 Think Tech Hawaii, civil engagement lives here. Aloha, welcome to Kondo Insider, Hawaii's show about association living. I'm sitting here with my co-host, who I enjoy working with, Jane Sugimura. We thought it would be a wonderful time, all the votes are in. We know what happened to the legislature. We've been driven to drink, no not really, but the reality of it is it was an interesting legislature and city council hearings on the sprinklers. We thought it might be a good time to just kind of review that with everybody. But first, Jane, we have a seminar on this topic coming up, right? Yes, we have a seminar on May 24th, update on the laws that have passed, and that's going to be at the Hale Koa. And so, if they want the full story, since we only have 28 minutes here to go through some fairly extensive legislation and issues. They can come to our seminar. Yep. Yes, they do. They can come and ask questions, and that's a benefit if they come to the seminar. And they can dial in here too if they want to call our hotline at 808-374-2014. That being said, we all know about Hawaii Council and the great work they do. We know about you and me, and so let's get right to the meat of this, there's a lot of stuff going on. Let's start with the city council, Bill 69. Right. That's about the fire sprinklers. And so that was signed into law by the mayor, in fact, about a week ago, a week to ten days ago it got signed into law, but it won't be effective until July 1. So the law basically gives trigger dates when you have to do things by that as of July 1, so the clock's not quite running yet. Right, the clock's not quite running, because for one thing, the law requires all condos within the first six months to notify the city that they are going to comply. Of course, we're not aware that there are any forms, and so that's one thing we're going to be following up on with the fire department and the city council as to who's going to prepare the forms that the buildings have to sign and resubmit to the city to say that they're going to comply. I think this is a good thing, you know, fire safety is really something we should all be concerned about. No one wants to see someone injured or die because of fire safety, whether it be a person or a pet. We want to take care of our people here in Hawaii, but this only applies to Oahu, first of all. Right, it only applies to Oahu. And this is a compromise bill. It's a compromise bill because the mayor, as a result of Marco Polo fire, he wanted a mandatory retrofitting bill that would have required all high-rises that weren't already sprinkled to install fire sprinklers in their buildings. And that was just a terrific burden on a lot of condominiums. And this whole exercise on how this bill came about, this compromise bill, I think is a great lesson because the council members who had the most condominiums in their districts, that would be councilmember Fukunaga, Kobayashi and Kobayashi, and Trevor Ozawa. They had two community meetings that were condominium owners and, you know, the board members and property management people could show up and testify. And they did. Testify they did. There was a Saturday meeting, and there was one meeting just before Christmas. And they filled the committee room, they were in the hallways, and they educated the city council members. And that's why we have a compromise bill that gives flexibility to the associations so that if they want to install sprinklers, they can, but there's no mandate. Well, let me ask you that. Let me help review some things and help fill in the blanks for me. First of all, we know it's Oahu only. Only Oahu, yes. And the bill applies to non-sprinkler buildings. Yes. Over 10 stories in height. Yes. So if you're less than 10 stories or about 75 feet, it doesn't apply to you. And the first thing they have to do is they have to tell the fire department in writing these non-sprinkler buildings that we acknowledge bill 69, ordinance 69, and that we will comply. Yes. That's the first step. And one thing that has come to my attention recently, when this legislation was first initiated, you know, the fire department came out with a list. And somehow that list has been publicized. And it tells you which buildings have interior quarters and which have no interior quarters. Because if you have exterior quarters, which means that you walk out of your unit and there's air and there's no wall, you're exempt from the sprinkler requirement, okay? And buildings that are under 10 stories are also exempt. Now this list, for some reason, is not accurate. And so, you know, I've had people say, well, you know, I'm on the section that says no sprinklers or I'm on the list and my building's got sprinklers. What people have to understand is that list I know is public because the fire department came out and the city council put it on their website, okay? That list we all know is not correct. And so if your building's on there and if it's wrong, don't worry. You know, don't worry, because if you've got sprinklers and you're on the list, doesn't matter because it doesn't apply to you. And if you're in the section that says interior quarters and you have no interior quarters, you have exterior quarters, it makes a difference because when they come and inspect your building, the fact that you have exterior quarters, makes you, will automatically give you a passing score. So do we know if a building that has exterior quarters that is exempt, do they have to file the 180-day letter? Yes. Okay. Because I think what, as I saw the bill, is more than about sprinklers, it's about a fire safety inspection, a fire safety matrix, where all these buildings are non-sprinklers, have to go look kind of as a whole the building and determine what things they might do beyond sprinklers, fire alarms, compartmentalization, some of the standby drugs. What it is, is they've come up with something called a life safety evaluation. And it's not something that the fire department invented. They have similar inspections and evaluations on the mainland. And the standards that are reflected in the life safety evaluation are taken from national fire safety standards. And there's something called a matrix. It's a spreadsheet that the fire department has developed that allows an inspector to go into a building and look for 17, they basically look at 17 items. And we call it the matrix. And that matrix is embedded into the ordinance. And so if you go onto the city council website or I think the fire department website and you find Bill 69, the exhibit A is the matrix. And the matrix has these 17 items, things like the height of the building, some things you can't change, like the height of the building compartmentalization is what are your walls? What kind of walls do you have? Do you have concrete? Do you have masonry? Do you have drywall? You know? Those things you can't change. And how far is it from the middle of the building to an exit, right? Is it 50 feet? Is it 100 feet? Is it 200 feet? Because the farther it is to get to the exit to get in and out of the building, then the lower your points are. So if I'm going through a wahoo only, everybody has to send a letter who's non-sprint code today. They will comply with the ordinance. The first step of the ordinance is to do a life safety evaluation, this matrix. And who does it? You have three years to do it and licensed professionals, architects or engineers can do it. And so they will have to go through a training that the fire department will do. So that's why I think it's going to take three years before, you know, you have three years to do it because right now the people who are supposed to be doing the inspections have yet not been trained yet. And I think what we also say is we as an industry are trying to get the fire department to give us this letter of acknowledgement so we have a standard letter so we're not all out there trying to do our own thing and spending money on it because as we know the bill was signed into law, but we have until July 1 to kind of fill in the blanks on some of this stuff as we're going through it. So you now have a building that they go through the matrix and maybe they can make some improvements to help improve their score, but they still fail and that's when it gets mandated for a fire sprinkler system except under certain circumstances. Right. And you can opt out. You can opt out, in other words, you get 50% of your unit owners or if you're a co-op, 50% of your shareholders. And you can vote to opt out of that requirement. But if you do so, you have to put a sign in your lobby that says that you don't have sprinklers in the common areas or in the units. And I think as I read the ordinance as well, in addition to the notice in the lobby or public areas, some public area about being non-sprinklers, then on all of your real estate disclosures that go to people who are buying that that real estate disclosure also has to indicate that the non-sprinkler building. Right. There are no sprinklers that hasn't. And this is something that all sellers of units and condominium have to fill out anyway. And just to refresh my memory, I think I know the answer to this. If the association, not the board, but the owners wanted to opt out, it's a majority of all the owners, like 51% of all the owners. Not those that show up at a meeting, it's 51%. So what happens is, depending on the score they get from the life safety fire matrix, they may be close to be able to do something with the new alarm system or whatever they get a passing score, depending on all those different criteria and the 17 points in the life safety matrix, they would have to go to the owners and say, because if they don't opt out, vote to opt out, then they're automatically opted in. They got to put the sprinklers in. They have to put the sprinklers in. And if they have to do that, the ordinance allows you up to 12 years. So that means that you can add it to your reserves and then start stocking away money every year. And if you need more than 12 years, the fire department has indicated that they will give you an extension if you want to install the sprinklers. Because the one thing I notice in the ordinance, in different spots, there are ways to remember one, two, if you got a score and it wasn't passing, let's say, you could appeal that to the fire department, why you think that that matrix was not completed correctly. Or in the same time, if you're going through and there's engineering issues or raising money issues, you can request extensions for the time to comply. But I think the fire department's going to want to see progress on meeting the goal. They're not going to give you an extension unless you show them that you have done preliminary work. And the reason why you can't comply with the statute is you need additional time. And they have indicated that they would give the additional time. And you know, with the matrix and the inspection, it's not like a one-time inspection. In other words, if you have the professionals come in and they do the inspection and you don't get a passing score, you can work with that professional and say, hey, what do we have to do? Do we put in more smoke detectors? Do we upgrade our alarm system? Do we fill in our vertical openings? And they can tell you, oh, yeah, this will get you six more points or this will get you four more points. Or you only have eight more points to get a passing score. And this is what we recommend. And if you do that, then we'll come back and we'll do the evaluation. And we'll give you a passing score. And that way, you don't have to do the sprinklers. And I think it's important that from my... It's very flexible. As I read the ordinance was, let's just say you opt out of the sprinklers. So it's like an adjusted score on the fire matrix. You still have to get a passing score on the rest of the stuff. Yes. And it may require you to put fire stops in between the floors. It may require you to put new fire doors on. It may require you to put a new fire alarm system on. Just because you've opt out of the sprinklers doesn't mean you don't need to get a passing adjusted score on the rest of the stuff. Right. Yes. But I think all in all, this is a good thing. What about the bill and the compromise? I think that it's good and I think it's fair. I think that the city council listened and the fire department did work to try to bring the parties together. So overall, I think it was a very collaborative effort on everybody's part. The fire department didn't get 100% of what they wanted. We didn't get 100% of what we wanted. And so maybe that's what makes it a good bill. I actually think it is a good bill. My only complaint is the legislature on the state side didn't pass out the bill to help pay for and get loans with regard to fire sprinklers. That kind of died on an administrative problem, not anything practical with regard to the bill itself. Right. There was no substance regarding the fact that it died. And so we will have to go back to the legislature next year again. Right. Okay. We're going to take a short break and we're going to come back with the three state bills that passed this year and the impact on every association. We'll be right back in a minute. Aloha. I'm Kili Ikeena and I'm here every other week on Mondays at 2 o'clock p.m. on Think Tech Hawaii's Hawaii Together. In Hawaii Together, we talk with some of the most fascinating people in the islands about working together, working together for a better economy, government and society. So I invite you into our conversation every other Monday at 2 p.m. on Think Tech Hawaii Broadcast Network. Join us for Hawaii Together. I'm Kili Ikeena. Aloha. I'm Ethan Allen, your host on Pacific Partnerships in Education here on Think Tech Hawaii. Every other week, Tuesdays at 3 p.m., we have guests on and talk about the fascinating, interesting and unique partnerships in education that occur across the Pacific Islands with Hawaii, Micronesia, the Marshall Islands, Palau, Guam. All these places have really rich local education programs going on and the exchange among and between these programs is a wealth of great information helping the islands all learn how to survive and thrive in our ever-changing world. I hope you'll join us on Pacific Partnerships in Education. Back to Kondo Insider again. We just finished talking about Bill 69 at the City Council on mandated fire sprinkler systems but the ability to opt out and to compromise and I would just thank Jane for all of her hard work on that, Bill. I know you put a lot of time at the City Council and it certainly didn't help having hundreds show up saying, no, we can't afford that. No, but it was good. It was really good. I mean, even though, you know, it was time out of their lives to come and show up. I think it was a learning lesson for everybody, the condominium residents as well as the Council. The condominium residents, I think it taught them that they could make a change because they did. The mayor wanted a 100% mandatory installation and because those residents showed up it didn't happen. It was a very valuable lesson. It shows why you should all be involved with Hawaii Council and join our organization and help support because, you know, going down or even testifying and writing over the Internet has a lot of impact and it keeps bad things from happening. Let's go to the state. Okay. Okay. We actually started out with only about 30 bills this year and, you know, last year like 150. Right. And so only three at the end of the day, maybe four that have impacted us at some level. Right. What about the big dog, a House Bill 1873, which some have argued take away the board's ability on priority of payment and foreclosures and things. Tell us about that bill, what it accomplishes. Okay. What it does is it basically says that, you know, if you are in a delinquency situation and the association is foreclosing, if the unit owner comes up with a payment plan, the association has to entertain it. You can't say no. This is a homeowner. This is, you know, part of your community. You can't just say, hell no. Go away. We're going to foreclose. And so if they come up with a reasonable payment plan and a lot of board members say, oh no, they're just doing this to delay, you know, but it's still, you know, you know, people need to be cognizant that this is part of their community and, you know, everybody has hard times and, you know, so, you know, you just can't pick and choose who you're going to help. And so this bill basically says if the unit owner comes in with a reasonable payment plan, then you need to stop the foreclosure and allow that unit owner to try to clear, you know, cure the default. And that allows them to keep their home. I want to say go into fault on the payment plan. If they go into default on the payment plan, the association can continue the foreclosure. So it's not like they give it up. I mean, but it does slow things down. But if the unit owner is able to cure, then, you know, the valuable thing about this is that way they don't lose their homes. And you know, homelessness is a big issue in the state. And so we don't want to contribute to the problem. And so to the extent possible, this bill allows, you know, people to, you know, do workouts with their association in order to stay in their units. So if in that process they have a payment plan and then they get fined, you know, there's this priority payment issue, the first payments you make. So is that priority, is that payment plan, payment applied to the fines so now the guy is delinquent on the payment plan and then he can be foreclosed or how does that work? No. In fact, the priority of payments, if, and the bottom line is, is that, you know, an attorney who's representing the association has to look at the association's ledger to figure out exactly, you know, what is creating the default. And if you, and with the priority of payments, it's easy to lose the trees for the forest, you know, because what happens is if you miss a payment under the priority of payments, there's an order that you're supposed to apply the payments to and under the priority of payments it goes to the late charge first and maybe to legal fees and in fact I had, I know of a situation where when the dust settled and we looked at this $2,000 bill that the association sent the homeowner, the assessment, the assessment, the maintenance fee was $87. There was $650 worth of late charges and about $1,400 worth of attorneys fees. And so when you're talking about the priority of payments, it just creates this lopsided situation where you have a delinquency but most of its late charges and legal fees. And so in a situation like that, you know, under the current, before this law was passed, you had to pay everything. You had to pay the whole $2,000 and then you can file a small claims action or do a mediation or arbitration and ask the association to refund what you'd, you know, the late charges and the legal fees that you felt were inappropriate or invalid, okay? Now under this law you only have to pay your assessment, that $87 that was late and then with you have to mediate the, your dispute as to the validity of the late charges and the attorneys fees and you have to complete your mediation within 60 days. So it gives people, I mean I've seen cases where people were big bills and I would first of all say to every owner out there that if you get a demand or a delinquency notice, don't stick your head in the sand and do nothing about it. Address it with your board or your management company because it'll start compounding the late fees and they'll start compounding at some point. You have to explain to me how, you know, how you got this number. And what that leads us into and what we can spend the whole show on this topic and we have three more bills to cover in about six minutes. So I'm going to say that's going to be the segue into this evaluative mediation that was in the hospital 1874 which also passed, which in essence expands evaluative mediation opportunities. Let me just say to everybody out there that the difference between facilitator and evaluative mediation is an evaluative mediation is like taking the gloves off. The mediator can take positions and say if I was the judge in this case, I would rule against you. And more times than not, it's a retired judge hearing these evaluative mediation and the success ratio is paid for and subsidized by the condo real estate commission condo education fund. It's a great program. So segue into what how this expands the mediation opportunities. Okay, mediation opportunities. What it has, what it does is that right now the ordinance, I mean, the state law says that only an owner and a board can do a mediation. This bill says it expands it so that now you can have a board member or a managing agent as an additional party. So if you have, you can have a board and the owner or the board and another board member or the board and the managing agent or whatever, you know, combination of the three. So it's been expanded to, you know, allow these additional parties. And there's a provision in there that, you know, allows you to compel arbitration mediation because now even though the statute says shall, a lot of times you can't get the association to, you know, into the mediation room. I mean, they just stall or give you excuses. But now if you want to compel mediation, you can file a motion with the circuit court. And more than likely you will prevail because the statute says shall. It actually says it's a breach of fiduciary duty if you know good mediation. Right. So I think, you know, that's a really good program because the argument's always been that the board has all the money and the owners are stuck. This is about $175 a party. And you get before a retired judge has a very high success ratio where the emotion gets out of it, where boards get who or owners get who and now you have between the management company and the board or another director against the board, expanded opportunity to deal with these issues without it having to go to legal and spend lots of money. And another part of the bill also allows voluntary arbitration, binding arbitration. Right now you have non binding arbitration because at the end of the losing party can ask for a de novo review. You start all over again. And the I've heard one criticism about this new bill and that not the voluntary binding arbitration is subsidized by the condo education fund. So you each party pays, you know, one hour's worth of time. I think it's about $175 and then the condo ed fund kicks in and will subsidize the rest of it. I've heard one concern raised and said that, you know, the insurance companies representing the board will never agree to voluntary arbitration. But there are lots of things that don't involve money damages. So you won't have an insurance company, you know, being concerned. So it's I think it's still a good bill. And I think we've got two more bills. One is the fake service animal. Yeah, go for the last two. We have about two minutes left and fake service animals doesn't really affect condos. But what it does is it has sanctions against people who try to pass off pets as animals that are protected under the fair housing. And to that extent, I think it will affect. We're hoping that'll expand to emotional support animals, right? Be the opening of the door to have a meaningful discussion about the emotional support animals. Although I saw American Airlines made an announcement the other day that they're now limiting you you can't have insects. You can't have snakes. And I mean, it's a big issue that people are taking advantage of some. We support the disabled having everything they need to live a better life. But there are people who are using the current laws to take advantage of it. And this will be the first step on fake service animals. And then we have the pay disparity bill. And so if you're an association and you have employees, you cannot ask your applicants who are applying for a job about their salary history. And you know, before, you know, associations didn't want their employees talking to each other about what they got paid. Now you can't stop it. They can talk to each other about what they got paid. And you can't take any action against them because that's retaliation, which is not permitted under a different part of the the 514 B. So you know, anyway, there's more freedom for prospective employees. Well, I think you and Hawaii Council deserve a lot of credit every year. This takes a lot of time and effort to do this. And we've been successful in getting meaningful legislation passed and avoiding some legislation which really had a lot of bad consequences. Right. And it's, you know, it's a collective effort. So, you know, I can't take credit for, you know, the results. And I, you know, I agree with you. It is, it is something that is time consuming. But you know, I think the results are something that benefit a whole lot of people, which makes it worthwhile. Well, next week on condo insider, Jane is going to be here all alone. She'll miss me. I can't make it next week and bring an exciting show about association living. And we thank you for watching and we invite you to ask questions or email us. We're looking forward to make sure we have good associations with quality living. Aloha.