Finally, Real Condo Law Enforcement?
Hawaii Free Press
by Marcia Kimura
07 November 2016
The notion of condominium self-government presupposes that owners will
accept as absolute and final, the rulings of Boards of Directors and
association management companies. As such, it is a structure doomed to
failure, not only as a result of patently expedient regulations by and
for management, but also as a system in which many disputes inevitably
end in costly litigation in our courts, when the constitutionality of
condo policies is challenged. Owners who experience widespread abuse by
management and attorneys, of assessments against them resulting from
fraudulent violations, and who have lost their homes as a consequence
of such actions can attest to this “par for the course” nature of condo
home ownership.
Currently, one of the dispute settlement options Hawaii condo regimes
offers is evaluative mediation in which mediators assigned to hearings
are supposedly trained and knowledgeable in condominium governance.
Settlements based on suggested solutions by a mediator are entirely the
mutual decisions of both parties. Records which may include the
evaluative type of mediation, for the period July 2015, the inception
month, to September 2016, indicate that of the 43 total cases
submitted, only 17 were mediated to agreement, - hardly the resounding
success the condo management industry and its attorneys credit this
method with. (1)
Another resolution method has been binding or nonbinding arbitration,
in which decisions are established by arbitrators after hearing and
considering the arguments for both parties; judges or field-experienced
attorneys commonly serve as the arbitrators. One of the risks with this
is the possibility that the party the decision is against can be
assessed the legal expenses of the other party; another is the
possibility of dissatisfaction with the rulings.
Widespread criticisms of both mediation and arbitration are that:
association managers or Boards often have exclusive access to the
selection process of mediators and arbitrators, with the implication
that condo owners are at a decided disadvantage in pressing their
claims;
the equitable quest for accuracy and solutions based on hard facts, are
sacrificed in favor of compromise, which in most cases neither party is
satisfied with;
in the absence of thorough investigative procedures in place before the
hearings, careful deliberation of the evidence and sentiments of both
sides is impossible; the presiding official is often limited to simply
reading aloud the carefully prepared cases of each side; and
association Boards and management have the unfair advantage of covering
any or all of their legal expenses for disputes through use of
association funds or direct immediate demands for reimbursement of
these costs by condo owners.
For both resolution processes, costs average three hundred dollars per
hour, exclusive of fees paid attorneys for their consultation.
Obviously, litigation, the third route for settlement efforts,
involving exorbitant legal expenses and possible protracted time
requirements, places this option well beyond the financial access of
many owners.
A dramatically promising alternative to these flawed options is
inspired by and modeled after Nevada’s seven-member governor appointed
commission and ombudsman’s office, which has an established record of
successfully bringing to justice, including penalizing, violators of
Nevada’s condominium laws.(2) The proposed Hawaii bill for the 2017
legislative session would institute our own governor-appointed
commission and ombudsman’s office and provide for:
1. A two-tiered structure of dispute resolution beginning with the
ombudsman who possesses legal credentials and broad condominium-based
experience, and culminate with the powerful enforcement actions of a
seven-member commission, if no resolution is reached with the ombudsman.
2. Cost free filing procedures.
3. Thorough investigative procedures by the ombudsman or commissioners
before hearings are held, instead of momentary, cursory reviews of
evidence at hearings.
4. Swift punitive action by the commission towards determined
violators; this would include fines, penalties, removal from current
positions of management in associations when warranted, and
5. Suspension of disputed fines, assessments (for non common element
dues) and legal charges imposed on owners, until the work of the
ombudsman or commission in each case is completed.
If you as a condominium owner are disheartened with current
exploitation of condo laws by management and its attorneys,
disappointing dispute resolutions methods, and the absence of tough
enforcement action against violators of your rights, doesn’t it behoove
you to demonstrate to our legislators that they cannot ignore this
swelling tide of discontent? You are encouraged to respond in favor of
the following petition proposal.
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