Legislation needed to rein in abusive condo associations

Condo self-governance, as we’ve experienced it, really only works when morally responsible management is regulated by third parties with powers to enforce laws in place that protect the rights of individual owners, and when the laws themselves equitably define rights and responsibilities of association manage- ment and individual owners.

Without this system of checks and balances, abuse becomes rife in condo associations.

Courts in several states have ruled that associations are not governments in and of themselves. Yet, because of the lack of regulation of homeowner associations, abuse by the highest level of management is possible, often likely, and profitable.

The ultimate tragedy for condo homeowners is to lose their residences, through liens and foreclosures imposed by unscrupulous parties denying these property owners due process. It is particularly devastating when these are the sole properties these individuals own. Yet, this is becoming a common story across our nation, including in Hawaii.

By just running afoul of condo management by criticizing or questioning its policies, owners can very well find themselves facing loss of their homes. Common tactics by which management carries out what is called selective enforcement have been:

>> Contrived, unfounded accusations of violations against individual owners.

>> The hiring of association attorneys to “counsel” management regarding these accusations.

>> The immediate demand for reimbursement by the owners to the association for these questionable legal fees or other charges.

Unfortunately, our current laws require owners to immediately pay whatever is assessed against them, justified or not, then dispute the charges later.

Because government assistance in the just resolution of these matters is very limited, owners themselves are compelled to hire attorneys at prohibitive costs to try to recover these unjustifiable payments.

>> The compounding of penalties, late fees and more legal fees in the hapless owner’s account, when they are unable to pay the first charge demands in full.

>> The inevitable foreclosure of the owner’s property, often after only one or two months’ delinquencies, which decision is entirely at the discretion of the condo board or its attorney.

I believe that to provide owners with an advocate, the ombudsman, through House Bill 1802 and Senate Bill 2760, is to restore a means of due process to our condominium owners.

Highlights of the bills are:

>> The opening of investigations restricted to condominium owners.

>> Full investigative procedures by the ombudsman for complaints registered.

>> The suspension of legal charges and other assessments by management against owners until the ombudsman has completed investigations and rendered resolution recommendations.

>> The limitations on the purposes of legal consultation fees for which management can impose on individual owners.

>> The requirement that voting results in the executive sessions (where many of these unjust enforcement decisions are made) of board meetings be disclosed in their minutes.

>> Educational opportunities on owner rights the ombudsman will make available to owners.

>> Funding for the ombudsman and staff to be provided by the condominium education trust fund already maintained by annual fees all owners pay.

Whether you’ve ever been in conflict with your management or not, as a condo owner you owe yourself full efforts and action to maintain protection of your rights, that in truth, many of our current local condo laws do not support.

HB1802 is scheduled for a 2 p.m. today hearing at the state Capitol, room 325.