 Aloha and welcome to The Condo Insider. I'm your host today, Scott Shirley, and I'm really pleased to announce that we were able to get Carol Richelieu, the senior condominium specialist at the real estate branch, to come back and join us. She was our guest several episodes ago, and we had quite an agenda, and didn't get to one part of it, which was in regards to mediation. So part of what we're going to be discussing today is condominium mediation. And I'd like to thank you again, Carol, for agreeing to come back. Obviously, I didn't scare you the last time. You did not, and we appreciate the invitation to come back. Well, I'm, again, so pleased that you were able to come back today, because we didn't get to finish everything we planned to discuss. No, we didn't. It was a very ambitious agenda. Well, I guess we can say this is part two of part one of the last time you were here. And what we're going to focus on first in this episode is the issue of mediation and condo associations. Yes. So, first off, we do know that we did have Act 81 passed at this legislative session that basically says if a board member or an owner requests mediation, basically the, let's say an owner is requesting mediation with the board. The board can't say no, right off the bat. They can, but basically of their own peril. Yes, at their own peril. They can't. You want to explain to us a little more what that statute was. Well, the basic mediation statute, people seem to skip over the part that says shall. So if the requesting party, which would be either the owner or the board, makes the request, the statute does provide that the party with whom they are in the dispute shall enter into mediation. But there are those instances where apparently they aren't understanding what shall means. And so people will refuse to participate in the mediation. So this past legislative session, they amended Section 514b106 to indicate that if the mandatory provision, the shall position of the mediation statute is not complied with, then it may constitute a violation of the fiduciary duty of the person which is owed. They did put a safe harbor in it to allow that maybe the person who could rethink their position and change their mind and enter into the mediation as required by the statute. Yeah. But so they basically, you know, they give us an exposure to liability on that basis. And what's more interesting about this piece of legislation is, just as you and I were discussing before the show started, is that the statute always said shall. Yes. That's true. And apparently it wasn't working. I don't know if it was board side or owner side. And then the legislature had to come in and clarify that part about you shall and this is what you should do. They really meant what they said. Yeah. That you shall persistently. So you mentioned they didn't understand the word shall. Well, you know, and it's a, there are, you know, the statute provides for, you know, penalties. Yeah. If they do refuse to mediate because in the event that it does end up in litigation, then the penalties can include that the person refusing to mediate, the court can take that into account. Absolutely. And that person could be also liable for court costs, attorney's fees and all those other things. Well, I can tell you, I did have a scenario several years back where there was a pipe break in a unit, but the owner refused to let the association resident manager or anybody come inspect the flood, hired her own contractor and then sent us the bill. Well, the board decided, well, you wouldn't let us see what happened. We're not going to pay the bill. So she decided to sue the board. We get into court and the judge said, are the parties willing to mediate? And so we all agreed. Go off into a mediation room and the owner who agreed to mediate sat there and would not say a single word, wouldn't even answer any questions. So then we get back into the courtroom. And of course by now the judge has gotten that little sheet of paper from the mediator saying that one party refused to mediate and the entire case went in favor of the board because the judge said she was taking that into consideration. Right. Right. And I've talked to those too, like whether they want to go to, it's their decision into litigation or mediate and as a practical matter, oftentimes the judge will say, well, by the way, go out there and mediate it. So if they go directly to court first, they may well end up where they should have started, basically. But this is a less expensive route to go than that. Yes. Mediation is a lot less costly in terms of time, expense and emotion. Litigation is really difficult and it can be very wrenching emotionally. And we were noticing that at our case, especially when the judge found in our favor instead of the owner's favor, she actually called the judge stupid. Disrespectful? After a couple of times of saying that to the judge, the judge pointed out that they have a special room for people like that if she says it one more time. So the other thing I wanted to point out too is this issue about fiduciary duty. Let's just say an owner wanted to mediate something, whatever the issue may be, and the board says, no, we're not going to mediate it. Just outright says no. If it does turn into litigation, their directors and officers' insurance may not cover that because the statute says you will do this and they chose not to or go away from the statute. And so their D&O insurance might not cover them on this. That's, I have heard that as well. That's another risk that can be taken. So basically they're going to have, the association is going to pay for the litigation. And what that usually means is you end up with a special assessment to pay the cost. Yeah, there could be all kinds of outcome when, in fact, it might be resolved very early just by opening the lines of communication. I think that's the key there is the lines of communication between the ownership and a board. As much discussion that can be had will prevent certain things like this from happening. Right. Again, the concept of the condominium is self-governance. Yes. And if there is a disagreement, I mean mediation is a civilized way to communicate and to resolve the dispute. Actually, I like that line. I'm going to steal it from you. The civilized way to handle the problem. Feel free. Now, there's also different types of mediation that you can go into. Yes. Yes, there are. Still serving on the real estate commission when we approved, or the legislature, and I can't remember if it was the legislature or us, with the evaluative mediation, I believe, as well as the law. Right. That went into effect in 2015. Yes. It was the legislature. But, of course, the real estate commission implemented it and filled in exactly how it works. So there are now available two types of mediation. One is the traditional one, which is usually considered a little less expensive. And it's what they call facilitative. And it's the trained mediator with the parties, the one asking for mediation and the party that disputes with, and they try to talk and negotiate with both and try to find a resolution for it. And in those cases, the real estate commission will subsidize usually about $300 after that is a sliding scale. And the second type, which has only, again, been in effect since 2015, is the evaluative. And that one, again, you have your trained mediator, but the mediator is usually a specialist in this area and will listen to everyone, collect all the facts, but then give basically a candid assessment of the value and of each person's position and basically kind of like, you know, you're more right on this and you're not so right on this so that they can try to bring a resolution about it that way. And that one, again, that one is subsidized. It costs about $375 for one hour. And then after that, the real estate commission subsidizes the rest of the mediation. And it's become more popular than the facilitative one, I think basically because the mediator in this case is like a semi-ajudicator and so that they really get a thorough concrete evaluation of the position. And I think the other reason it's more popular is just as you said, they gather all the facts and can actually say what a normal mediator wouldn't be able to do is that based on the facts, you're more in the wrong. You're more in the right type of scenario, which a normal mediation is more to find a meeting of the minds and move on. But in this one, they say, okay, on that point, ways in your favor, on that point, that ways in your favor. And so then they could basically decide it so that the parties can have that third-party neutral perspective of their, since they may very well be emotionally invested in it in the situation. Now if memory serves me correct, and it doesn't always, the legislature passed that in either 2012 or 2013, I'm not right off the bat, I can't think of the exact year. But the reason it was delayed going into effect was the funding of it, which is actually paid out of the condominium registration. So what happened in that scenario is an additional dollar per unit was applied to the registration fee, and that $1 went directly into the evaluative mediation program. And I think currently, I believe it's about $3.50 per unit, $3.50 per unit, if you have more than five units that get set aside from that under the new fee that we're adopting in the administrative role. So in your position as the condominium specialist at the real estate branch, do you get an idea or statistics on what's happening with these mediations? Well, I did look it up for today so that I would be accurate. For the fiscal year of 2017, being the state run this fiscal year, evaluative there were 22 cases compared to the facilitative of 12 cases. But thus far this year, this quarter alone, we have had 10 evaluative cases and five facilitative. So it's picking up pace. Yeah. And again, as you had pointed out earlier, it seems like evaluative is really picking up as the more popular version of mediation to go to. Yes, yes. And I quite understand why I think that would be preferable to me because if I had an issue and thought I was right, they thought they were right, I think it's really good to have someone to be able to sit down with that kind of knowledge and background and expertise, but in a mediation type fashion and say, you know, on ways more this way, this way so that you can get some clarity on the situation. Well, the other consideration in this is that you and I can understand this very well because I believe you were president of your board at one time or on your board. I was, I have been president of a board for decades and decades. Yes. So I do understand. And I also was the president of my board for two years and I knew better and I still did it. So the recovering board member. Well, now I tease people who I do know our board members. I say I have a 12-spot program to get you out of that. So we'll talk later about that 12-spot program for you. Well, we're already at about the halfway point. So we're going to take a quick break. And when we come back, we'll talk about a little more on mediation than a couple of other pieces of legislation that went through this year as well. Great. This is Think Tech Hawaii, raising public awareness. Hi, I'm Ethan Allen, host of a likable science on Think Tech Hawaii. Every Friday afternoon at 2 p.m., I hope you'll join me for a likable science. We'll dig into science, dig into the meat of science, dig into the joy and delight of science. We'll discover why science is indeed fun, why science is interesting, why people should care about science. And care about the research that's being done out there. It's all great. It's all entertaining. It's all educational. So I hope to join me for a likable science. Hello, everyone. I'm DeSoto Brown, the co-host of Human Humane Architecture, which is seen on Think Tech Hawaii every other Tuesday at 4 p.m. And with the show's host, Martin Desbang, we discuss architecture here in the Hawaiian Islands and how it not only affects the way we live, but other aspects of our life, not only here in Hawaii, but internationally as well. So join us for Human Humane Architecture every other Tuesday at 4 p.m. on Think Tech Hawaii. And welcome back to the Kondo Insider, everything you ever wanted to know about condominium ownership, condominium living and so forth. And again, my guest today is Carol Richelieu, the senior condominium specialist of the real estate branch, who I was able to control to come back and join us again, because you had been here once before as my guest. And we were finishing up on condominium mediation, which we weren't able to finish our last show that I was able to have you on. So just a couple more questions in regards to the mediation. We know that evaluative has become much more popular. How does a person go about requesting mediation, though? I think there's a little bit of confusion about that as well. That's true. There are a number of people that think it's the real estate commission itself that does a mediation when, in fact, the service is contracted out and people can go on our website and look for this brochure. And it explains who participates, who's contracted to be the mediators. And, of course, it's available on all islands. And both types that we talked about, evaluative and facilitative. So the person that's interested in it just contacts the mediator directly and arranges it with the mediator, what type and everything else. And they send us the bill. That's so we're not involved at all. It's completely independent of the real estate commission itself, just handled by the professionals. They can get the information online or they can actually even call and say, how do I request mediation? And then we do have available online the list of the mediators that are contracted. So as you pointed out, though, it's a contracted out service of the mediation. So that's why it's available on every island. And actually different mediation services that are available on different islands. Like you may have one company here, but a different company handling it. Mediation company on. Right. And if they want, like, facilitative, then the facilitative mediator will fly to the island where the service is requested. Well, that's good to know. And I think we touched on base the issue of failure to mediate. Yes, yes. That it could be against the fiduciary duty of the board to not mediate. Right, there are consequences. And I think the other thing is educating the home owners that they have this available to them. About a month ago, I heard from a friend of mine who owned a condo on the North Shore and they did a modification to their Illinois about seven years ago. Now they didn't get permission. They went ahead and did it, which is very typical. Didn't know I was supposed to ask. And now seven years later, different board, different group of owners, actually, now are saying, oh, no, you need to tear that down now. And it's been there for seven years. So they were contacting me, seeing what they could do. And I said, you can request mediation. Yes. And I thought that was probably a good one for them to. But when I talked to them, they didn't know that that was available, that they could even request mediation. Yes, unfortunately, yeah. And so I think the other side of this coin is not just making the board aware that you need to mediate if they requested. Is that the owners need to know that they can mediate these situations? Exactly. And we've been trying to do a lot of public outreach about that topic to let people know. And that's why you're on the show today to help people know. So we have the new mediation programs. You gave us some of the statistics on what's happening with the mediation. One of the things that our other host, Richard Emory, had done, he did a little bit on this mediation and he did a little research. And of course, it's oftentimes published in the real estate commission bulletin where it'll say owner versus board on a mediation and then says unresolved. So he went and researched what happened with those unresolved and discovered that none of them escalated beyond that point, meaning they went to mediation. Maybe they didn't solve their problem in mediation, but it didn't go any further, meaning into litigation or anything like that. And you and I were discussing before the show, well, they probably continued the conversation after mediation. All right, I wouldn't be surprised because a lot of times, I mean, that is the problem. And going through that process, at least they realized that they can talk to each other and perhaps they can go on and still be neighbors, still be friends and open up those lines of communication. Well, it's funny you talk about being neighbors because I teach a lot of condo classes. And I usually joke that everybody is entitled to buy a condo, but you've got to pass a test to live there because not everybody really understands what it means to live that close to somebody else. Yeah. If they've moved here from the mainland and their houses were farther apart and now you're sharing a wall and a ceiling, and some of them have a hard time actually adjusting to that. So when it comes to an issue where it's the neighbor or something, that mediation will probably work extremely well because now they can understand what it means to live in a condominium. Right, right. And if they somehow unable to speak with their neighbors, then they could enter into mediation with the owner and start talking. Yeah, and because I know boards get frustrated having been a board member myself when you have people come to the board meeting to complain about their neighbor. They walk too loud or they barbecued and I didn't like what they were barbecuing in that. That's sort of outside the scope of the board, but at the same time they want to have a good community relationship going on. So it's sort of a catch-22 for a board when situations like that come up. Right, it is because, I mean, each owner expects what they basically call quiet enjoyment of their unit and when that gets interfered with they want somewhere to turn to talk about it. You know, it's people forget like if you live in a single family dwelling and you're like in a zero lot line, you know, and what if you have a problem with that neighbor, what is your recourse? But you go talk to them and it's no different in the condominium. Maybe you share a wall, but it's still your neighbor. So again, that's a good one, too, about I mentioned it often about you have a right to quiet enjoyment to your unit and it never seems to fail. When you live on the ground floor unit, the people above you have pet elephants running around or mole. Now, in the time we have left, we've talked about mediation, but I know there was a couple other pieces of legislation that you wanted to specifically chat about that happened this year. And it was a very heavy condominium legislation this year. It was. It was. There was we were tracking 135 pieces of condominium legislation. But at the end of the day, it was about six that passed. And one of them I thought was really quite interesting as a board president when we posted the board meeting agenda or the notice. We always put an agenda up. I did the same thing. It made all the sense in the world. But apparently some places would just stay here. We're having a board meeting, but we're not going to tell you what it's about. And we'll post the notice. So the the legislature had to pass a law, which is known in effect, that says that the agenda or the possible agenda items also need to be posted. I mean, I would think that would go without saying it's a major form of communication from the board, but it is now, you know, it is now the law. That was actually the standard way that I would notify on the condos that I managed or even my own association was we would post the meeting notice and right next to it was the agenda for that particular meeting. Right. Because owners need to know, is there a topic there of interest? Should I attend to this one or should I not? Or it's really you don't want to hear from somebody later saying, well, if I knew the discussion was we were going to paint the building pink, I would have shown up. Right. Yeah, exactly. So that that was one of them. They also, I think, made clear that before owners attending board meetings, it was one of those may rules. Owners may they they changed it to a shall. Yes. That the the owners can they shall be able to attend board meetings and in turn, though, of course, to keep things civilized and orderly, the new law allows for boards to adopt certain participation rules, again, with notice to the owners to let them know, you know, they have to be allowed there and participate, but you've got to play by the rules. Well, it's interesting on that one is that it's actually also a recommendation that if you've approved your rules, which you should have done by July 1st or shortly thereafter on how to how owners are expected to act in the meeting, it's recommended that that also be posted with the notice as well. So, you know, in advance that they'll get three minutes to speak or something to that effect. Right. Or if they're going to have an owners form in the beginning at the end, or, you know, just one of the ground rules. So I actually was doing a room full of board members talking about the legislation one day, and we got to the part about meeting notice and owner participation. And one of the board members said, so you mean it's an example, it would be like they each get five minutes to talk. And another board member blurted out, why would you give them that long? So I always use the example like at the county when you're testifying or even at the legislature. They usually give you three minutes to speak on whatever the subject is. And I think, you know, they have to be flexible. Yeah. Again, these these these folks are the owners and your neighbors. And so if it is a topic of great import and they have something substantive to, you know, contribute, then, you know, why would you cut off? You and I were just I was telling you before our program started that I actually was contacted by a community manager, you know, wanting clarification on all these rules because she knew I was going out and in teaching it. And it's also part of the Realtors Mandatory Core A course. And she says, well, my question is we understand this, this and this, but do we have to put where the meeting is at on the notice? And I said, why are you asking that? And she says, well, they're going to have it in the board president's unit. And he doesn't want a whole bunch of people traipsing into his unit. So he wanted me to post the notice of the meeting was going to happen, but not where it was going to happen at. That's even better than I'm not going to tell you what it's about. I'm not going to tell you where it is. Yeah, the notice needs to indicate where the meeting is going to be happening. And if it's in your unit, and you don't want a lot of people there, move the meeting to another location, but don't just make it a secret meeting and come find us someday. Definitely. One other new and brand new piece of legislation, which I think folks should be aware of is it's a brand new law and it's going to have a brand new section about prohibiting retaliation. Yes. And that that is a brand new. Thank goodness, it defines retaliation. I think in its original form, it didn't define what that meant. But it basically in the context of condominium living with all the parties that could be involved in that, including agents and vendors. If there is a valid concern about the bylaws, the house rules, how they're being done, that they have a right to not be afraid to bring that up and say, you know, I don't think this is, you know, I don't think we should have painted the building pink and not be retaliated against for expressing that viewpoint. Yeah, come out in the parking lot in the president's car has now been painted pink or something to that. Yeah, exactly. So and that that is a brand new section. And I think it's an important one to and also from what I understand through its many changes that had during the legislative session, it was actually more of a bill that the board will not retaliate against an owner, but it morphed into it doesn't matter if it's an owner or board, no retaliation or harassment. Yeah, it ended up doing kind of a laundry list of, you know, possible suspects, I guess on both sides as to, you know, who can't go after who if somebody is exercising their legal rights. Exactly. So again, we I made the agenda short because this is the fastest 30 minutes you and I ever deal with and work. Yes. You know, usually at work in 30 minutes, we keep looking up at the clock and only one minute has gone by. But here it goes by extremely fast. So again, I want to thank you for joining us here at the condo insider. And I'm sure we'll have you back again because next year is another legislative session. And I got a sneaking suspicion there's going to be some more condo bills popping up in 2018. So again, thank you to our guest Carol Richelieu. And remember to always tune in on Thursdays at three o'clock for the condo insider for all your wants and needs and understanding of condominium living. Thanks again for joining us. Thank you.