 I will be your co-host today, along with a lovely Christa Stadler, of whom many of you are familiar with. She's the broker in charge for AA Oceanfront, rentals and sales. I'm excited for the show today. Christa and I will be collectively discussing various show topics scheduled to air in 2020. As such, we're going to do something a little different. We thought this would be the perfect time to engage the audience to understand what topics you would like to see or if you have special questions, you would like us to address on the show. We will provide an email address on the screen for you to contact us regarding future shows and inquiries. So with that, let's jump right in. Hi Christa. Hey Cheryl. So good to see you today. How are you? I'm good. I'm going to jump right in and just share with our audience a little bit about our discussions. Our discussion with the other hosts and who's going to be kind of focusing on what throughout the year. I know you and I have a little bit more detail to present, but I'm sure Richard and Jane will discuss that during their episodes. So one of the things was the email account, which we're really excited about. We would love to hear from you. Love to get your positive feedback. Any suggestions, you know, constructive criticisms, great. And any guests that you would like to see like specific people would be of interest to us as well. But I wanted to share with the audience a little bit about what we're focusing on. So I'm going to start with week one of any given month that is myself. And I'm going to be focusing on items related to condo management, condo ownership and rentals. So things that I can bring and educate people on that are kind of symbiotic with interest to all three of those audience members that would be watching the show. February 6 next week, I'm going to have Brandon Keenan with Atlas Insurance and he is going to be doing part two of condo homeowner insurance 101. March 5. Randy Traeger with Traeger Design is going to be talking about 2020 fire code changes. This is an extremely important show to watch if you're in a condo that is over eight floors and he's going to be going into it in some detail. It's very, very interesting. I saw a whole presentation that he did last week. It was very good. So second, I have someone scheduled but I'm not ready to announce their name because they're not 100% confirmed, but it's going to be regarding security systems, new functionality with security systems and their abilities and more. And then May 7 that we are planning to have someone from HUD and then I'm working on the rest of the year. So the second week of of the month is host Jane Sugimura attorney and she's going to be just focusing on case examples and outcomes and sharing different cases with you and what the results were. Plans to interview attorneys regarding some of these cases city council members and discuss education for board members which I know she's a huge advocate of and she's got some really exciting ideas about how to do that. The third week is Richard Emory. He's focusing on education and legislation and finally fourth week is our lovely Cheryl and she's going to discuss condo land condo land and I'm going to let you tell us what condo land means. Yeah, well, many of you may know that in condo land a lot of the projects if you will are cyclical. The first quarter of the shows that I'll be doing will focus on this time of year. We have annual meetings board start looking at the projects that they want to schedule after the annual meeting so they'll usefully have their annual meeting choose a brand new board of directors. The director will have a lot of work on their plate when it comes to deciding which capital projects to work on for the year. So without any specific order, depending on the feedback that we get from the ownership this month or next month I should say in February the fourth Thursday, we're going to have a parliamentarian on hand to kind of help you navigate some of the best practices when conducting your annual meeting. And then in March, depending on the feedback that we get from the ownership will probably do a show on either capital projects and or project management. When you typically determine which capital projects that you're going to work on for the year, then it's probably a good idea to engage a project manager to help you with whatever project you're going to work on for the year, especially when you're spending a lot of money. Most homeowners, they're just John and Jane Doe homeowner they're not construction experts, and you want to make sure you protect your fiduciary duty when it comes to managing projects. So I always recommend that you consider hiring a project manager. I'll have a project manager on the show. Can you give us some examples of what a capital project would look like what would a capital project be capital projects are anything that's outside of your standard operational expenses your operational expenses tend to be like your landscaping. Your staff and things of that nature capital projects are the big projects and can range from anything from painting the building to spalling a brand new elevator modernization things that are really big things that you had to plan for or you should have if you're, you know, on top of things for the past 20 years so you'll start with your reserve study and that's a projection. Typically out for the next 20 years and that's what you're going to use to determine how much money you're going to put aside every month to ensure that in any given year that a project comes due after the life cycle, you have the money. If you don't have the money. Yeah, yeah, so it's always a best practice to make sure you fund that reserve properly. If you don't. There are other options like loans and special assessments that you can also take advantage of and probably second quarter. I'll look at bringing someone on board that can speak to from from many of one of the banking institutions that can speak to the loan process and things like that. So if an association is going to reach out to a company regarding a loan, have you ever seen situations where they're not approved and if they aren't why. Yeah, yeah, it's not always a given that you're going to qualify for a loan. Like I said, you're typically we're talking, you know, thousands of dollars and the association needs to be kind of fiscally sound. There are instances where you there are requirements as it pertains to the owner occupancy. There may be requirements or I know there are requirements in terms of how much debt you have in terms of outstanding maintenance fees or your collections. So banks will look at things like that when they're determining whether or not you can even qualify for a loan. I have seen instances where they didn't qualify sadly. And what happens when they don't qualify is typically you have to do a special assessment. You know, I'm a little bit more naive when it comes to the association management side. My specialty is in long term and short term rental. So this whole loan versus special assessment is a little bit fascinating to me. Who decides who are the decision makers that decide they're going to go for a loan versus a special assessment from the very beginning before they even reach out to obtain the loan or is that always the first option? No, no. Typically, if you don't have the money, the board will have to solicit or pull the ownership, if you will. So they can't even go out and get a loan unless the ownership approves it. Of course, it's to their advantage to approve it because if they don't, then by default they're saying we don't want a loan. We want a special assessment. So there's a whole lengthy process when it comes to obtaining a loan for any capital projects. And that's why, you know, I'm going to make sure that we have someone on the show that can speak to that because... It will be interesting. I'll be watching that one for sure. Yeah. But I don't have to all of them yet. That one might work for sure. Yeah. Yeah. No, it's a good thing. But I always encourage boards and associations to just, at the end of the day, just fund your reserve. And then when you have a component, that's due. Like, let's say you're scheduled to repave the parking lot this month or this year, I should say, you have the money. That's always, you know, that's the best practice. But of course, that means typically every year you're probably raising your maintenance fees at least a little bit. At least the cost, you know, to adhere to the cost of living because let's face it, you live in paradise. Everything's going up and everything's expensive. So you really need to take an honest look at your financials when it's time to put together the budget for the next year and when it's time to fund your reserve study. Are your reserves? Yeah. Yeah. Yeah. So what's going to happen in quarter three? Quarter three. Let's see. Did I speak to two capital projects and things of that nature? Quarter three. I'll probably, depending on the feedback that we get, I'll have industry experts to come in and speak to whatever capital projects that receive the most feedback. So typically if you're a high rise, might be a good idea. You might be scheduled to do a modernization this year. And so I can invite one of the elevator modernization companies and or a consultant. Again, when you're spending a lot of money, you want a project manager to have eyes on that project because they're the ones that are most qualified to sign off on these projects. If you are a town home association, maybe you're scheduled to re-roof. So I'll also have a company, one of the roofing companies come in and or again, a project manager. Homeowner associations where it's just, you know, you're just paving the roads or signage or something like that or landscaping. You know, I'll just kind of look and see what kind of feedback we get in and then I'll reach out to the respective industry and just have someone come on and talk about, you know, how to manage those projects and or any new requirements in terms of permitting and things like that because the standards do change. Nothing stays the same. They do. Well, and this feeds into, you know, the show on that I'm doing on March 5th with Randy Trager about the fire code changes. I mean, whoever whoever is in the business of going in and putting in these sprinkler systems and whatnot in the high rises. They're going to be very busy and making a lot of money, apparently, but that's going to be something that they're going to have to factor into their capital improvements. Yeah, yeah, definitely. And think about, think about this, you know, you're planning 20 years ahead and of course it's changing along the way, but when some of these changes and ordinances come through. That's something that they're probably not prepared for, and they're only given Randy can talk much more about it, but they're only given, you know, maybe till 2024 to get the updates done. I believe that that's the data could be wrong, but it's not, it's not 10 or 15 years to get the updates. No, no, no, it's too critical. So well, that's a good place for a break. So please stay with us and Christa and I will be back in a moment. Aloha, I'm Lillian Cumick, host of Lillian's Vegan World, the show where we talk about veganism and the plant-based diet located in Honolulu, Hawaii. I'm a vegan chef and cooking instructor and I have lots of information to share with you about how awesome this plant-based diet is. So do tune in every second Thursday from 1 p.m. Aloha. Aloha, I'm Daelyn Yanagita, one of our hosts of our Business in Hawaii talk show on the Think Tech, Hawaii. The theme of Business in Hawaii is to share with you stories of local businesses by local people, and our guests share with us their journey to building a successful business right here at home. We are streamed live on Think Tech weekly at 2 p.m. on Thursdays. Thank you so much for watching our show. I am Daelyn Yanagita and we'll look forward to seeing you then. Thank you for returning and joining us on the show today where we're basically discussing the projects and the topics that you want to hear. So we definitely want to hear from you. Before the break, Christa was talking about the new laws and codes that are coming down the pike in terms of sprinkler systems and irrigations and things like that, which reminds me that probably May, June after the next session, I'm sure that Richard will schedule a show that will lend itself to talking about any new legislation that has come down the pike that affects our industry. It always does, and there are certain things that continually come up, so that will be a show where Jane or Richard will definitely update you. So you definitely want to tune in the second and third week, and I believe it's probably June. Probably June of the session is in May, and then they'll start putting out the updates in June. So stay tuned for that. It's going to be interesting to see what's going on in the world of legislation. Definitely. I know we're kind of in the third quarter of the things that you're going to be talking about. And, you know, in my position, I'm usually more focused on the inside of the properties, washers and dryers and cabinetry and whatnot, and from the association management standpoint, it's everything in the common areas and exterior. So when we get to the fourth quarter, we get into budgeting for the next year, and I know just being around it in the same office building with folks that handle association management, that just seems to be a extremely busy and huge process. Can you kind of tell us a little bit about how the association management works with the association on developing the budget and what steps are taken and who it goes to for approval? I'm just always very curious about that. That's a whole show. But, yeah, in a nutshell, and that's when the board is going to look at the operations and the capital projects expenditures for the past year, and they're going to compare that to future projections. Budgets, as we all know, are not an exact science. They're pretty much a guesstimate based on past behavior. But it can be pretty time consuming to extrapolate all the data, all the financial data from the past year or so, and put together projections for the next year to determine where those maintenance fees should land, which is never fun for anyone, because ideally, you know, we would like to keep maintenance fees right where they are. But that's not realistic ever. At least just cost of living. Is there, I'm asking you some questions that I've always wanted the answers to, is there a cap on the percentage or amount of an increase? I mean, if you've got a $500 maintenance fee, can they go ahead? Would they raise it to a $1,500 maintenance fee or does it have to be, is there a cap on it? And also, do they have to vote on that or who dictates what that's going to be? Good question. So, no, there's no cap. And the board dictates, you know, or they determine based on the data that's presented to them where that maintenance fee should land. They do have the authority to do that and given to them by the ownership when they voted in, the board of directors at the annual meeting, which typically happens around this time of year through March, April at the latest I've seen. Occasionally I see them in May. But yeah, that's a lot of work for the board of directors. They do it in conjunction with the manager. But nothing should be a surprise if the treasurer on the board is looking at the financials every month. They should get them every month, usually around the middle of the month. If they're taking a look then, you know, of course there are contingencies and emergencies that come up, but there should be no surprises. But I have seen increases in maintenance fees up to 100% or more, which just tells me that in the past they haven't really funded things properly, and they have no money. And so you get a solid board that wants to put, you know, wants to get the association on solid footing and unfortunately sometimes they really have to raise those maintenance fees to get them there. And it's never, never pretty. But that's why I say, once you've established a good solid budget and every month you're looking at those variances and there may be they're less than 10%. Then you're good. And then when it's time to do the budget, you know, you can make the adjustments there based on cost of living or any inflation or rate increases, I should say. Like every year, you know, the water and sewer is going to go up, you know, things like electricity, they're going to go up. So you have to plan for that and make sure you put them in the budget. You can't just use last year's budget. That's not fiscally, you know, responsible. So if you do that and you have a solid budget and you watch those variances and you make adjustments for them, you should never, ever have 100% increase in your maintenance fees. That's not a good sign. Well, I feel for people on fixed incomes, you know, even if they're even if they pay cash for their condo but I just really feel for them when it increases that much. Is are they are the budgets and those treasure reports available to all of the owners I would imagine they are. Sure, anything's you're an owner, anything is available to you, but I always advise owners, you know, there's typically a board meeting that happens anywhere from once a month to once a quarter. But when they do happen, it's it's good for owners to come out and take a look and ask questions because even if you get the financials unless you're savvy. You know, you could get the financials or the budget and they're just like Greek unless you're, you know, you have some financial savvy. And so it's a good time to just attend the board meeting, listen and ask questions. Boards have to give owners a platform to to ask questions and to participate. So that's the time to do it and it's it's always easy from a homeowner's point of view when you're not on the board to pass judgment in terms of the decisions that are make that are made. But once you get on the board, you start to realize, you know, there is a lot that goes into determining that maintenance fees, it's always frustrating when I hear where does our money go like what do you spend in the money on. And if you do a part pie chart of all of your expenses, you know, it becomes very, very clear, you know, where that money goes and why it's necessary. So it's a it's a necessary evil to maintain the property and and increase, you know, the property value and that that will lend itself to another topic I'll probably discuss will be how to interpret your governing documents, because you need to understand that when you buy into a owner's association, you need to understand those documents, you need to understand the dues and the don'ts and and why and things of that nature. And that lends itself to the house rules that everyone including tenants have to follow. But they're they're very necessary. So probably do a segment on governing documents and understanding governing documents, and we'll probably do a segment on with with the attorneys in terms of protecting the association from potential liability and things like that. So that boards don't get themselves into trouble. And I always tell boards, you know, CAI offers educational training a lot, and it's always a good, you know, it's always good to take advantage of those classes and HCCA and just kind of learn what you don't know. I know the DCCA is looking into ways of educating homeowners and board and board members so that they are. They understand, you know how to play the role of being a board member. Is there some discussion of them having to get a certification when they become a board member proving that they've, they've taken classes and understand or that's just an idea that I heard. It has come up. I'll let Richard talk about that. You know, you have proponents for and against because it's hard enough to get it's hard enough to get folks to volunteer right to get them to volunteer and say, Oh, by the way, before you volunteer, you have to go and get this certification. You know, we're talking families with lives, right? And let's face it, being on the board of directors, you know, the pay is low. Right. It's a volunteer position. I feel like though if it's disclosed up front, and it's really just a way for them to feel more confident about the role that they're about to take on if they've if they've had this education. I mean, it's really a benefit. Maybe that would be something that the association would pay for. They wouldn't have to necessarily pay for it out of their own pocket. That could be a way to encourage it, unless of course it's required. Yeah, well, no, I think it's great. You know, education is good, but paying for it. I mean, indirectly you're still paying for it because then that's something that has to be budgeted right on the operational side. But I think, yeah, to your point, it's it makes it a little bit easier if you know it's it's something that's built in and approved, you know, by the ownership. So it's always a good thing to I to consider I think it would be great if board members would take the time and if they were more educated on the do's and don'ts of being on a board. Just to stay out of trouble and to, you know, make sure that, you know, things are, they're adhering to best practices at least, but it's been something that continues to come up. And I'm sure it will continue to come up. So we'll see what happens and we'll let Richard and Jane, the experts kind of educate everybody on that topic. That's, yeah, that one's always fun. Yeah. Yeah, so. All right. Well, you're going to have to give me a nod when we're getting towards the end because I don't have any indication. Oh, that's right. Yep, we have about one minute to go. Okay. Well, I just wanted one more time just to get the word out. You know, we'd really love to hear from you. We'd like to find out what type of questions you might have and we'll get it to the correct party to answer those questions if we can't. Any particular guests you'd like to see us interview, whether that be from a particular, you know, area, you know, landscaping or any kind of area within the industry or a particular particular person in the industry or if you'd like to be on the show yourself and would like to talk to us about that. We'd love to hear from you and I'm going to ask that they put up our email address again condo insider hi at gmail.com. Thank you so much. Yeah. And I'm not sure how close we are to the very, very end but I will be here next Thursday with Brandon keen with Atlas insurance to talk about part two of condo. Homeowner insurance 101. Oh, that's a good one girl. Yeah, he was a great guest. Yeah, yeah, we did that one together. Yeah, we did. That was a that was a fun show. Tell Brandon hello, I will be watching. But we can at that we'll just wrap it up and let's look forward to a fun year and we hope to see all of you. Thank you for tuning in today. Aloha.