By Deborah Goonan, Independent American Communities
Add the Aloha State to the growing list of hotbeds for proposed HOA and Condo regulation.
Property owners are fed up with having their money stolen and squandered. They want their HOA boards and managers to be held accountable, but also want to avoid prolonged, costly court battles to uphold and defend their private property rights.
Will the State Legislature take the opportunity to seriously consider any of dozens of bills proposed this year?
If and when HOA legislation is considered, some proposals on the table include:
- Establishment of a state Ombudsman
- Addressing board member conflicts of interest and prohibiting voting in executive session
- Mandatory Education for board members
- Non-judicial foreclosure reform
- Licensing property managers, and more.
Of course, representatives from international management company Associa, a key power player of trade group Community Associations Institute (CAI), is already opposing all of these proposals, and insisting that problems in Association-Governed Communities are isolated incidents. CAI community association managers say there are already several laws on the books to protect home and condo owners.
That’s technically true.
But the problem is, HOA and condo association statutes are weak and unenforceable.
For example, the law says that, upon request, all owners are entitled to review and obtain copies of official financial records, meeting minutes, and other official documents of their associations.
But what happens if the Association fails to honor the owner’s request for access to information?
A property owner’s only option, at this point, is to file a civil lawsuit against the association. It’s expensive and time-consuming, and opens the door for the association to file a counter-complaint. I have heard from many owners faced with (baseless) counter suits for harassment, because they had the audacity to ask questions and make numerous written requests for disclosure of financial information.
Without any practical way to enforce this law, owners have no guarantee that they will ever be permitted to see how their money is being spent, or how their board members are voting on important matters.
And very few homeowners are able and willing to spend thousands of dollars on attorneys and court costs, in an attempt to force their association to comply.
So many owners will give up in frustration.
Of course, when financial records are not readily shared with owners, and board meetings are held in secret, that is the perfect environment for opportunistic self-dealing, embezzlement, theft, and fraud.
But none of this seems to matter to CAI and its multimillion dollar management corporations. More proof that the industry trade group does not serve the interests of homeowners and residents of Association-Governed Communities.
With this in mind, read the following two articles and watch the video below, paying close attention to the dismissive attitudes of opponents of regulation of homeowners and condominium associations.
Lawmakers aim to hold homeowner associations accountable for lost, stolen money
By Brigette Namata
Published: January 30, 2017, 5:57 pm Updated: January 31, 2017, 8:18 am
After several high-profile cases involving lost or stolen money, there’s a push to make homeowner associations more accountable.
There are several proposals being considered that could change the way they operate.
The number of House bills involving condo and homeowner associations has more than quadrupled in two years.
Two years ago, four bills about condo and homeowner associations were introduced in the House. Last year, there were 10.
This year, there are 29, not including those introduced in the Senate. (Some examples are listed below.)
So why the increase in wanting to implement stricter rules?
A lawmaker tells us problems have been brewing for a long time, and it’s time for the laws to change. But a property management company says that’s unnecessary.
“I think the reason you see an overwhelming growth of numbers is people are screaming for a solution,” said Rep. Matthew LoPresti, D, Ewa Villages, Ewa Beach, Ewa Gentry. “They have real problems where their only option is to pay thousands of dollars for attorneys, and they’re asking the Legislature to help them.”
Read more (VIDEO)
Do Condo Owners Need Some Help From Hawaii’s Legislature?
Potential condo-related proposals run the gamut from establishing an ombudsman to merely clarifying existing laws.
JANUARY 17, 2017 · By Anita Hofschneider
Condo owner John White Sr. wasn’t planning to get involved on the board of Pearl Ridge Gardens and Tower. But when maintenance fees jumped nearly 50 percent in late 2015, he wanted to know why.
It was the beginning of a yearlong campaign to get answers about his condo association that ended in residents voting out the leadership last fall. Now White is the board president and is working to get a handle on all of the financials.
White said the process would have been less frustrating if condo owners had someplace to turn when they need help, other than paying for mediation or hiring an attorney.
Do similar HOA, condo association proposals work in other states?
It is important to note that most of the regulatory legislative proposals filed in Hawaii have already been enacted in other states such as Florida, California, Nevada, Virginia, and Illinois. But problems persist, even in those states, mainly because enforcement remains difficult and expensive.
To further complicate matters, industry lobby groups, including CAI and homebuilder trade groups, have amended most consumer protection legislation over the years, creating exceptions and loopholes that allow association boards, managers, and developers to avoid accountability.
So the most critical factor in enacting any kind of regulation of common interest Association-Governed Communities is making certain that the law truly serves the public interest for consumers, and that all owners and residents have simple, affordable access to justice.