 Good morning. Good afternoon, rather. Welcome to Kondo Insider. This is the show about association living. And because about 30% of the people who live in the state of Hawaii live in condominiums, we hope we have subjects of interest that would be interesting to the people who are watching our show. And I have today with me a good friend and colleague, Richard Port, who's been very active in Kondo legislation and advocating for owner's rights. Richard, can you tell us about how you got involved with the advocating for Kondo owners? Well, I've lived in a condominium since 1974. And the first few years I was busy with my life, you know, my work. But around 1981, I decided, well, I didn't like particularly all the things that were going on, so I decided to get on the board. And with the exception of about three years since 1981, I've been on the board of directors at my condominium. So that's been, that's almost 35, over 35 years. That's correct. Oh, okay. And basically, I started going up the legislature asking for changes to be made to the Kondo law. And in some cases, I was successful. And you did serve on something called a blue ribbon panel? I did. And that's a volunteer organization that's established by the state of Hawaii real estate commission, which is the agency that has oversight over condominiums. Yes. And it's a means of making changes. So it's a good thing. And so what types of things did you do on the Kondo, on the blue ribbon panel? Well, the two originally when condominiums were established by the legislature back in 1960s, there were two real, as far as management was concerned, was elections of boards of directors for condominiums. And secondly, information that owners were entitled to. So everything, almost everything that has changed since then has related somehow to improving the election process, making it fairer and providing more and more information to owners that they need to know in helping them to elect directors. So I feel that the laws have improved a lot since that time. There's always room for some marginal improvements, but the laws are pretty good. It's the enforcement. And I think that's what we're going to be talking about today. It's being able to make sure that the laws are being faithfully upheld. And our topic today, we're going to be talking about dispute resolution. So dispute resolution means that we're talking about trying to resolve disputes between Kondo owners and their boards or their property managers or even between owners or maybe between board members and their boards. But in other words, disputes between people who live and work in the condominium community, right? Can you tell me how long this issue has been around? Well, when you put a lot of people in a relatively small space, there are going to be disputes. They may relate to noise or, well, noise is always a big one, but it can be anything from smoking or it can be a lot of things. As it relates to boards, boards oftentimes feel that they're doing the right thing for the owners, but sometimes the owners dispute that and sometimes board members dispute among themselves. So the effort has been made by the legislature and you've played a major role in this to try to find ways to resolve without having to go to court or worse, going to the legislature to get the laws changed. Can you tell our audience what kind of disputes is it that need to be resolved? Well, as it relates, it's how money is spent sometimes, trying to avoid special assessments because there's not enough money in the reserves. We have reserve laws, but sometimes they may be not as strong in some cases as they need to be. But in any event, it's usually dispute over maintenance fees and assessments and loans. Or maybe it's about enforcement of the house rules? Oh, yes. Oh, sure. In fact, that's what I was kind of hinting at when I talked about noise within the building. Or it might even be what hours the pool should be open. If there's a pool in the condominium. So it can be a wide range of things that can suddenly make for a dispute. And why do you think there are disputes that need to be resolved? Well, I think really in a general way I've answered that because basically you put a lot of people in a relatively close quarters and you set up a situation where you have actually a legislative body called the board of directors, which makes the laws, enforces the laws, and it's a lot of power. Boards have quite a bit of power in comparison to, let's say, a state legislature or a city council. In fact, boards of directors are kind of like a city council with the president of the board becoming sort of like the mayor or the first among equals. And that produces some, you know, personalities can play a role. Sometimes you get wealthy owners who move into a condominium and they try to throw their weight around so that could be one kind of thing. Or I remember one president who was a retired captain in the Navy. Now, captain in the Navy, you know, there's a lot of power to that. And as board president, he tried to throw his weight around, sometimes maybe a little too much. And so when you, I mean, I hear you're talking about people, you know, maybe being aggressive or maybe, you know, taking advantage of their power. I mean, it sounds like maybe there's not a whole lot of communication. And maybe that's one of the reasons why there are these dispute resolution mechanism. We would just spend a minute on communication. The board generally has the power of communicating. They have newsletters that they can send out to the owners. And they should, by the way, they should be sending out information, especially if they know some big project is coming out, coming up at the condominium. They really need to give owners some advance notice of that. And they have to remind owners of some, without making it a scolding, they need to remind owners of some of the important rules, like parking in your own stall rather than somebody else's stall, or overstaying your parking in a place designed for moving in and out of a building. So whatever that is, communication is terribly important. And I know you and I have, you know, gone to the legislature, you know, quite a bit. And, you know, what I think you will agree with me, what we've seen almost every year, there's always some type of bill that a legislator introduces because he has, he or she has gotten complaints from their constituents about boards of directors who aren't communicating. That's why you have bills that seek term limits, right? Because people think that if you limit the time that people can sit on a board, that somehow, magically, the communications are going to get better. It's not that simple, of course. But those bills always happen. Absolutely. Right. What other types of legislative action happens because of this failure to communicate or trying to resolve disputes? Most bills revolve around either the access to information or the elections. So that means that a unit owner wants some information, like what? Might want a contract that's been signed for a million dollars. It's already approved contract, been approved by the board, and they want a copy. They're actually entitled to a copy as long as it's closed. In other words, that the contract has been approved. Obviously, if the contract is, there's multiple contractors trying to get a contract, that's not the time to provide owners with the contract because they're still trying to resolve which company to select. But owners should be able to get a contract after it's signed. Why would they want to look at a contract? Well, they may want to find out what the specifics of the work that is to be done, especially if it's a big contract, and maybe they see as the work is being accomplished, they see some strange things happening, and they're wondering, was that part of the contract? So it should be automatic that they can get a copy of the contract. What other types of information do owners usually want to get? Mostly it has to do with financials, either general ledgers or monthly financials. Monthly financials has become somewhat less of a problem because a lot of condos now have websites, and they put that information on the website. In fact, communication has improved over the last two or three years in a lot of condominiums because a lot of them do put up on the website the minutes of meetings. That's another thing. They may simply want the minutes of the meeting so they know who voted for or who voted against something. That helps them when they decide later on who they want to vote for for reelection or future elections. And isn't it true that some of the complaints you've heard is that people, owners who go to their boards, can't even get board minutes? Yeah. And it was very common for that to be a problem ten years ago and even maybe five years ago. It's a given. They're entitled to that information. It says so in the state laws, and we're probably going to get into what do you do when you can't get minutes or you can't get financial statements. That's where the real problem comes in. And those are the issues that need to be refined. Okay. And other than, you know, let's just go to, well, you know, the legislature did enact dispute resolution. They allowed for mediation. And then if you can't resolve an mediation, you can go to arbitration. And there have been other attempts to try to mediate disputes. Do you remember one about the condo court? Oh, yeah. Actually, let's go a little further back and say, look, initially, there was the straight mediation. And if that didn't work, you could go to arbitration, or you could go to court. And a court is very expensive. And also the court really preferred not to have to deal with these little disputes in what they perceive often as little disputes, although they can be big disputes within the condo. So the courts would like to keep all of that stuff out of the courts. And so there was what we called a condo court. And that, well, I think you would be better able to describe what happened in that case. But we've come to the most recent stage is qualitative mediation. Evaluative. Evaluative mediation. You might want to mention what happened on the condo court. Right. Okay. Well, we're coming up to the break right now. So we're going to take a few minutes and we will be back after the break. Hello, this is Martin Despeng. I want to get you get excited about my new show, which is Humane Architecture for Hawaii and Beyond. We're going to broadcast on Tuesdays, 5 p.m. here on Think Tech Hawaii. Aloha, everyone. I hope you've been watching Think Tech Hawaii. But I'm here to invite you to watch me on Viva Hawaii every Monday at 3 p.m. I'm waiting for you. Mahalo. Hi, I'm Chris Leetham with The Economy in You, and I'd like to invite you each week to come watch my show each Wednesday at 3 p.m. Hello, I'm Marianne Sasaki. Welcome to Think Tech Hawaii, where some of the most interesting conversations in Honolulu go on. I have a show on Wednesdays from one to two called Life in the Law, where we discuss legal issues, politics, governmental topics, and a whole host of issues. I hope you'll join me. Okay, we're back. We were talking about dispute resolution and how come we can't seem to get some type of resolution for these disputes between condo owners and their boards, which have been ongoing for as many years as you and I have been involved in the legislature. And the legislature has tried very many times to resolve it. And I think before the break, we were talking about condo court. And condo court, when the whole concept started off, I think it was John Morris, who was the first condo specialist, who came up with the, who found the idea. Some were in New Zealand, they were doing it. And they used something like a small claims court here, but it was a judiciary system. And people would just go and file their $25. And it would be a one page complaint and you would get your day in court, but you wouldn't, it wasn't subject to appeal. And you would tell your story to a judge. There were no rules of evidence. The judge made a ruling and that was it. And that's what we kind of envisioned. Do you remember all the trouble we had trying to get it through? And then we couldn't get the judiciary to basically adopt it. We ended up with the DCCA administrative hearing system. And I think that was kind of like a disaster because it just resulted in like a mini court. I mean, you had lawyers and you had appeals. And you had people who really didn't understand condominiums and who weren't really judges making these decisions. So it was not a good result. And what happened? Well, one of the things that happened is that a lot of times woods would refuse to participate. Right. In fact, that's one of the problems, isn't it? Yes, it is. Trying to get the parties into the same room to resolve the disputes. And the whole, and I know somebody asked me once, why is this important? And it's important that we have a system where these things are resolved quickly and cheaply because everybody lives together in this condominium. And that, you know, that means that, you know, it festers. If it's not resolved quickly, then you have neighbors talking to neighbors and then you develop factions. And it just becomes a mess. And then if you can't resolve it in mediation, you get to arbitration, you get to litigation, and then you've got attorney's fees. And it's very expensive. Very expensive. For what should be able to be resolved at a lower level. Yes. Now, and so the counter court didn't work. It died. It died. And then we came up with evalutative mediation. And evalutative, can you explain to us about evalutative mediation? Well, initially, I didn't think that was going to work either. But it seems to me it has real promise. But I think you're probably better off explaining how that works. And that's where both people show up, the old homeowner and the condo board, and you get a retired judge who listens to both sides and basically says, you have a good case or you have a bad case. And then usually it is resolved. But that's only been in effect since January, July of last year. Yeah. At least if you know that you have a good case, if this retired judge says, you probably would prevail that then the other side and tells the other side, you know, this is not a good case for you, then there can be an effort to try to resolve the dispute or just let the dispute go away. But the problem is, is you've got to get both people in the same room. Oh, that's true. Absolutely. And that's still a problem. Right. Even though the statute says shall, the mediation statute says thou shall mediate. But then because there is no, there are no sanctions. And Richard and I, Richard Emory, who is my co-host on the show, you know, we vowed to go to the legislature to put teeth into that mediation statute. Yeah, at least something that show, you know, at least it'll be a little bit of a slap on the wrist if they don't. And you know, the two, two things that have been suggested to us about it. One is to say, to add into the statute that if you don't show up for the mediation, whatever the other side is claiming is, you know, that person wins by default if you don't show up. That seems reasonable. Right. And if you want to set aside the default, you have to have a good reason. And that's reasonable. You have to explain why you fail to appear. Right. And so that's one. And you know, with mediation, with evaluative mediation, each side pays $350. And you go and you have, and the state of Hawaii has contracted with dispute prevention resolution, and with two other commercial mediators, and they are trained. And so you're talking about people who are qualified and who have background. They know what evaluative mediation is. And so they're going to do the process. The problem is trying to get people into the room. And the second sanction that somebody has suggested to us for the mediation statute is, is if you go to this mediation, if you don't show up at the mediation, then next step under the statute for the dispute resolution process is arbitration. So if you don't show up for the mediation and you make the other side go to arbitration or to litigation, if you don't eventually prevail, you pay for all the other sides, legal costs, and legal fees from the time the process started. That would be a sanction. In other words, the whole purpose of the sanction is to get the people into the room when the cost is only $350. Right. Right. And to get because I'm all for, I'm in favor of both of those. Right. Because if you get people into the room early on in the dispute, it's easier to resolve if it festers for six months, seven months, eight months, by this time people are angry. And they're angry because the other side has not listened to them or expressed the desire to even try to resolve it. And they basically think, oh, they don't care. Right. Or they're so arrogant, they think that they don't have to participate. I think the opening statement you made is 30% of people are living in condominiums. And that means that there's a lot of people affected by these disputes. And it's critical that we find a way to, at the lowest level possible, to resolve disputes. And I think I told you before the show that I got a call today from somebody in Hawaii Kai. And they're an elderly couple in their 80s. Their issue is noise. They live next door to some people who are noisy, 24-7. And they have tried being good neighbors and taking cookies next door and trying to talk to them and say, please, please, will you be quiet? I mean, because we need to sleep. And you're noisy all the time. And that didn't work. And they're renters. And when they found out that the reason that they're staying there is because they didn't want to be penalized, this couple actually offered them $4,000 to pay the rent so that they could go out and find a new place. And they decided they didn't want that. They wanted $20,000. And so here's this elderly couple, they're living with, and they complained to their board. Their board won't even write a letter to the unit owners to say, your neighbor is complaining about the noise. And there is a house rule. Every kind of minimum has got a house rule about noise. Okay, so now they're at its end, so they decide they're going to sell their unit. And they hire a realtor. And the realtor comes and looks at the unit. It's a nice building in Hawaii. And the realtor just says, you've got a beautiful unit, but I can't sell this. It's too noisy. And nobody's going to buy it. And they showed me a letter from the realtor telling them that unit is too noisy, and they can't sell it. And they have their, the call I got today is, can you refer us to a lawyer because we're going to sue our board? So that's, that's where we are with the, you know. Yeah, no, so it's very important that we try to get the legislature this year to tighten up the law and try to encourage boards and owners to resolve these disputes. You've heard, this year they tried an ombudsman bill. And this is not the first time. Sure. And you know what an ombudsman bill is. The bill basically, I mean, it varies. I mean, one year it was somebody in the attorney general's office. This time it's somebody in the DCCA. But it's basically a bureaucrat who people make complaints to. And then that person uses the resources of the state of Hawaii basically coming from the condo education fund. I think we, I think really the, we would all prefer to handle this at the lowest possible level. But maybe what we need to do is to say, look, if we can't get boards and owners to come up with a process that's fair, that maybe we're going to end up having to resort to an ombudsman or, or somebody in the Department of Commerce and Consumer Affairs who takes a little more proactive stance. I'm not saying that that's the answer. But what I'm basically saying is we have to, over the next few years, to resolve as much of this as possible. Because where it is today, there's just too many disputes going on between boards and their condo owners and condo owners among themselves. And, and that's probably wasted energy when they could be concentrating on trying to deal with the issues that affect the repair and maintenance of the building. Absolutely. Right? Rather than dealing with people who are unhappy because they think that the board is not dealing with their issues. Right? Yeah. Well, with an ombudsman bill, what would you think of a voluntary, of a, of a, instead of having a state official having people in the industry like retired property managers or even somebody like you to, to volunteer, you know, to be an ombudsman, that way, you know, we're not using state resources. We're using like a volunteer, like the, like the neighborhood justice system who do, who do mediations. And basically letting people know what their rights are and what their rights are not. In other words, yeah, you're, you're, I can see maybe the example I was trying to use earlier. If you're trying to get a contract that's already signed, the board should be told, hey, that's what the provision in the law is. On the other hand, if they're trying to get the three bids and they're not on the board, that information is not necessarily something that they should have. It's, that's what you have the board for. The board is elected by the owners. So while I agree that there are some things that owners should actually be able to receive, I think there are other things that the purview of the board of directors. Okay. Well, we're running out of time, but I guess, I mean, this is probably not going to be the end of this discussion because it, you know, as, as you and I know, for all the years we've spent in the legislature, this one always comes up. This issue never seems to go away to the satisfaction of the unit owners. Well, I shouldn't let this time go by without congratulating you. You don't get paid for any of this work that you do. It's all voluntary for, is it 30 years? It's anyway, it's a long time that you've been involved. But you have been my, my, my buddy in the legislature for all those many years. So you need to be congratulated too. Thank you very much though for spending time with us. And, and next week we're going to be talking about issues relating to aging in place. So I hope that you will join us at that time.