 Good afternoon, everybody, and thank you for joining us for another edition of Condo Insider that we put on every Thursday. Today we have with us. I'm your host reading 10 oh and we have with us larry McGuire with Porter McGuire and Kea Kona. She is on the white councils and the CAI legislative action committee. So she goes through and is monitoring the bills at the legislature. And there's two specifically that we're going to talk about today that really have a pretty big impact on HOAs and condos. So, Marie, thank you for joining me today, and doing the segment with me. These two are really very concerning. So let's start off with showing up the PowerPoint for the SB 2876. And this one is about boards expending funds to enforce any de minimis violations of association rules or regulations. So usually, so a de minimis the legal explanation on the next slide would be a something that it's kind of like minor or small according to the definition that I found. So why don't you explain to us how this is going to impact a lot of the HOAs. Basically this amends HRS 421 J 10 subsection 10 and by 14 be subsection 104. And what it does is it prohibits boards from spending money to enforce their governing documents. If these violations don't affect the health and safety of the owners and occupants, or the violation doesn't devalue the property. That comprises numerous covenants within the declarations of or bylaws or house rules of condominiums and HOAs. This is a violation of the US Constitution. It impairs, if you will, the the right to enforce contractual obligations. And so, basically, what you're going to have is, for example, taken HOA, they have design guidelines. The motion point has, for example, a number of sub associations that have various design guidelines. You know, you can argue that these design guidelines don't necessarily affect the health and safety. And, you know, you can pick out certain design guidelines that you can say well if I, if they violate this particular design guidelines it's not necessarily going to devalue the property. You can't enforce it. So what's going to happen is owners, individual owners can enforce these and you're going to have a bunch of disputes with the individual owners. But let's say you've got somebody who has a palm tree, and under the design guidelines that, you know, that palm tree can't be over a set height because it's going to block the neighbor's view. Well, under, under this new law, you won't be, you as the association won't be able to enforce that rule, because it doesn't affect health and safety and the palm tree doesn't devalue the property. And it also doesn't say which property it will devalue. You know what I mean. In other words, maybe it doesn't devalue your property, but it's going to devalue your neighbor's property. So let's say, for example, somebody in the HOA, you know, they typically have design schemes for painting, right, and you as an owner you can pick from a certain selection of paints and that goes with their design guidelines. Well, under, under this law, anybody can paint their house, whatever color they want, because it doesn't necessarily devalue their house and it's not health and safety. Well, that shoots the, the design guidelines completely off the block. Basically, I mean, you won't be able to enforce them at that point. Now there again, owners will be able to enforce them the law doesn't apply to them, it only applies to the associations. So you could potentially have numerous fights between neighbors all over the place, depending on, you know what the situation is. So it's a problem. Yeah, that's not going to be very healthy. I can imagine they're going to clog up small claims court. But that matter, we just don't know. And it was recently passed with amendments and as I understand it, they are going to be amending the definition of de minimis so I haven't seen the proposed amendment yet to see, you know what the, the new definition is going to stay. Yeah, I didn't see anything on the website last night either nothing posted. And you know what, when you talk about health and safety sometimes, like say we're talking about a plant. You know, you know, I know from experience that you know the eureka palms how they grow and they get really big. I mean, I was there when we're, there was a demolition going on in the property, and they had used the backhoe to remove the eureka palm. And they dug in three. I'm not kidding. All these rats came out and scattered I was so freaked, you know, and I'm like, I had no clue that they, you know, burrow into those. It's always been my thing. Nope, not doing any of those eureka palms in my yard, you know, because, you know the rats are everywhere they're anywhere, you know, until they use that to burrow in and create healthy so that to me that's a health and safety hazard. But then somebody else might not even know that information, right, or not have that even experiences so sometimes to me I think what someone considers health and safety is like in the eye of the beholder. Well, certainly, whether or not it something is devalued is in the eye of the beholder. You know what I mean in terms of because it doesn't say, you know you have to diminish the value by X amount in order for it to devalue there's no definition of what exactly constitutes devaluation. Yeah, yeah, you know it's it's overbroad it's vague and ambiguous at this point. It's a disaster it's a violation of the US Constitution as drafted. Okay, so let's move on to 1784 because that one's huge. That one is big. I mean I was reading it and I was highlighting things and I'm like, this is not good. One of the main points that I, I see is that it's going to conflict with our existing sitting County LSE requirement. Right. And it's going to require that with the state 1780 hospital 1784, it's going to require another engineer to do these inspections, and we're like, and it's every seven years. Well, it's a layer. It's it's a layer upon layer so you've got, you know, you've got the, the life safety, the fire sprinklers right that's one layer and now you've got these building inspections. That's going to be another layer and we've got the electronic vehicles coming up to right for condominiums that's in fact another layer. And the thing that I'm that really caught my attention is this bill applies to all buildings in the state that are over five stories in height. Every single building and every building's inspection that the initial inspection must be completed by December 31, 2026. That's less than four years from now. We have enough professionals in the state to do that for one thing, and it's up to the building council to impose this well the building council is comprised of 12 members, and they're all volunteers. Right. Yeah, I mean as I understand it, and I don't have first hand knowledge but as I understand it, they're overworked and overburdened as it is, and this is, this is a huge burden on them. You know, I mean I understand the rationale for why the legislature is seeking to implement this but I think at minimum at this stage, if they're serious about this, they need to establish a task force to really look at this and give it some thought in terms of, you know, can they actually do this like have all these inspections by December 3, 2026, you know, maybe, maybe they want to stagger the initial inspections and have, you know, all buildings that are that were built prior to 1960, were constructed, you know, by this date and buildings that were constructed from 1960 to 1970, you know, by December 31, 2028, and so on, you know. Right, right. I mean I would think they, because you know, one of the big issues is because we're in a salt water air environment. I would think they would probably maybe give priority to the ones closer to water versus the ones that are further inland. You know that could be one consideration. And really what bothered me is the duplication of the inspections you have your LSE you got it you got your engineer and now this is going to require another engineer, and also the, when they see something that's a defect. I mean, like they want it fixed immediately and we're like, we, you know, some boards don't always meet every month, you know, or just to try to remedy it immediately. You know, depending on what the size of it, just to try to get a contractor out to even look at that is going to wreak havoc. And the permitting part seems really confusing because sitting County is the one that usually does a permitting right, but in here they are issuing the permits. Well the way it's worded it says you submit your application for the permit to the building council now I don't know if that means a copy of your permit application, but the other thing is they require you once you've determined that a building is unsafe. And, you know, all all sorts of acts kick in that you've got to do immediately. And so you've got to immediately make it safe. You know, whatever the situation is, whether it's, you know, putting up barriers or that orange fencing to keep people out or you've got to do something to make it safe and then you've, you know, I mean, let me look at this next one here. I want to notify the owner of the building so that the inspector, the professional which is an engineer a structural engineer has to notify the owner of the building, and within 12 hours of making that determination you have to notify that the particular county agency so here on a Wahoo it would be DPP notify them and then you've got to within 24 hours provide a full report to the building council. You've got to make a determination of the classification is it safe unsafe or safe with the repair and maintenance program. Make the recommendations. Let me see submit a permit application within three days of commencement of commencement of the work I assume. But you've got to start work immediately. Well, you're right. How does this work for, for let's say a condominium association. You know, number one, the board do they have to hold an emergency meeting. I mean, it sounds to me like they can't even go out for bids. They don't have time to go out for bids, you know, do they not have to wait for the permit to be issued it often takes months for permits to be issued. Brandon this is going to be an emergency situation so you know maybe they have a provision that allows them not to obtain a permit in an emergency situation candidly I don't know I haven't looked into that. So you're talking about health and safety things when it comes to buildings. I mean, most buildings your high rises apartment bill, they're kind of cognizant of the maintenance and care. And what kind of caught me was when they're when the engineers doing their inspection, they're going to look at past repair and maintenance upkeep so record keeping. So, how many buildings really keep a history or a diary of all their repairs, and plus two in statute don't the managing agents only retain copies for three years. I believe it's statute seven. Yeah, so I'm not sure how many years they actually keep and when they actually start dumping stuff, you know, I mean like most offices that you really start keep you really start dumping when you run out of space. Under this statue, you're going to have to keep them for years. Yeah, yeah. So seven year cycle. So you've got to go through this every seven years. So almost like you're retaining records for 10 years, just to keep just to make sure, you know, but, you know, not that storage but now it's another task that people, but it's kind of a good task to make sure you have a history of your maintenance and repairs anyways, for some buildings that don't even kind of do that. You know, even single family homes, usually the plumbers and guys, you need to write the data when you replace that hot water heater, you know, and I go yeah I do that I have a marsh pen and it's marked over there, because I won't remember. I know sometime few years ago, you know, but it's going to be. This is going to be gnarly and I really think they're going to butt heads with the LSE at some point in time, especially with your deadlines, the permitting issue is a big question mark. You know, the permitting issue who's really going to be in charge because now you have two entities. And they might eventually butt heads, and then you've got the boards that got to go okay, where are we in the budget to get this done. And some of it, they may have already. The building count they're not paid. They're volunteers. Yeah, so you know granted everybody DPP those folks are paid. You know, so I'm assuming they'll put a lot of this off on them right because under under the statute, the building council can basically draft rules for these things right and they can establish a fee. One thing I didn't see was any enforcement mechanism. Yeah, so, you know, I'm not sure I'm sure that's coming, if it does actually get adopted but you know one of the things I noticed to was it required that the owner of the building sign a notarized affidavit saying that the required repairs will be completed within the time frame is accomplished. Well, an owner would be the board and how would the board know when you know the answer to that question. I mean I could see maybe their engineer, signing an affidavit but you know and granted it allows for, you know, unexpected delays but nonetheless. Yeah, so many things like that particular aspect that I mean, for me as a condo board member is, say you have a repair project coming up, you know, to address certain issues, but now you have this professional coming in and saying no you need to do it this way. Well, you know we already went through a design professional to deal with this other issue. And we've already got our scope of work defined. We've already got it. So if you have a range plan. Now you're going to be like, we got to make a left turn, you know, and it could throw up put a whole monkey wrench into all the planning that they've done so far. Well, and that's reserve studies are for right. One of the reasons you have reserve studies is so you can see what needs to be done and set aside money for these things and, and, you know, do these various projects ever so many years. So, if you have someone that comes in, if this gets into law comes in, and, you know, says well I found this. Well, it's going to throw a runky wrench into your reserves as well. You know, and it's going to throw maintenance fees sky high. You know, some of these seniors that have lived in their units for 30 years and, you know, we're trying to live like, you know, all I got to do is now is pay my maintenance fees well now, your maintenance fee could be, could be as high as almost, and some are like another mortgage payment. You know, so it's out of control. Potentially, it is potentially that's true. You know, we'll see. I mean, I understand the issue right I mean this was up. This was enacted to address the surfside collapse in in Florida, however, that surfside collapse related to you know it wasn't as I understand it it didn't have anything to do with the exterior of the building. Right, it was the load bearing walls within the structure itself, deep within the structure that collapsed so it really addressed the situation that happened in Florida. And, you know, I mean, like I said, I, I, I understand, you know, that the legislature's concerns, but I really believe they need to give this more thought. Didn't the Florida one also have to do with water intrusion from they had a above ground swimming pool. And that's always a big kind of warms when you have above ground swimming pool. You know, so it's not kind of apples to apples I want to say. Yeah, you know. And I really, I really do think that as a condo board, most of them are very close to the high rises they're very on top of their stuff. You know, I know there's a one condo or it's actually an apartment building I don't think it's actually a condo, but it's in the kiki and it's a corner. And I remember a few years ago, you could see the hat on the night issue, because the railings, I think the railings all fell off. And it's been taking them years to get it fixed I know one unit that's already fixed but you see it ordered up on another one up above. But, you know, some of those repairs are are kind of hard, you know, it takes time, then you got to find the manpower the person qualified enough to do that kind of work. So the only repair you can't just find anybody. Oh no, no it's fall repair is very expensive but it needs to be done. Yeah, I said, you know, most associations are on top of the small issues, because it's in your face, you can see it. And they know that the worst case scenario damage that it could potentially be. So they want to catch it early on so they're not in a bigger dollar amount of even have to do the repair. They know they have to fix it, just like termites. I always compare the two, because you know if you let termites go your, your house could end up collapsing. You know if you don't address it. I mean, just like spalling like all of us better center I'm like, oh, you see the chunks of concrete falling off, you know. What do you think this is going to, going to, going to go. I mean I just, you know that safe and unsafe or safe with repair and maintenance programs. You know, this is just, and I really didn't like the building official makes the final determination. Well who's. Okay, I had that same question and I looked at it in in 107 22. That is a minute. Let me get it here. That is the state building code council that is the section of of chapter 107 that addresses a state building code council and one of the members that's appointed to the council is one county building official from each of the four counties appointed by the mayor. So that building official is who ultimately is going to make the decision on any appeal. So the appeal goes to the building council, the building council then makes a recommendation to the building official and the building official makes the final determination in the event that there is an appeal of a particular report telling the owners that there is an unsafe condition in the state. You know I might get slapped for saying this but you know they're all volunteers but they're all within the industry. So, but you know they're all within the building industry right, but I mean I can see it being very one sided, because they want the jobs. So of course are you really going to get a fair shake, a reasonable shake, you know when there's, there's an issue, you know, you know, I was looking at the testimony submitted today on House bill 1784. And there was testimony submitted by it appears that this this gentleman is an engineer by profession or an architect, and he was saying that in the Florida case. The engineer was actually sued by the owners of the surfside condominium, and they won. And the issue was that they alleged that he failed to tell each individual owner, what he found in his report. Although it's my understanding he told the board. They were saying he was he was required to tell each individual owner, and they were successful they sued him and succeeded, I mean, I don't know if that's correct. You know because that that seems like that case was litigated quite fast. Yeah, yeah, that to be happening but nonetheless. I mean, you know that engineer was sued. So, you never know, but you're right we have a shortage of engineers in the, in the state already and many of them are are currently consumed with these life safety evaluations so because the last time I looked on DCCA there's only a handful of licensed engineers. I want to say they're like only 20 of them. There's not that many. There are many buildings within the state that are greater than five stories. Yeah, yeah. This is really gonna. It's throwing everybody. This is going to throw everybody in a tizzy. It's, it's not good. So when do you know when the next hearing is going to be on this. Well it was today at one o'clock. So as of right now maybe it's been deferred, you know, but if it passes, then it's going to cross over to the Senate. So companion bill in the Senate that died. The 20003 I think it was right. Yes. Yeah, Senate bill 203. So, I think we're almost nearing our time, but I really want, I think both Larry and I want to leave this segment with a question to our, to our audience. What is going to be the impact of this bill on your own individual condominium. Everybody's going to start thinking about it. Because I think that's something like this is going to come up every single year in the legislature. It's going to go away easily. There's always going to be a variation of it. Because of what happened at surface. I mean it's just like what happened with Marco Polo and the fire. It's, you know, there's always going to be some new way, you know, a little warmy way that they were going to want to do their fire department, or even their building stuff. You know so it's not going to go away. We have to be prepared and start planning, making sure we have our documents in order to prove that we've done this this and this, you know, or what our planned intention is our long range goal for this this and this. So they can really see that we're addressing it that the board is cognizant and they are addressing it. You know, and I really think, I really think, you know, the majority of our condo buildings are are are really cognizant of their building and really take care of their buildings, you know, for the most part. You know I'm sure there's some that are like little lackeys but you know for the most part I think the majority of them do. They make that concerted effort to do it. It's a valuable asset. Right. Yeah, and it's, you know, I mean nobody wants to have your building fall apart then you're like, houseless. You know, and your assets literally disappeared. The money you paid into it is gone. You know, you may never ever recover that. So any last words for our condo boards coming from an attorney. I would just say keep an eye on this bill. Go to the legislative website today and see what happened with that bill if it was deferred or if it passed out with amendments, and if it passed with amendments or even passed as drafted. Then we need to continue to keep an eye on this and definitely submit testimony, provide your two cents. Yeah, we, I mean, everybody has a voice and we really need to get those voices heard. I did read some of them. I think one said good luck, or something like that I kind of talk about that one, you know, but there's, I mean, the majority of them were opposing. I didn't see anything that was really any that was really positive everybody was really opposing and they also brought up the stuff that they already have to do with the LSEs. Yes. So, okay, Larisse, I really want to thank you for bringing this bill up and being on condo insider with me. And I hope to see you soon. I hope to see you on testimony. Absolutely. Thanks for having me. I appreciate it. Thank you having us have a nice good afternoon. All right. Thank you. Thank you so much for watching think tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter and LinkedIn and donate to us at think tech Hawaii.com. Mahalo.