A Civil Beat story by Stewart Yerton again calls attention to unhappy condominium owners who appear to blame rising monthly maintenance fees on arbitrary decisions by their elected condominium boards (“Condo Owners Want More Power To Fight Their Homeowners Boards“). The comments display the range of opinions, from the condo equivalent of anti-tax activists to others those pointing to structural issues out of the control of individual condo boards.
Yerton’ story quotes Rep. Adrian Tam, a Democrat who represents the Waikiki-Ala Moana area that is home to well over 100 high-rise condominiums.
“My main goal has always been to make sure our maintenance fees stay at a reasonable rate and that the condos have enough in their reserves to cover repair expenses,” said Tam, whose district includes Waikiki.
One comment tackled Tam’s statement directly, and resonates with me.
This is a disappointingly naive opinion. The main goal for both government and HOAs should be to ensure that condos are properly maintained to be safe for residents. Many of Honolulu’s condos were built in the 1960s and 70s, and the cost to maintain these buildings will only increase. The idea that you can both keep maintenance fees low while preserving repair reserves in deteriorating 50 year old buildings is contrary to basic math, not to mention common sense.
The reality is that for older condos to remain safe, HOA fees will need to increase over time, perhaps with special assessments, and this increase will accelerate with the condo’s age. Those who are not able to pay HOA fees will need to sell, and the price of units will decline as HOA costs increase.
Giving condo owners more power to fight and delay repairs is not the solution here. The Surfside collapse in FL is a good example why.
The life cycle of a condominium building is no different than a single family home. As your home ages, maintenance costs go up, and personal budgets needed just to protect the building and the homeowners safety go up, at the same time that inflation and just the passage of time pushes costs of repairs higher more generally.
An individual homeowner can choose to defer needed maintenance, at least to a point, by letting their home deteriorate, and hoping to arrive at a point where they have the funds to invest and catch up with the needed repairs.
Condo boards, by law, can’t defer common expenses for maintenance, repairs, and replacements, and simply let their buildings deteriorate in order to save money and keep monthly fees as low as possible. Boards and their members have a fiduciary duty to all owners to keep their buildings in good working order and to budget for required maintenance that will be needed. To do less because of the common pain caused by increasing costs could breach that fiduciary duty, and end up costing more in the long run.
I agreed with another comment posted:
Being a member of a condo board is largely a thankless job. There is never enough money to do everything everyone wants, and there is always a huge debate with raising rates while facing inflation and cost increases. In addition, a small minority of people constantly complain about many minor issues, without offering solutions that the majority of owners will agree to. I’ll bet it’s a lot like serving in political office, particularly at larger condo buildings.
Unlike politicians, board members have day jobs, and the bad feeling between neighbors over disputes literally follows them home.
How would an Ombudsman help? Banning proxy voting will make it even harder to get people other than a small minority of those who care enough to participate, potentially turning a bad situation worse.
Perhaps a training program for condo owners might both help set expectations as well as encourage good candidates to volunteer to be on condo boards. A condo owners’ “bill of rights and responsibilities” might also remind folks of their collective responsibility to work together and treat each other humanely.
On area legislators should address is placing limits on the compounding of legal fees, fines, penalties, and interest, which can unfairly create a huge and costly bill for an owner who finds themselves in a dispute with a condo board or management company.
In any case, for those interested, the Real Estate Branch of the Department of Commerce and Consumer Affairs provides online links to “Resources For Condominium Owners, Boards Of Directors & Associations.”
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Great summary. Thank you, Ian.
At my first condo many years ago, I was once a member of the small minority of people constantly complaining about issues, but later, once having served on several boards, I began offering solutions that the majority of owners would agree to. It’s hard work and time-consuming. Each owner should take turns being on the board but that never happens. Presently, I would like to see fire sprinklers in all condos. This is expensive. Spalling is another expensive matter. But, one or two squeaky wheels plus those lacking the needed money to upkeep a property can weigh in and disrupt the process for every owner. Giving condo owners more power to fight and delay repairs is not the solution here. This is what elections are for.
Once again. The problem isn’t sprinklers or splling. Nor frivolous complaints. Right now boards are immunized from reasonable complaints. To take a concrete example my condo association paid a bogus biill of $542 from a plumber claiming he was searching for a leak. The owner was then charged thst amount because he was searching for leak later found in his home. The owner wass present when the plumber noticed water marks on the tile in the bathtub. When asked how much to repair it the plumber quoted a price of $1200. The homeowner was then told he haad to repair vthe leak using the plumber. He then turned it over to his insurance company who rejected the vlam. But did agree to pay $932 for his search. The owner new it was faalse told the insurance company that it was bogus and tore up the check. This pluber then billed the Association for this bogus search. He was paid. Then in a review of the plumbin g bills thie association decided to bill the owners for reimbursement. Despite a standard clause in the by laws that states all work done outside vthe apartment is the association responsibility. This is basically theft. The association, and management company should never have paid the bill. They then. Covered their lapse by billing the owner. Who had no recourse to the courts.
The difference between condo’s and single family homers is governence That governance creates an association of property owners similer to shareholders in a major corporation, shareholders have basic rights in the proper functioning of the corporation. Regulations around these rights are enforced by the Security and Exchange Commission. Shareholders have access to the courts that likewise enforce these.Shareholders are still robbed, think Enron and Bernie Madoff. At the heart of condo association governance is an explicit contract, the Condo by Laws. As with any contract how would it be enforced? Normally you go to court and get a civil ruling. Here is where the whole thing falls down. Owners have been excluded from the court system. HRS &514 B-157 allows boards to hire a lawyer for its defense against an owner and then charge the homeowner. In my case I pursued a legal eviction against my tenant. I hired a lawyer, paid him $2,000, and wrote an affidavit regarding her conduct. I then received a “demand lette” dated after I had hireed the lawyer, demandibng I do the very thing I had already done. I was then billed $1,642.90.for the attorneys fees regarding the 3 page demand letter. Internal evidence suggested that this bill was excessive. I asked for a copy of the bill. Denied because of “attorney client privilage.” I asked to see evidence that the board had agrreed to this. Denied because it was in executive session and no minutes are taken. I had hoped to reason with the attorney pointing out that her demand letter said if I did not pursue this action i would be chargeed. I also pointed out that substantial sections of that letter regarding my tenant were false. I paid the fee. I then recieved a 4 page letter that appeared to be writteen by someone pretending to be lawyer. I was then billed $1,700 for that effort. To be clear I was billed once for a letter demanding i do ssomething I had done. I was then billedf again for protesting that bill. The lawyer handling my eviction said this is a common practice. Someone complains about functioning and the first response is hire a lawyer and bill the owner. Somehow Tam’s remarks about “reasonable fees” was interpreted as objecting to the high cost of maintenance. As this example indicates there really are “unreasonable” fees. Clouded in murky bookkeeping and decision making done in a closed room with no records. And in the comments on the article you cite i find others who were similarly treated.
Having the use of a State or City Ombudsman is a great idea. It would help cut down on Lawsuits. As a long-time Makiki Neighborhood Board Member and Retired Machininist Union officer, I’ve never wanted to join a Condo Board because most of the people complaining are not responsible owners, and a lot of property management companies don’t respond to complaints.