 Good afternoon and thank you for joining us for another episode of Condo Insider. My name is Jane Sugimura and I'm your host today. And Condo Insider is a show about condo living and for people who live and work in condominiums. And I'm really pleased to have as my guest today, Senator Sharon Moriwaki of Sena District 12. Thank you for coming, Sharon. Well, thank you for inviting me, Jane. So glad to be here with you. Can you tell our listeners what areas do you represent? Certainly. It's the most condo dense district in the whole state. It covers Kakaako, Waikiki, Alamoana, Makali, Mo'ili'ili in the Sheridan area. And you, in fact, live in a condo, don't you? I do. I do. I live in one waterfront towers in Kakaako. And are you still on the board? I am. I'm the vice president of our board. Oh, OK. And because you live in a condo and you sit on a board, I mean, you have a lot of personal experience and knowledge. I certainly do. I certainly do. Good and bad. Good and bad about things that happen in condominiums, right? Correct. Yes, I do. And the reason why you're here today is you're going to be talking about the Senate resolution that got introduced last week, Friday. That's Senate Concurrent Resolution 204. Correct. Right. And the title of it is relating to mandatory education of board members. Can you explain to our listeners what is the Senate Concurrent Resolution? Certainly. Senate Concurrent Resolutions back up. Resolutions are different from bills because the bills will have, we want a new program and so much money. And the resolution requests different departments, different organizations to do something that we think is important. Usually task forces to study a problem. In this instance, it is a task force to look at how we can better train our condo board members. So a concurrent resolution. There's a single resolution like an SR, like this has an SR companion, and also an SCR. An SCR is a Senate Concurrent Resolution, which means both houses, the House and the Senate, will have to pass this resolution. But it's a stronger resolution because it's saying both the House and the Senate want you to do this. So how can you explain the process? How does the House get to vote on it? OK. So what this is, it's going to introduce it just last week. We offered it. And now it's been referred to the Consumer Protection Committee. Because it's a Senate Concurrent Resolution. So it starts out in the Senate. So it will be introduced and it will be heard, hopefully, in the Senate Consumer Protection Committee. After it's heard, it will go back to the floor. It gets adopted and then on the Senate side. But then it's going to be crossing over to the House side. And the House will do the same thing. It will go to a committee or committees. And once it passes there, it becomes law. It becomes a resolution. So we're in the beginning steps of this process. But it will need the two Houses to concur and ask the different agencies to work on this project. Can you tell our listeners why you introduced this resolution? What were the reasons why you decided to do this resolution? For a couple of years, we've gotten people coming in, complaining about their boards, members of their boards. Some boards are better than others. Some boards have members that think they can do whatever they want on the board. So we've had a number of complaints. And some have asked whether developers can be prohibited from a board. Others have asked whether we could limit the term of board members. And so there are different ways in which people have come up to complain about board members and what they're doing or not doing. And some of the lawsuits, quite frankly, have come out of these altercations or disagreements between association owners or apartment owners and board members. So I thought that this was a good idea to at least begin a training program so that board members could be trained. But rather than us dictating what it is, the resolution is requesting the real estate commission that administers this to form a task force of stakeholders to look at what would it take. And you've been told, too, I think, because in our discussions, when I discuss some of the issues with you, you've been told that Hawaii has got the largest number of claims made against boards of directors. We have more claims in Hawaii than in any other state in the country. And that the claims that are being asserted are higher, like if it's a breach of contract claim, if an owner is claiming that the board breaches fiduciary duty on the mainland, that claim might be for $25,000. In Hawaii, it's $40,000 to $50,000. So not only do we have more claims in Hawaii, we have higher claims. And we've kind of driven the carriers out of the state. Sue Savio, who represents a lot of these condominium associations, has told many groups that I've heard her speak in front of many organizations, including ours. And she's told us that we've got two or three carriers who do the DNO coverage. And so now all of us condominiums are all in the same risk pool. So if somebody gets sued and they have to pay a lot of money and the insurance company has to pay, our premiums go up. And what members don't know is when they sue each other, because they like to sue each other, they don't realize it's association that's paying the attorney's fees. And so everybody is paying for it. And it's not just me getting something which they do when they win these cases, as you say, big claims, that it hurts everybody in the condo. And I think that's the other thing, Jane, is that condo living is different than having your own home. And people are buying into condos and thinking, I can do whatever I want, like I have my own home, single family dwelling in. And it's not. You're living in a very close community. And people have to realize that with that comes responsibility. And I think this is part of the training is not only for board members, but for board members to also realize they represent 200 other people or 300 other people, sometimes 1,000 other people, and what that responsibility entails. So this task force is to ferret out all of these issues that come up year after year after year. And even though this task force that is contemplated by this resolution, it's supposed to be looking into education of board members. Aren't there already resources out there that board members and condominium owners can take advantage of? I know our organization gives seminars, CAI gives seminars, and all the property management companies, the large ones. And even the show. They do board training. This show is open to the whole community. Yeah, and condo, the condo insider, these shows, I mean, anybody can watch them on any device. And they're free. And so there's these shows. And the state, they do condorama, and they have a wonderful website. I mean, I keep telling people about the real estate commission website, and it's a free resource. All they have to do is get a computer, go online, and it has all this information, including the statute. And if the people who don't know what 514 looks like, they can go on the real estate commission website and find the statute, find what the current laws are, find out what programs are out there that are available to dispute resolution. And in fact, the condo ed education fund subsidizes mediation and arbitration. So they don't even have to pay for it. So these are programs that are already available. So why do we need to do a task force? Well, I think it's because, well, let me back up also, is that in talking to the real estate commission, they have all this money, as you've seen in the media. And they have a mediation fund so that if you have contested cases between owners and the board, you would have a cheaper way of resolving your disputes. But even then, I think last year, they had only 28 clients or cases that came up when it's so inexpensive and you can solve the problem without having to go to court. And you would have a more amicable community in your condo, but it's not being used. So I think it's the people who need the help or need to be trained aren't coming forward and aren't going to these training sessions and what is available for free to help them be better board members. So that is part of the effort on this task force is how can we make it? And I hate mandatory kinds of training, but if in fact it's not happening and we have so many condos and so many people who need to be at least alerted to what their responsibility is as a board member, that we're looking in this task force at how can we do this so that it does bring out if you're not qualified because we're all volunteers, how can you be trained so that you become responsible board members to really help your condo thrive and have a more harmonious living environment? Right, and I think what we were talking about too is there's all these resources and seminars and training programs, and the people who come to them are not the ones who are participating, serving as on the bad boards. It's the ones who don't show up and I guess this is one way of trying to require them to show up. At least, I think one of the proposals and there's some dispute about this among the condominium community, but this task force would also be looking into a requirement, some legislation that says if you don't take the mandatory education, you can't serve on the board because we don't want you on the board unless you go through this program. And so how do you feel about that? As I said earlier, I don't like mandatory, but I think in this instance, because we're all volunteers, that this is a way of, I think even the owners when they're voting and you say, did you go to the training or not? And they say, no, I don't have my certification. It gives owners kind of, okay, hey, if you didn't go to the training, why should I vote for you? So there's other ways that this will be very helpful because then owners have some gauge by which they vote because right now you just vote for whomever. And a lot of times people don't want to step up to the plate because of the, I guess their perception that there are liabilities or there's too much work, but if they're trained and they see what the responsibilities are, I think it's better for us serving on the board as well as the owners to see, hey, I've got a qualified board there. Even if they're volunteers, they know what they're doing. And I think that's really critical because in some of the training, we're also told you're not there just to keep the maintenance fees down. You're there to be good fiduciaries with the condo money so that you're actually taking care of your condo like it's your own home on behalf of everybody. So I think those are the kinds of things we'd like to train board members to know. Right, and before we go on our break, I know when you were talking about, people would look to the fact that somebody was trained in voting for them. And in Nevada, that's the fact that they do, they will certify board members. And it's just a certificate to say that you've gone through the training. And it doesn't mean that you have to have a certificate to serve, but what it does is it tells people that you've gone through a training and you have a minimum level of training so that you're qualified to serve on a board. And that might be something that we might, Hawaii might want to emulate because I'm told that Florida has a mandatory education system, but that one has some problems. But the Nevada one has a certificate where people are issued certificates and that's just used to show other people that they have a some level of education and training to serve on a board. And I think that that might be a better way. You could say this is voluntary, so it's not mandatory, but if it's voluntary and it's a certificate and when you run, when we all run for positions, we can say I have a certificate and that should carry a lot of weight. And so you could even make it voluntary, but if you have that, you know that this person really is qualified and is so committed that they're willing to go through the training to get certificated. So I think it might be another way to skin that cap. Yep, okay, so we're gonna take our break right now and come back in a minute, I think, and we'll go on and talk about who serves on this committee. Aloha, I'm John David Ann, the host of History Lens on Think Tech, Hawaii. History Lens deals with contemporary events and looks at them through a historical perspective or what we call a history lens. The show is streamed live on thinktechhawaii.com. Thanks so much for watching our show. We look forward to seeing you then. Mahalo and Aloha. Welcome back to Condo Insider. And today we have as our guest Senator Sharon Moriwaki and we're talking about Senate Concurrent Resolution 204. And that's the resolution regarding mandatory education of condominium board members. And that's been recently introduced. And right now we're just waiting for a hearing on the bill. Sharon, who's gonna be on this committee, on this task force? We're trying to get as many of the stakeholders who would be affected by this. So it's the real estate commission, of course. We're asking the real estate, chairperson of the real estate commission to chair the task force. Some of the training associations, the Community Associations Institute, the Hawaii Council of Community Associations. We also have organizations that are advocating for the owners of associations. So we're asking that a member of that, a representative of that group as well, property management companies, the Hawaii Associated Realtors, the representative from the insurance industry, of course, and a member from the Senate and the House, and also stakeholders that may be interested and have information that would be helpful to this task force. And what kinds of things are these people, the stakeholders, this task force, what are they going to be considering? Well, we're looking at curriculum. What are the real essential kinds of things that any board member should know from whether you're governing documents? What are your fiduciary duties? What is the code of conduct? What is the kind of conflict of interest? Here as a board, you make decisions as a board, not go around and talk to everybody and as if you're making the decision. Business judgment rule versus just getting the maintenance fees down. And confidentiality. The board has a lot of contracts, may have disputes, all of that should be confidential. And so those are essential, essential information and competencies that I think the board member should have for the best interests of the board. And you know, the good thing about this task force is you've got the stakeholders already there. You've got representatives of the association, you have the property managers, you have the realtors, you have representative owners, and you have the DCCA who has statutory oversight over the condominiums, right? And I know from meeting with the real estate commission, I mean, they're saying, oh well, CAI has this course, it's ABC, which is the introductory seminar for new board members. But when we met with them, we said, the ABC course is good, but you've got to add to it because lots of things happen. And you as a board member know that there are issues like employment issues, like I know on my board, I have board members who think they can go and tell an employee how to do their job. And that's harassment. And you can't have even owners, owners who live in the condo, right? They think because they pay maintenance fees, they can go out and tell a maintenance person how to do their job. And I'm a board president, I've had to write letters to our owners and to our tenants to say, you can't do that. I don't care if you pay maintenance fees, you're not the employer. My board members are not employers. The employer is the association acts and the association acts through its board as a collective body. In other words, you can't have somebody go out because I had one of my board members do this and I was appalled. It went up to a contractor and say, my name is so-and-so and I'm on the board of directors here. I mean, that's a no-no. You just don't do that. And we need to train board members that that's the kind of conduct that gets us into disputes. You know, because you have- Not only that, it could cause your association a lot of money because there might be a lawsuit if you really overstep. Right, and I've explained to my board in those employment issues, you know, we as a collective, and once we leave the board room, right, you really have no authority. And so you can't be going out and say, hey, I'm Mr. Big Shot and I sit on the board and so I'm telling you how to do your job. And if that employee somehow decides, oh, well, that's very stressful. I mean, how would you like somebody to come up and say things to you that kind of jeopardize your job? And you know, that's very stressful. And if they take a workers comp claim, then the association is stuck with an employee on a workers comp claim because of stress, because of some board member or a resident, you know, went up to them and criticized them as how they did their work. I mean, that's why we got to train people, you know, so that these things don't happen. And these are common. I mean, I mean, when I talk to people, I'm saying, oh, yeah, they've had that same problem in their building. I don't know what makes people think that, you know, that in an association, if you're a resident or a board member, you can go out there and talk to the staff or to contractors and basically tell them how to do their job. No, I mean, I agree 100%. I see that. Yeah. And so that's part of the training. It's part of the training. I mean, it can't be just the ABCs of how to run a board meeting. I mean, you got to look at the nuts and bolts of, what do board members face, you know, when they do their jobs? And so it also means how to do a budget, right? How do you do a budget? When can you do an assessment? And if you want to do an assessment, what things do you have to do? And maybe that's the time when you tell the board, well, you know, if you don't know, you got to call your condominium association attorney to explain to you what the statute allows you to do. In other words, you just can't muddle through it on your own. And, you know, that's what we want. I guess we want board members to learn, right? And this business judgment rule is really important because a lot of times you think you know it and so you make a decision on behalf of the 300 some odd people in your property and you know, you really should be relying on attorney, should be relying on professionals to give you, you know, a good judgment so that you do have the information when you make the decision and not just on your own. Right, and so, and then there's many things like, you know, now we have issues with fair housing and discrimination and service animals and emotional support animals and all the issues that, you know, evolve out of, you know, those things, you know, I mean, and all of us, you know, are going through these issues. And I think we need to teach board members how to deal with them because there was that recent lawsuit in Maui where the jury came in with a $2.9 million decision and I found out from it by reading the paper I'm thinking, oh my goodness. And so I started looking into it and what happened was you have a board who denied a resident, an owner, a reasonable accommodation because he had a visual impairment and you figured, how could that happen? How could, and the way it happened is because you have a board who didn't have a clue and you had a property manager and this was their first client and so they knew nothing about discrimination and fair housing and they got a condo attorney, their attorney who was assisting them didn't know that fair housing applied to condominiums. And so you have this perfect storm of incompetence and ignorance. And you end up with, you know, an owner, occupant resident who went through two years of hell. I mean, the lawsuit that resulted in the $2.9 million judgment, I was told by the attorney who represented the plaintiffs that he filed the lawsuit on the day that his client's unit went up for closure because the association, because they wouldn't remove the wooden floor for which, you know, he asked for a reasonable accommodation because he had this visual impairment. I mean, because he wouldn't remove it. They were finding him $200 a day. Oh my. And then they went into foreclosure and so it was on the day they were gonna sell his unit is when the attorney filed the lawsuit and the jury came in with a $2.9 million judgment. And you know, and that's something that I found out from the attorney that the association's carrier paid the judgment. We don't know what the judgment is because I think it got adjusted but that's all confidential. But the newspaper said it was a $2.9 million judgment. And to me, that was a lawsuit that should never have happened. Well, and that's, I think, going to the whole idea of this task force coming up with a curriculum and coming up with training and certification so that you don't have that kind of situation. Because I think that is a problem, not only for the individual who went through so much but also for the whole association that didn't know what was going on. And now they're having to pay for that cost, which is both in terms of the individual who was discriminated against as well as the money judgment against the association. I'm sure they're gonna have to have a special assessment or something to pay for that. No, in that case, the carrier paid for it, but I'm told that it's questionable whether or not they can get coverage. Because I hear they're looking for coverage. So that's another downside. I mean, you get into trouble and if the insurance company bails you out, you're not gonna get coverage. Or if you get coverage, you have to go to somebody like Lloyds of London and pay an arm of the leg. You pay a lot, high premiums. Right, so hopefully this task force, so what is expected of this task force? Once they have their meetings and have their discussions, what is the end product from this task force? What I would like to see out of it is a curriculum is looking at all of the, who pays for it? How does it get paid? Is it the condo we have? We do pay every other year into the condo training fund. So how is that allocated? How are we gonna distribute it so that we really do have the certification and maybe we'll have to pay for a staff in the real estate commission that oversees this and gives the certificates out and manages this program. But I think it's a really well worthwhile program. The task force is to identify all of these components of the program so that next year we can have legislation, not only for what the program would look like, but what the funding would look like. And if we need staffing so that this really becomes a strong program to help condos in the long run have better boards and better associations. I think that's what we're all hoping comes out of this. And so we're very grateful for you introducing this resolution. And we look forward to working with you and the other members of the legislature to see that it passes out and it actually gets implemented. So thank you so much. In terms of that, so this is SCR 204. It really helps when the public writes in and submits testimony. We like to hear that we read everything that comes in. So the more that we can get people to testify and you can go online to the capital, www.capital.hawaii.gov and you can sign in and please submit testimony if you think this is a good idea. Well thank you so much for coming and being our guest today and telling us about Senate Concurrent Resolution 204 and we're gonna look forward to seeing it pass out. And we'll be reporting to our audience at some future condo insider as to what happened. But right now that we've run out of time, thank you so much Senator Moriwaki for being our guest today and please join us next week when we're gonna have another condo insider dealing with condo living and thank you for joining us today. Mahalo. Thank you.