent the board associations and boards that normally they would they would carry these situations and go through the legal process but now it seems like they're trying to avoid some of these lawsuits and and that's a good thing yeah it's a good thing because these the mediation and now and and part of this act 196 if you can't resolve your dispute in evaluated mediation right now this bill says you can do voluntary binding arbitration how is that different from the arbitration that we have now well by by having binding arbitration it it will mean that there will be a resolution to to the issue because right now the way the statute is written the under the arbitration statute it's non-binding yeah it's non-binding and if you if you win then the losing party can't appeal yeah and then you start all over again yeah because there's something called a de novo review yeah you might want to mention what that is so de novo review means that you went through that you go through the arbitration process which is like a mini trial because the arbitrator basically has his hearing and he listens to witnesses and looks at at evidence and makes a decision and and and the person the losing party has a right to appeal it and if they appeal it a de novo review means that when it goes up on appeal they start from scratch you start all over again the decision gets thrown out and the circuit court basically has to go through the you repeat the process and that's why a lot of people don't go through the the old arbitration the the the existing arbitration that's in the statute but now with act 196 you have you can the parties can agree to enter into binding arbitration and i'm told that some of the carriers aren't happy about this you know because you know because they might have to ensure you know but you know to me that's a different issue the good thing about this type of me a non-binding arbitration is that it's subsidized by the conduit hunt right and owners should feel ready to contact the condominium the condominium specialist and for that matter the best person to contact is jane sui mora uh to to at least get a reading a general reading of whether there's a there's a problem or not a problem right and you know they can call the condo specialist and and or they could go on the website the real estate commission has got a terrific website and all they have to do is put hawaii real estate commission in the google search right that will take them directly to the hawaii the dcca real estate commission they have a terrific website and they have a whole page on i mean a whole section on dispute resolution and and they will tell you how to do the evative mediation and this is an evative media and now we've got non-binding arbitration both of these programs are subsidized by the condo ed fund that everybody pays into anyway i mean every they're paying into it whether or not you have a claim i hope that owners know that you are the president of the hawaii condominium co-op association right and uh that uh you know i'm sure i mean you don't want a hundred people calling you but if there's a real issue they can contact you and um and see if you can help them right and you know and and and mediating a dispute is a quick it's quick it's cheap now it's cheap because now now it's subsidized by the condo ed fund right the mediators are subsidized uh and and you know um and and it doesn't take long it just means you know you pick up the phone and you call the mediation center of the pacific or dpr or one of the the professionals who do this i mean they have websites all over the place and if you go to this the real estate commission website they have a list of people who do this or they can call the condo specialists at the dcca and find out from them and you know all this stuff is free free information it's not like you have to hire an attorney to get this information and so that's what and and you know somebody told me and i don't know whether it was you in a recent email that there were only 28 oh no it was it was the senator who told me that there were only 28 cases last year that went through the bad of the mediation program and i don't know whether that means we're not there's not as many disputes and maybe people and that's that's a good thing if there's not a whole 28 is a good number actually but but you know the the fact that we still have lawsuits means that you know there are disputes out there and we got to get the message out that they need to go through they have to look at mediation and non-binding arbitration as an alternative to sue it it's cheaper it's faster and you know um and it doesn't and it won't affect your association's insurance premium one of the other issues we should look at in the future is let's suppose again we're talking about a board you're a board member and the majority is not listening to you and has decided that you are you should be excluded from committee meetings or other kinds of meetings where association matters are being discussed that's an issue we ought to look at in the future because that's not fair and it's not right if association monies are involved any board member ought to be able to attend such a meeting yes that's true and so that that that is something we we can look at in the future and you know one other thing that we want to impress on our listeners and our viewers is that any citizen can make change just like you right yeah absolutely you learned who your your legislators were and you went down to the legislature made friends with them and and you've been able to change the law right and and so if if richard can do it and i can do it anybody can do it yeah and and and these are your elected officials and so you know this is something you might want to consider go on to this uh state of hawaii legislature website find out who your legislators are and become their really good friends and that way whenever you have a problem maybe not relating to condos but you know any problem where a state agency or department is involved you call your legislator and you grumble to them and let them try to help you and we run out of time and so i thank you very much for being with us i'm happy to have been here and and and join us next week for another episode of condo insider on thursday at three o'clock uh and and thank you for joining us today aloha