 Welcome to another episode of Kondo Insider. My name is Jane Sugimura and I'm going to be your host for this show. I'm doing a series of shows and this title of the series is Resources. What I hope to do during each of these Kondo Insider episodes is to talk about resources for Kondo owners, residents, and other people who work around Kondo associations. And today, my special guest is Lori Saiz and she's a Kondo specialist with the State of Hawaii Department of Commerce and Consumer Affairs, real estate branch. Hi, Lori. Thank you for being my guest today. You're welcome. Thank you for having me. Oh, you know, why don't we tell people? I mean, I mean, some people may not know how your department is involved in, you know, condominium associations. So, you know, how are they related? Okay. So, I mean, of course, under the Department of Commerce and Consumer Affairs, there are there are many divisions and the real estate branch falls under their professional and vocational licensing division. So, I'm in the branch and we are split into we have a real estate side and a condominium side and I am on the condominium side. And as you said, we deal with condominiums and condominium associations do register with the real estate branch and also just the condominium projects register with the branch. And you guys have a Kondo Ed fund that you administer, right? Yes. So, per statute, the associations pay into this condominium education trust fund and the monies from the fund are used for various things. For instance, for funding the condominium specialist positions. And there are four of us at the branch, two who deal with the projects and the developer side and two, which includes myself who deal on the governance side. So, and the fund of course also goes for things like mediation. So, it's education as well as mediation is something that the fund subsidizes as well. Okay, well, let's talk about the condominium specialist. So, tell our viewers what you do. Okay. So, basically, I mean, my primary role is education. So, whether it's people that are calling in with questions about their statute, the statute or they're just they live in a condo and there's some kind of problem. Usually people call us because there's a problem. They don't call us because everything is going well, right? So, they have questions, you know, maybe they want a certain document and they can't get it. They've requested it and they can't get it. So, you know, they'll ask, you know, am I entitled to it? You know, what should I do? That sort of thing. So, we try to educate so that, you know, they know what the statute allows. And we also try to get people familiar with, you know, living in a condo because most people buy a condominium, but they don't really know how it operates. You know, they're buying it, but they don't really understand the mechanics behind it. And, you know, you're given this huge stack of papers when you buy. But, you know, who really reads that, right? I mean, let's be honest. So, we kind of, you know, we're here to educate people because I guess the hope is if people know how a condominium functions and how it's supposed to operate, then, you know, if everybody's on the same page, hopefully there'll be better communication and less problems. At least that's, you know, that's the goal, right? Yeah. And you said that there are some of the two other condominium specialists that work with developers. Yes. They're on the developer on the project side. Right. And, you know, what I think a lot of our listeners don't understand or don't realize is condominiums are creatures of statute, right? They're created by Hawaii law. And so in order to create a condominium, a developer has to file some papers with your department. That's how they create a condominium. Let's say you've got this empty bare lot. It's just a square lot and somebody wants to build a condominium. And so that's usually the developer. So the developer will come and he'll provide you with something called a public report, right? Right. Sorry, go ahead. Well, I mean, you know, basically it's information, right? It's disclosures, it's information specifications about the project so that, you know, people know what they're buying. I think you could probably elaborate that even more on that than I can. But, you know, that's my basic understanding how I would basically, you know, it's a report with all kinds of information in it. Right. And if a developer was going to build a condominium, he would follow public reporting. He basically would say, okay, I've got this one acre square lot and I'm going to build three towers, three condominium towers. And I'm going to call it aloha condominiums. And there's going to be three towers and each tower is going to be 25 stories high. And each condo condominium is going to have 400 units. It's going to have this many one bedroom and this many two bedrooms. And, you know, we're going to have, and we're going to have amenities. We're going to have a swimming pool and we'll have a tennis court and we'll have all these, you know, we'll have a barbecue area and, you know, we'll have a dog park. And so the developer basically writes all this into a document called a public report. And he's also required to, you know, put in information about what's going to be in the declaration. And so this is a document that basically creates the condominium after he files with the state of Hawaii that he owns the land. Right. And he comes and he, and your department is the one who basically generally approves that condominium. He says, okay, we reviewed all the paperwork and you have like a checklist that the developer has to submit all this information to the state of Hawaii, right? And you just make sure that he's done that. And once the developer has done that, he gets permission to, okay, now you've, you know, your public report has been reviewed and approved and whatnot. So you can go out and start building your condominium and selling the right and doing things like that. Correct. And so, and, and, and, and, and after it's built, then, then the condominiums have to register with you. And so that you know, you have a list of all the condominiums in the state of Hawaii, because they do need to register with the, with your department. Right, right. So yes, we do have, I mean, you can search it if, if someone wanted to search it, you know, search the list of registered associations, that is on our website. So that is something that's searchable and you can find out that information. But yes, you're correct. Okay, and you know, and one of the things that you guys do, and I guess this is, and I got a call from a HOA that was developed under 421J, and they wanted to do a RICO, a RICO complaint. And they, you know, and they were told, oh, but, you know, you can't file a claim. And it's like, well, why can't we file a claim? And it's like, because you're not, you know, a regulated industry, like condominiums are, where condominiums can file for a RICO action, right? Because they're regulated by the DCCA. I mean, yes, there are, there are search and sections of the statute where someone can file a complaint with RICO. I think earlier I mentioned, you know, like, sometimes people will ask for records and they don't get them. So that's one area of the statute where you can file a complaint. You know, you requested a copy of the minutes or you requested a copy of the financial statements, whatever it is, and you didn't get it. You can file a complaint with RICO. But as you know, most of the statute is self-governing. It's, it's based on the philosophy of self-governance and self-enforcement. So normally when there is a problem or a disagreement, you know, the ways to resolve that are mediation arbitration or, you know, legal action. So it's not like RICO will take a complaint about anything, you know. And, and you mentioned before that, you know, the condominiums register with your department. And, you know, they, they also pay a registration fee that goes into the condominium education fund. And that we're getting, getting to your topic. But one of, one of the issues, one of the things that they, and, and, and, you know, I'm always so surprised when condo people don't know this, that they're paying every two years, every biannual. I told them, you know, I'm the board president of my condominium. I actually signed a check, you know, that goes to the, you know, state of Hawaii, you know, for the biannual registration. And I says, you know, so, you know, I'm sure somebody in your condominium is signing the check, you know, every, and they've been doing this now, it's got to be 30 years. They've been collecting the money and, and they've been, you know, putting it into a fund. It's a special fund. And they use it for special purposes. And one of the special purposes is education. And, and, and, and when I get questions, well, how come they're collecting it from us? And I says, well, many, many, many, many, many years ago, there was this huge fight. And that ended up in circuit court and all these judges got involved. And it costs the homeowners a whole lot of money for lawyers. And, you know, the, and, and, and in the end, the judge came down with a decision that the board had breaches fiduciary duty, and we had mass resignations all over, you know, from boards looking at, you know, reading the newspapers, oh, no, I don't want to get sued. And the state of Hawaii decided, hey, we're going to set up an, you know, we're going to set up money, and we're going to set it aside so that the, you know, we're going to have resources so that condo boards and owners can be educated on what their rights and obligations are. And we're going to make them resolve their lawsuits outside of a courtroom, because the courtroom takes too long. And, you know, people have to live in a building, they're going to end up killing each other. Right. All kinds of shenanigans went on. And that lawsuit went on for like six years, I think. And it was, it was really awful. And so that's how the condo ad fund was set up. And it was basically to require the state and CAI and my organization, Hawaii Council, you know, we set up, you know, educational seminars to train because we get, you know, the state does subsidize those seminars and partially subsidizes it because it, it promotes the goal of education. The whole purpose of this education thing is to tell condo owners and residents what their rights are and, and boards, what their rights and obligations are, and to provide a platform where they can resolve these disputes quickly, cheaply, right? Because for condos, that money that gets put into the condo ad fund subsidizes evaluted mediation and voluntary arbitration. Right. So that you go, if, if you get the other side to go into evaluted mediation, the state of Hawaii will basically write a check to the mediator, you know, for the media's professional time to try to get that resolved. And you might, and you know, to me, I think it's a wonderful, wonderful use of those funds because it keeps people out of the courtroom. And, and, and, and I, you know, I tell legislators basically that, you know, when we were testifying on those bills, that the judges hate these condominium cases. And I always get scolded. I says, you know, they, they, they tell me, Jane, how come these people are always fighting with each other? Why can't you guys get a look? I says, I don't know. That's a million dollar question. I mean, you have a thousand people living in a condominium. And, you know, they're, you're bound to get, you know, personalities that don't get along. And you know, you end up with disputes and it's really hard. It's really hard when you live in the same building or the same complex. And that's why it's so good that we have resources that will allow these people to resolve their disputes. But today we're going to be talking about another resource that that money is used to fund. And that's education. Right. Right. And so you have a, you guys have a wonderful website. And you know, anytime somebody asked me about a question, I said, you know what, there's a website on the DC and you go to the state of Hawaii and just put in real estate commission or real estate branch. And it will take you to this website. And it's the most amazing website. And you know, I've had people call me back and say, you know, Jane, that was really a great website. So how come people don't know about this? You guys should advertise a lot more. Yeah, that's really the million dollar question because unfortunately, like you say, we try to get the word out, you know, in various ways, but there still seems like there's a lot of people that don't know that our website exists. So yeah, it's it is unfortunate. But I'm glad that you're plugging our website, you know, that's wonderful. All the times that I've ever spoken about the value of mediation, I always plug in, you know, even on the condo and cider show, we have it scrolled the website, you know, so that people can just kind of click on it. And I says you want to know how to do that in mediation, have the state of Hawaii pay for it. Here's the website, go to the website. And I will tell you how to do it. But if you if you don't, you know, you can't always have me on a recording, go to the website. And the website will tell you exactly how it's done. And that's the, you know, that's your resource. You know, if you want to figure find out how the state of Hawaii is going to pay for the mediator to meet and all you have to do is write the letter to the board and say, you know, pursuant to 514 b 161, I demand evaluative mediation on this issue. And they have to, because if they don't do it, we went in when we did the statute, we said, you know, if they don't agree to it, you can go to court and recover your attorney's fees to compel them to do mediation. And once you get them into mediation, the state of Hawaii writes the check. And I remember who was I talking to? I was talking to somebody over at dispute resolution prevention. And she told me, yeah, I will call them. Yeah, they send us a check. And you know, so so I know the state of Hawaii does write the check and sends it over to the mediators to pay for them. So, you know, I think, I think that's a wonderful program. And like I said, you know, I send people to your website all the time, if they call me about dispute resolution, because, you know, they're not going to remember everything I said. So if you don't, you know, if you forget what I told you, go to the website. And so today, you have other stuff that you have on your website, right? Yes. Yes. Tell us about this new program. So we have the we have, and we have a bunch of resources, but the newest resource is our condominium educational videos. So these are on our website. It is a series of 15 videos. They're short and sweet. There are three to five minutes each. They're interesting. They're engaging, you know, professional actors, you know, neat sets. They're fun to watch. You know, it's not the boring kind of someone just, you know, monotone lecture. They're fun. So anyway, they're on a bunch of different, you know, subjects, and they're just really great if you just want to, you know, get some information and not spend a whole lot of time, because you can watch one, you know, and then, you know, if you have a few minutes, you can watch one and you don't have to watch them all at the same time. You can go back to them if you want to refer to them. But anyway, the series is called Hawaii Condo Living Guide. And again, it's on our website. There are, like I said, 15 different videos. So things like, you know, owner's rights and responsibilities, boards, rights and responsibilities, a mediation, you know, as we were talking about what to do, you know, when you're purchasing a condo. We also talk about governance issues. We talk about governing documents, meetings, requesting records, budgeting, special assessments. I mean, there's just a whole bunch of topics that we talk about. And so they're good. We've gotten a lot of positive feedback from the people who have watched the videos that they've enjoyed them. They've learned it's an interesting, you know, way of learning. So yeah, I mean, I really want everybody to check them out. And if you're listening to the show and, you know, you have other owners or neighbors or your board or family members or friends or whoever that lives in a condo, please let them know that these videos exist and share this information with them. Okay. And so what if there's a topic there that, I mean, a topic that, you know, somebody wants to learn about, and it's not on these videos, can they somehow contact your department or and ask you guys to, you know, do a video? I mean, are you going to have future? Are you thinking about adding to this library of videos? You know, I mean, it's a possibility. But at the moment, we just finished it, you know, we just finished it at the end of June. And we don't have plans to have more videos. But, you know, it's not set in stone, we could. And yeah, if people have, you know, we do, besides videos, I mean, we have brochures, we have over 25 brochures, we have condorama that we do twice a year, which used to be in person. But now, you know, with with the whole pandemic, we do it, you know, online as a webinar. As you said, you know, we subsidize HCCA and CAI. We have a condo bulletin that we do quarterly. So there's a whole lot going on. And yeah, if people have, you know, feel like there's a topic they want more information on, or, you know, we can do a brochure, maybe a video, if we do more videos, talk about it in our bulletin. Yeah, they can definitely submit that to us. And, you know, they could either call and ask to speak to a condo specialist, or they can email the branch, you know, and direct the inquiry to a condo specialist. We actually would welcome that because, you know, we go, we go by the calls we get and the things that we think are important and the areas where we see problems. And that's kind of how we decided on the video topics. But, you know, there might be other situations or, you know, things that people want to know about. And we may not know that. So yeah, we would appreciate and encourage people to share that with us. Okay. And so they can call you. And why don't you tell us, give us an email address and a phone number. Okay. So our email address is HIREC. It stands, it's H-I-R-E-C. It stands for Hawaii Real Estate Commission at DCCA.Hawaii.gov. So again, it's HIREC at DCCA.Hawaii.gov. It's also on our website if, you know, if you don't remember it or, you know, and the phone number is 808. I believe now you have to use the 808 when you're dialing. So 808-586-2644. Okay. Do it again 808-586-2644. Yes, you got it. So really, we would welcome any suggestions, any input, because again, we're here, you know, to provide education. And if, and if there's some area that we haven't covered that people would like us to, then we definitely want to know about it. Okay. And I noticed too that you covered budget and reserve funding also in your three to five minute. How do you cover a subject that broad with a three to five minute video? Well, you know, you have to understand, I mean, we're covering the high points, right? I mean, we're kind of hitting the high points and summarizing. It's not, you know, obviously a detailed course in the subject. But yeah, I mean, you know, we wrote these scripts and tried to keep it under five minutes because, you know, you tend to lose people's, you tend to lose people's attention after that, you know, no one really wants to watch it longer. But yeah, it was a little bit of a challenge to try to condense it into a short video. Yeah. But we did. But, you know, talking, you know, about the budget and reserves, I know that that's going to be of interest, you know, this next legislative session because of what happened in Florida, the collapse of that building. And, you know, and we do have a very strong budget and reserves, you know, statue. And so I think, you know, now people are going to be spending, you know, more time. And when that law was passed, I know, I know, and this probably gives me away, you know, it gives away my age, but I can remember that the DCCA hired somebody from the UH to prepare manuals on the budget and reserves. And it's like a how to manual, how to do, how to set up your budget and reserves, and you do your reserve study. And my understanding is the manual is still on your website, right? I know we have some old older manuals on our website. I think there's something from gosh, I don't know if it's like the late 90s. So there are, yeah, we do have some information that's been there a while as well as new stuff. Yeah. Yeah. And, you know, that might be something that you might want to advertise, because, you know, to me, that's really, I mean, that's where people, you know, when people have asked me, you know, when the law, and when it happened, I got calls from the legislators, oh, do we have to pass a law? I said, no. The last thing we need is more legislation. And I said, we have a very strong budget and reserve statue. Maybe people are going to be asking that you beef it up, because, you know, I think a lot of boards kind of take it for granted. And now they're being told, you know, you can't mess with your reserves and you can't mess with, you know, with your budget. And, you know, and people used to think, oh, it was a good thing not to raise maintenance fees. But what happens if you don't raise maintenance fees year after year after year, you end up with a Florida situation where people are fighting about, oh, I don't want to pay to do these repairs. And you have a building collapse. I mean, this is, I mean, it was a wake up call. It was a, you know, to me, it was an awful wake up call. Because it was because I'm sure everybody who lived in a condominium thing, he went home that night and figured, oh, my God, is it going to happen? And you look for cracks in the walls and the sea, you know, think, oh, my God, you know, if it happened in Florida, it could happen here. We live by the ocean and stuff like that. And so I really think that, you know, people are going to start looking at that. And I told legislators, you know, I would check with the DCCA because I think they got the manual. They spent a lot of money to hire somebody from UH. And then they went, you know, they took the dog and pony show to every neighbor island. And it was a how to set up your budget, how to do a reserve study. And, you know, they did that. And, you know, it was a long time ago, and maybe they're going to have to do it again to reinforce, you know, the fact that, you know, we have this law, we don't need new laws. We might have to clarify and maybe beef up this one. But, you know, I think that might be an area that people might be interested in. And, you know, how do we avoid a Florida collapse issue? I mean, what can we do? So that doesn't happen to us, you know, that kind of stuff. But, you know, I know you guys have got the resources. And so, and I told the legislators, and one of the legislators e-mailed me back and say, oh, yeah, they told me they got the manuals. I said, see, I told you, you know, they don't throw anything away. And they were the ones who told me it's on your website. That's when I said, you have this terrific website with all this information that if people would only look and now what we need to do is get the word out that there is this terrific website, state of Hawaii, it's free. And all you have to do is log on. If you don't have a computer, just go to a library and, you know, log on, state of Hawaii, real estate commission. And you'll see all these different topics. And, you know, and, you know, you can set, you know, be there for hours, right? Yeah, that's it's true. I mean, there's a lot of information on the website, like you said. And so, yeah, you could spend a lot of time on it. I don't know if someone would really want to do that. But, you know, there is a ton of information. Right. And to me, I, you know, that's what I told the legislators, hey, let's reinvent the wheel. We already have, you know, pretty good legislation. And maybe we got to take a look at it and see where we can tighten things up or maybe get out on an educational program to, you know, and I told them that, you know, maybe that's one thing you could do is to direct the real estate commission real estate branch to do educational flyers, focusing on budget and reserves. They want to avoid the Florida situation, then they got to be, you know, I mean, budget and reserve reserves was one of these really boring topics that they, that nobody really wanted to think about. But now, I think the focus is there. It's like, my God, you know, the board is getting, the board got sued in Florida. That doesn't mean we can get sued. Sure, you can. You know, you have if you don't take, you know, certain steps and, you know, the building falls down, sure, you can get sued. Right. And we've seen it. And so, yeah, so, so now there's a lot of board members thinking, Oh my God, what do I have to know so that I don't get sued? You know, and, you know, so, you know, I think, I think that those documents are going to be really relevant. But I, you know, we run out of time. But I think, you know, what we've done in this episode is to show our viewers what a resource there is on the state website. Right. Really big branch about condominiums. It's like anything you want to know about a condominium, you could find out on their website. Yes. So check it out. Including this new program and the department welcomes input on new topics and how to do things better. Right. Yeah. Yeah, definitely. We want to know. We do want to know if people have topics that they'd like us to cover. Okay. Well, thank you, Lori, for being my guest today and sharing this information. And I hope, I hope as a result that people will start using that website. Like I said, it is a terrific website. It's got all this information on it. Anything that you could possibly want to know about condominiums. And I want to congratulate you and your colleagues for putting that together and administering, you know, doing everything you do to administer that website. Well, thank you, Jane. And I hope you're right. I hope a lot of people will now check out our website. Yeah. Watch the videos. Okay, watch the videos. Okay. And thank you to our viewers for joining us for another episode of condo insider. And please join us next week at three o'clock on Thursday for another episode. Mahalo and aloha.