Senate Standing Committee on Commerce and Consumer Protection

Good morning and welcome to the Hawaii State Senate Committee on Commerce and Consumer Protection. It's Friday, 02/13/2026. This is our 9:30 a.m. agenda in Conference Room 229 at the Hawaii State Capitol. The first measure on this 9:30 a.m. agenda is Senate Bill 2294 relating to common interest communities. This measure specifies that all condominium associations, boards, and managing agents are required to comply with the declaration, bylaws, and all county ordinances and state and federal laws, rules, and regulations, including mortgage lending requirements.

First up, we have the Community Associations Institute Action Committee in opposition.

Good morning, Chair and Senator. My name is Phil Nerney. I represent the Community Associations Institute, which is opposed to this bill, excuse me, for the primary purpose that all laws that the Legislature passes must be obeyed. So it is redundant and injects doubt into the statute if this were to pass. It's also true that the condominium statute as written already compels compliance, and there are penalties for the failure to do so.

So we don't think this would be a helpful addition to the condominium statute. Thank you.

Thank you. Raelene Tenno in support.

Good morning.

Thank you, Chair. So I'm Raelene Tenno. I'm here as an individual. I'm also the education chair for the Hawaii Council of Community Associations. So in this particular self-governing, it's not explicitly stated in the statute.

It is implied, but we've had several incidences in the community regarding self-governing. One in particular was a violation of electrical, that a condo was using a 100 amp to plug in a 200 amp EV charger. So the individual called DPP to file the complaint. The investigator came out, verified that it was a violation, did not want to issue a notice of violation. He went back to the complaint and said the condo is self-governing.

Go back to your board. Well, it's the board that allowed it to happen in the first place. Another incident was a resident was walking around in kind of full tactical gear carrying a rifle. They called 911. The responding officer responded, and it said the same thing.

You guys are self-governing. So we're kind of a little bit alarmed. And I did have an opportunity to have a really nice conversation with the managing director, and I explained to him these situations. He was very concerned, was not happy with the response of the city employees. So I believe he said he was going to send out a directive under the term that self-governing is still subject to all the regulatory requirements.

Even for me personally, in my unit, typically I don't allow pets because I just don't want to deal with the stuff associated with pets, especially hospital evaluations. But I have an applicant with two emotional support dogs. And in our bylaws, it requires a prescreening by a committee of the board to approve. They denied her. And I'm like, she's got two emotional support.

And I verified all the information, vetted that the doctor that signed it was a Hawaii licensed individual. So but they denied.

Thank you.

Okay. Thanks.

Yeah. Thank you. We're going to take a brief recess so we can take action on a prior agenda. Recess. Convening this 9:25 a.m. agenda on Friday, the 13th, 2026, in Conference Room 229 at the Hawaii State Capitol, to conduct a decision-making on SB 888, the proposed SD1, which will be heard next week.

So this is a decision-making on the proposed draft, and the recommendation is to pass with amendments. Any discussion? Okay. The copies of the proposed draft have been made available. Yes?

Oh, it's passed with amendments and recommit back to the Commerce and Consumer Protection Committee. If there's no discussion, Chair votes aye.

Thank you. Vice Chair also votes aye. Senator Lamosao is excused. Senator McKelvey? Yeah, why not?

Senator Awa? Aye. Your recommendation is adopted.

Thank you very much. We're adjourned. Okay. Reconvening this 9:30 a.m. agenda. We were receiving testimony on Senate Bill 2294, relating to common interest communities.

Next up, we have Christine Morrison in support. Susan Trombley in support. Lourdes Scheibert in support.

Okay. Susan, we see you, but we don't see you. If you could turn your video on and unmute. Okay. You're unmuted. Okay.

Good morning.

Good morning, Chair. Aloha. Is it my turn now?

Yes. Please proceed. Aloha.

I am Susan Trombley. I have owned a condominium in Kapolei since 2018 and a townhouse in Ewa Beach since 2008. Both of my properties fall under a planned community association as well as my condo association. In my capacity as a board president in a planned community association and as a vice president in my condominium association, associations governed by 514B, 421J, 421I, I have encountered discrepancies and at times less rights as a homeowner.

Homeowners should feel secure believing that we are protected.

We should have access to all information. I support HB 1587 and SB 2294 requiring that all condominium associations, boards, and managing agents are required to comply with all of the declaration, bylaws, and all county ordinances and state and federal laws, rules, and regulations, including mortgage lending requirements. Mahalo for your time.

Thank you very much. Next, we have Lourdes Scheibert. Did we

Not present on Zoom chair.

And Joe Taylor in opposition online?

Not present on Zoom.

Thank you. Greg Misakian in the room.

Good morning. Good morning, Chair, Vice Chair, and we have one additional member of the committee. I came in person today. I usually do my testimony by Zoom, but I thought it was so important to be here for the condominium measures today.

My name is Greg Misakian, and I currently serve as the president of the Kokua Council, the vice president of the Hawaii Alliance for Retired Americans. I am a director on my condominium association board. I have been for a number of years. And I also have a seat at the table at the Good Government Caucus. And I sit here today, and I commend the last board member on her condo association that stated that this bill is important.

It doesn't do a lot, but it actually does, because it just sends a message that I, as a director, am responsible for my fiduciary duty, for my actions, for making sure that our condominium project, whatever is done, especially projects that are large scale, are done with proper permits and done according to proper laws and procedures. And, unfortunately, at my condo association, the rule is typically to go the other way. Without permit, numerous notices of violation. I've had to call it out numerous times.

We have a board, a majority board led by a board president that unfortunately just doesn't follow the rules, and it's caused our association a great deal of harm, financially and also from a building standpoint for safety issues.

And I have very serious concerns. And this year, our legislators are going to hear a lot more outside of committee and hopefully publicly because I've had enough of it. So I ask you to please support this measure, get the message clear to all out there that those who serve on these boards and the managing agent, and others, also the site manager, they're all responsible. They all have a responsibility to protect and also to serve, properly.

So thank you very much.

Thank you very much. Okay. In total, we have 27 pieces of testimony: 10 written testimony, 10 in support, and 17 in opposition. Is there anyone else in the room or online who would like to testify on this measure? Okay.

Seeing none. Members, any questions? Okay. We'll move on. The next measure is SB 2298 relating to common interest communities.

This measure requires common interest community proxy forms to include certain language related to the selection options for proxies. CAI, with comments?

Good morning, Chair, Vice Chair, and Senator. My name is Philip Nerney. I represent the Community Associations Institute. If the intent of this bill is to provide clarity to consumers, then it doesn't achieve that goal. It contains a number of inaccuracies and plainly incorrect statements.

So, if something like this were to be deemed appropriate, it would have to be significantly revised. Thank you.

Thank you very much. Susan Trombley in support. Can you please unmute? Okay. Go ahead.

Good morning, Chair. Thank you. Again, my name is Susan Trombley. And in my capacity as a Board President in a planned community association and as a Vice President in my condominium association, associations governed by 514B, 421J, and 421I, I support HR 1834 and SB 2298.

I believe the first time I received a proxy form, I couldn't figure out which option best suited my circumstances. It was several years and multiple seminars later before I understood what each option fully meant and what each option was truly best for me. Voting for our association's Board members shouldn't be confusing. There should be no question. Voting should be clearly explained, so there is no question about how a homeowner's proxy is being used and tabulated.

I support HR 1834 and SB 2298, which requires common interest community proxy forms to include certain language related to the selection options for proxies. Mahalo for your time.

Thank you. Sandy Wong in opposition.

Not present on Zoom.

Good morning. We have her in the room. Thank you.

Thank you. Good morning, Chair, Vice Chair, and Senator McKelvey. My name is Sandy Wong. I'm a longtime condo owner, and I sit on my condo board, but I'm here in my individual capacity. It's my understanding that the purpose of this bill is to make the understanding of the proxy form easier.

Unfortunately, I don't think this bill accomplishes that. If anything, I think it makes it more confusing because it causes the proxy form to be more voluminous. And I think when you have lots of voluminous documents, people tend not to read it. Also, when I look at the language that they're proposing to be inserted next to the boxes, in my experience, that language is not correct. And I have provided written testimony explaining, and I can get into the specifics if you would like.

You know, I agree that people should know what they're doing when they're filling out the proxy form. This is not the answer. You know, I think maybe if the Real Estate Commission came out with an instruction form that we can insert in the packet, that might be helpful. You know, I was thinking that when I do my tax forms, there are not explanations, but there is a separate document that tells you step by step what you should be doing. And maybe that would be more appropriate.

So, you know, I'm happy to work on this with the proponents, but I would I would ask you to defer this bill because I do not think it accomplishes what it's meant to do. Thank you.

Thank you. Gregory Misakian in opposition.

Aloha, Chair and members again. Greg Misakian. I do agree with the last testifier that this bill, as written, would be a little maybe more confusing. It would shed some light, and it would also be a lot of information to read. My experience is I don't believe that most homeowners are reading all of the information that they get.

What I had suggested in my proposal, I asked for amendments. So I oppose the way this bill is currently written. My suggestion is this, and it's a very common-sense suggestion. Proxy voting is not working at condominium associations. Proxies are used and being weaponized by certain Board members, including the President of my condo association.

So, there's a letter that he's got out. We have our annual meeting coming up, where he's asking personally for proxies to be given to him so he can vote for the board. That's kind of interesting because the letters are supposed to be as an owner. I have a letter in, too, asking for proxies, and I started with, "We have misconduct, breach of fiduciary duty, violations of the business judgment rule," and I go on to say some of the concerns and issues.

Proxy voting needs to be eliminated. I do believe, from what I had heard, that former Representative Scott Saiki's building doesn't do proxy voting.

Where I came from in California, proxies were not used. Proxies were allowed for certain circumstances. If you couldn't, if you wanted to do, like, a power of attorney or recommend someone else. But we received ballots, and I was power of attorney for the condo owner. The ballot would come in.

She would still have to fill it out. The people that were running were there on the ballot. The different things you would vote for, for insurance or what have you, on agenda were on the ballot. It was put into a sealed envelope and mailed back in another envelope, and they were opened at the annual meeting. That's the way we should be doing it here in Hawaii.

And so I I ask you to please look at my testimony, hopefully follow it. Thank you.

Thank you. That's all the testimony we've received from individuals who indicated they would like to testify at the hearing. We have written testimony in total from 29 individuals: seven in support, 19 in opposition, and three with comments. Is there anyone else who would like to testify on this measure? Please come up.

Good morning. I'm Raelene Tenno, as an individual and as education chair for Hawaii Council. So, the original, when we thought about this, was in the past years, there's always been a bill to remove the board as a whole. So, in talking with Jane, I said, how do we kind of, well, I was kind of tired of seeing that bill.

But we thought about how can we change the dynamics through education. So, that was one thing. And our original thought was to have it as a separate piece of paper that would be included in the annual meeting packet. And it would also explain their rights as an owner, their duties and responsibility owner to turn it in.

So it would serve multiple purposes: to start the education process, or, you know, not the process, but letting the owners know their responsibilities of completing it, plus the ramifications of the selection of each box.

Because that's always been the biggest complaint that I hear from a lot of people, is they're approached by people and they're told what box to select, but they don't understand why they're being told that box. So, that was kind of, like, the start of it. And the way it is now, I wouldn't say it's perfect. So, I am looking forward to see if we can make amendments and have further conversation to amend the whole intent of it, and hopefully, it will pass.

So thank you.

Thank you. Anyone else? Members questions? Okay. We'll move on.

Next measure is SB 2300, relating to condominiums. This measure reduces condominium associations' cash flow plans from a thirty-year projection to a twenty-five-year projection of the association's future income and expenses to fully fund its replacement reserve requirements each year during that twenty-five-year period. CAI in opposition. Good morning.

Good morning, senators. Thank you for the opportunity to be here with you today. CAI Legislative Action Committee opposes Senate Bill 2300, essentially for three reasons. Number one, it doesn't actually make things more affordable for long-life components.

It actually gives you five less years to actually save up for these components, so it requires a higher financial burden. Number two, 514B-148 also requires that an association engage an independent reserve study preparer at a minimum once every three years. This law would basically contradict CAI National Standards, where thirty-year components or longer can be unfunded. But once they reach that thirty-year projection, then they need to be funded in a reserve study.

And number three it's just less transparent.

You're providing less information to owners, to potential buyers, when you're reducing the projection period from thirty years to twenty-five. If the idea is to try and make things more affordable for homeowners, I think there's another means that could be potentially utilized for these long-life components. And it would be basically to possibly allow for a future loan or future special assessment, with some guardrails in place to make sure that you're not just kicking the can down the road.

So for example, if you have a a a piping product due in ten years and it's $10,000,000, legally, we can't plan on a future loan at this point. So now that association has to save up a million dollars per year just for that one component.

Well, if you actually allow for a future loan and you have that ten-year period, and then a bank amortizes for an additional twenty years, you actually could potentially amortize that cost over a thirty-year period now, rather than save up for it in ten years. So I would suggest, potentially, that we get, or you guys give, some consideration to potentially allowing for a future loan, again, with some guardrails in place. Thank you so much.

Thank you very much. Lloyd Lim in support.

Good morning, Chair, Vice Chair, members of the committee. My name is Lloyd Lim. I'm here testifying in my individual capacity, although I am a chair of a condo board. We have five board members. I'm one of two lawyers, and he's older than I am.

So, we do try to comply, contrary to some of what you hear out there. And there are some terrible stories. I just want to make a, you have my written testimony. I don't want to stand on most of it. I just want to make a key point, which is that these numbers, 25, 35, or 20 or 30, or 20, those numbers result in quite a big difference for different condos or in different situations.

So, I just point that out. When you say you're doing something, it's hard to know exactly what the impact is on each one of those condos. From my part, just from my why I would be here at all, is because I don't really like it when somebody who's advising me tells me that I have to do something that I can't do, that I, as a practical matter, can't do. Someone tells me I have to charge a maintenance fee that can't be sustained practically.

That puts me in a really difficult situation.

So, I'll just quote somebody who some of you know: Mark Rutte, R-U-T-T-E. He's the Secretary General of NATO. He's speaking at the World Economic Forum, Davos, recently, and he was on TV, and he said something to the effect of, "Bad regulation, bad laws, when the vast majority of people can't comply with." So, I'm not here to whine about it. I'm just telling you I don't like being put in position.

And the only reason I would come down here is being put in a position where I'm being told to do something that I can't actually do as a practical matter. I have to live in the real world. Thank you.

Thank you very much. Susan Trombley in opposition online. Good morning.

Good morning, Chair, Vice Chair, and members of the committee. My name is Susan Trombley, and I have owned a condominium in Kapolei since 2018 and a townhouse in Ewa Beach since 2008. Both of my properties fall under a planned community association as well as my property community association. In my capacity as a board president in a planned community association and a vice president in my condominium association, associations governed by 514B, 421J, and 421I, I oppose SB 2300.

Many homeowners in Hawaii are feeling the financial hardships of increased fees to cover operating expenses and reserve requirements.

By lowering these projections from a thirty-year projection to a twenty-five-year projection, the association's fees will increase and, for some owners, drastically. I oppose SB 2300, which reduces condominium associations' cash flow plans from a thirty-year projection to a twenty-five-year projection of the association's future income and expenses to fully fund its replacement reserves requirements each year during that twenty-five-year period. Mahalo for your time.

Thank you very much. Okay. Is there anyone else who would like to testify in this measure, please?

Again, Chair, Vice Chair, and other additional member of the committee. This is the only one I did not submit written testimony on. I was doing them last night. They all came in late, so I think there are nine on schedule for today. I didn't because I wanted to think about it a little bit more, and I do support what the testifier for CAI said, most of what he said in the beginning.

The only thing I have concerns with, especially as I serve as a director on my association and because I know firsthand with the loans that we get encumbered with on our associations that continue to get a loan on top of another loan. Loans aren't the way to go, to have more loans. We need less loans.

We need proper accountability, judiciary responsibility, which, you know, when money is going out the door improperly, which happens a lot at many associations, sometimes also for embezzlement and other things that have been in the news. But when it's going out improperly for one bid contracts are very sketchy or whatever they are, or just mismanagement in general, what you have at that point is poor budgeting.

You know, I won't call it even budgeting. It's just malfeasance. But it continues on and on, and then adding another loan on top of another loan on top of another loan. We have two loans currently, and we had a loan for, so do we have a five, we had a, I think, a three, a $2,000,000 loan, and then I think another $3,000,000 loan. So, at some point, with the interest you're paying on the loans too, if everybody understands mortgages, it gets a little bit wonky. I'm always a proponent of very short-term mortgages, fifteen years versus thirty. I would never tell anybody to get a thirty-year mortgage. So, with that said, and I'm sorry I'm taking a long time.

I just wanna get this message straight so that you understand from experience. I oppose this. I support what CAI said, and I suggest looking further at any suggestion of loans Okay. That's concerning to you. Thank you.

Thank you. Is there anyone else who would like to please come up?

Thank you very much. Dave Erdman, here today as an individual. I do not have written testimony, but I do support what the CAI said in opposing this measure. I sit on three condominium boards: Vice President, Treasurer, Secretary. I know I shouldn't do that.

But anyway, I believe in what they say, and I thoroughly oppose this. We're working on our budgets now and the details of how it works. It's very important that we have the extension that was discussed in previous sessions, and I think it's a good move to keep it as it is and oppose this. So, thank you very much.

Thank you. Thank you. Is there anyone else who was triggered by this bill and feels compelled to talk? Because you are free to do so right now. Thank you.

Okay. If not, then we'll go to questions. Members? Vice chair?

I have one follow-up from the representative from CAI. If you could come forward.

By the way, I'm Jonathan Billings. Sorry. I didn't introduce myself earlier.

I know that in 2022, the legislature adopted legislation, you know, really seeking to reform some of what had been happening previously, and the thirty-year reserve requirement was imposed. And in our research, you know, on the standards, national best practices, we could not find any other state that had imposed a specific thirty-year standard.

Are there other instances in which your organization has kind of, worked with state legislators and condominium associations to identify, you know, how those best practices should be implemented and how they should be, I guess, followed?

So, I couldn't speak for other states specifically, but I do know that Community Associations Institute National, they formed a committee, like I put in my written testimony, after the building collapsed in Florida. And they updated that. They did a thorough investigation.

And basically, what they determined is that these components that have a long useful life or a remaining life of more than thirty years should be in a reserve study but marked unfunded, or you don't have to allocate funds for that specific component until it reaches the last thirty years of its useful life.

So basically those standards that CAI created is that now that once you reach the last thirty years of your useful life of that specific component, at that point, funding for those components should begin.

So, I can just really speak to just the CAI National Standards. I would say that there has been, I would say, misinformation over the last number of years about the whole increase from the twenty years to the thirty years and how it made it more expensive. That necessarily isn't true, as I kind of laid out.

Most of the components in a reserve study have a useful life of twenty years or less, actually, already, but there are only a few components that actually have a longer useful life. So, I would just say that we would be in line with national standards according to CAI if we kept the projection period at the thirty-year period.

Okay. Thank you.

And then, just to clarify one comment as well that I'd like to make. I agree with what this gentleman said over here, that proper budgeting is key, is very important to do so. And I agree with that. The situation that we are currently in, though, as you're well aware, a lot of these associations are built in the sixties, seventies, eighties, and nineties, and they haven't been properly budgeting for decades now. So, now we are playing catch-up.

And that's where I think potential future loans for these types of associations could potentially be financially less of a burden because, again, you just amortize the cost over a longer period of time for these associations that have not been planning accordingly. Thank you.

Thank you.

Any other questions? Okay. We'll move on to the next measure. SB, 2037 relating to condominiums. This measure prohibits condominium associations from charging unit owner attorneys fees on fines unless unless deemed collectible.

It also limits attorneys fees awarded and charged under five fourteen b dash one fifty seven Hawaii Revised Statutes to 25% of the underlying claim and allows, the court to assess charges against against the party requesting trial de novo if the requesting party fails to better its position by 30% or more. CAI in opposition.

Good morning. Excuse me. Good morning, Chair, Vice Chair, and Senator McKelvey. My name is Phil Nerney. I chair the Legislative Action Committee for CAI.

CAI opposes this bill primarily because of the 25% fee cap that's proposed. Association boards of directors have an obligation to collect the maintenance fees that are charged without the collection of maintenance fees. Condominium associations cease to exist, so there has to be an effective remedy when people default on that obligation. It can't be the case that to chase $1,000 you have to spend more than $1,000 That will mean there will be no collection efforts. That is not a formula for success.

Similarly, there are individuals in condominium communities who are law violators and rule breakers. Associations have a legal obligation to enforce governing documents relative to those people, And there is a choice to be made. The choice to be made is do you assign the cost of bringing those people into compliance to the rule breaker, or do you make the innocent consumers who have no role in breaking the rules pay that expense. There are no other alternatives. Thank you.

Thank you very much. Collection law section of the Hawaii State Bar Association in opposition.

Good morning, Chair Keohokalole, Vice Chair Fukunaga, Senator McKelvey. My name is Paul Ireland Coftonau, and I'm testifying on behalf of the collection law section of the Hawaii State Bar Association. So while this beer bill is intended to reduce costs for condominium associations, it does so through provisions that are vague, arbitrary, and ultimately harmful to condominium associations and the very owners they serve. First, the bill proposes to prohibit associations from recovering attorney's fees related to fines unless the fine is deemed collectible.

However, the bill does not define what constitutes an appeal, where the appeal is filed, or what procedures apply.

Without these basic definitions, associations, owners, attorneys, and courts are left guessing. This ambiguity invites inconsistent interpretation and increased litigation, and that is precisely the opposite of the bill stated goal. If the associate if the legislature intends to condition fee recovery on a defined appeal process, That process must be clearly stated in the statute. Second, the bill imposes a 25% cap on attorney's fees, which the collection law section strongly opposes.

This cap is entirely arbitrary and bears no relationship to the complexity of the disputes or the conduct of the parties.

More importantly, it will shift enforcement costs from noncompliant owners to compliant ones. When fees exceed the cap, the difference will be paid through common expense assessments forcing law abiding citizens to subsidize violations. This problem is even more pronounced in non monetary cases such as injunctive relief cases where there may be no underlying dollar amount to which a percentage cap can even apply. In those cases, associations may be unable to recover fees at all.

Finally, the bills trial to no provision imposes rigid cost shifting rules based on percentage improvements that simply do not work for non monetary cases.

It replaces a flexible well understood prevailing party standard with a formula that does not fit many condominium disputes. For these reasons, SB 2037 should would increase conflict, discourage compliance, and unfairly burden compliant owners, and and the collection law section respectfully urges the committee to defer this measure. Thank you for the opportunity to testify.

Thank you. Jeff Sadino in support.

Good morning.

Good morning, chair, vice chair, and member of the committee. Nice to see everyone for another year. My name is Jeff Sadino, and I support this bill. A quick look at the written testimonies in opposition are talking about attorney fees for violations. I think this bill is talking about attorney fees for fines, which are two different things, I think.

But this bill should also require attorney invoices to be provided to the condo owners. So in a lot of situations, there will be attorney charges to collect the fine and then attorney charges to address the underlying violation. The problem is that if attorney charges for collecting the fine go above the 25% cap, there's nothing that stops the association from shifting those excess charges to other parts of the owner's account.

And because attorney charges are considered attorney client privilege, there is no visibility for the owner to verify that the excess charges actually were removed instead of just shifted elsewhere. And unfortunately, the trade industry has a demonstrated history of billionaires mostly through massive incompetence.

So for example, for me, Hawaiian and Porter Maguire, they just forgot to apply my $4,000 payment to my account, and they sent me a second let letter demanding that I pay $4,000 a second time. Another time, I explicitly told them that they cannot post their mediation charges to my account, but they did. Another time, you know, they filed a lawsuit against me with case number one, two, three, four, five. On my bill, they posted attorney charges for case number 510.

Completely separate lawsuit, completely different person that they just erroneously posted to my account.

There are many more examples that show that this accounting incompetence is system wide and systemic. So the only way to ensure the accurate implementation of this bill is to require that the attorney invoices be provided to owners with some amount redaction. So I hope you will consider this requirement to this bill or a future bill.

Thank you.

Thank you very much. Gregory Misakian with comments.

Again, Greg Misakian. While I did make comments, I do support the intent of the bill. So I I thank you, legislators, for looking at a bill like this and putting forth some language. I think it needs a little bit of work. While I don't always support what the attorneys say, I also understand that because they're trying to make a a bit of money, I I do understand also that there are, elements of procedural things that need to happen.

And as a director on my board, I also understand sometimes it's difficult to get people to pay or there's a fine a fine for a violation that you have to address. With that said, I would ask this committee if you could look at this in a in a clearer way and try to maybe amend this to put some language in this bill that really puts protections on owners.

All of the association are you know, every association is comprised of owners, and the owners are the ones, unfortunately, when they're targeted, there's a lot of targeted, attacks. And I see this at my association where somebody doesn't like an owner and they there's a lawsuit at some point, it rises to litigation or a lawsuit, from just a simple fine of maybe a few thousand dollars, and it ends up being 40 or $50,000. Okay?

That needs to stop. And then even after the first bite at the apple, I'm aware now of a second bite of it at the apple with someone at my condo association that's being targeted. And that's just one. There's multiple. So these things need to stop.

This is what's squeezing out residents. They're losing homes to foreclosure. This person happens to be a kupuna. I can't discuss any details, but it's very concerning to me. And I do ask that you look at the language of this.

And ultimately, SB 3309, which is an ombudsman measure I had put forward, is really the solution to address a lot of unnecessary legal actions and litigations if we could look at that. Thank you.

Thank you very much. Sandy Wong in opposition.

Thank you again, chair, vice chair, Senator McAlvey. My name is Sandy Wong, longtime condo owner, member of my board at my current condo. I want to make this very simplistic. I'm testifying in regards to the 25% cap, and my opposition is basically if the bad actor only pays 25% of the attorney's fees, who's gonna pay the rest? So that means the AOAO meet has to eat it, which means the owners who have been following the rules have to pay it.

That is just unfair. Now some of you may say that the AOAO is shouldn't even be incurring attorney's fees. You know, that they're abusing it. That may be a problem. But, you know, there are times where the AOAO really needs to bring the attorneys and get them involved.

You know, each AOAO, each condominium community is like a little city on its own. We need rules, and we need people to follow the rules. When we have someone who isn't following the rules, we need to do enforcement because it affects all the other owners who are following the rules. And it's just not fair to let some people break the rules and other people have to follow the rules.

So I would remind you as a condo owner who I like to think follows the rules is that I don't wanna pay that 75% difference that the bad actor is getting excused to pay from because he's capped at 25.

Thank you.

Thank you very much. In total, we had 25 pieces of written testimony submitted, four in support, 20 in opposition, and one with comments. Is there anyone else who would like to testify on this measure, please?

Since I'm here, I might as well. Again, Jonathan Billings, thank you for, the opportunity to speak with you again, senators. Let me just give you one example of why I oppose this, bill SB 2037, personally and from a managing agent standpoint. I have personal experience where I was managing an association and that association was required by city ordinance to basically modernize their fire alarm system.

There was an owner that basically refused access to the unit and and refused access to allow the proper devices to be installed within the unit.

Violations were issued, fines were issued, and ultimately the association had to pursue additional legal matters. And this is all due to a fact that an owner just refused to comply with code requirements, basically. The association could not close out their permit, could not complete their million dollar fire alarm system modernization because the owner was refusing entry into her unit. It racked up many, many thousands of dollars worth of fees. The owners still appealed it.

The judge ruled in favor of the association. But but as such, if this does pass, a bad actor like was previously mentioned previously would would not have to pay for the ramifications of of the difficulties that they caused personally and that the rest of the association would have to bear those those costs. Thank you.

Thank you. Is there anyone else who would like to testify? Members questions? Senator McKelvey? Sandy,

why not? Yes.

No. I I mean, I see what you're saying, but, you know, it appears that this bill tries to address something we hear about every year. Like and I've been here twenty years. Every year is targeting where the association officers or president doesn't like somebody in the in the condo, they've got a personal beef or an issue or whatever, and they decide that they're going to weaponize the violation system to go after them. We hear the stories over and over and over again.

Do you rather than approaching a blanket solution, I mean, isn't should we look at some kind of a cause of action or something where individual owners who are being targeted by the use of attorneys in the buying system can then bring an action against that to stop the targeting? Would that be a better approach than these blanket bills that are trying to seek to universally stop targeting?

I think so. And I think if if I'm not mistaken, there is a provision in the statute on retaliation. Now I will acknowledge that AOAO boards sometimes target people. You know, before I joined my

board I know. That's why I

was asking that question. Joined my board, I was a targeted owner.

know? And you all know, I you know, because I'm a lobbyist, I came and I I said, how do we fix this?

Uh-huh. You

I will remember I will encounter discussion. You're like, how do I fix this? I go join your board. Correct. Run for your board, and you did.

Yes. And now you're testifying against these bills. So, I mean, so my so knowing that you've been on both sides, help the legislature find a public policy solution so that people you know, if there's something in the books that ain't working because people are being targeted. I mean, it's clear.

I mean, and there if there's a mechanism in law that associations know that owners could be used, then their attorneys and association managers will advise the board presidents to perhaps they might wanna pursue their beef elsewhere and not be using it here because of the pending litigation that could come back on the board.

See what I'm saying?

Yes. So you're correct. I have been on both sides. You did tell me, run for the board. I did, and I am on the board.

And I and I have seen the big picture. You know? I've seen the AOAOs. I mean, I'll tell you quite frankly. My first year on the board, when I was telling a the board president that he couldn't do something, that he was harassing owners, And I said, you cannot do that.

We will get sued. He blatantly told me, Sandy, I'm the board president, and I can do whatever I want to do. My response to him was, you are delusional. You know? God bless you.

Yes. And I said that, you know, if he didn't stop, I would bring it to mediation. And, you know, I can only tell the owners there is a solution now. It is there is the retaliation statute. I know it's frustrating, but, you know, if there is a problem with your AOAO, you really have to be the squeaky wheel.

You know, I grant you, you know, I may have better tools because I'm an attorney, I'm a lobbyist, etcetera, but there are mechanisms out there. And our owners need to get educated, and I don't know if it's something that the real estate commission has to do. But a lot of our owners, they're not taking personal responsibility, quite frankly, and they need to be more proactive. So I do not like this bill because I think it's it basically punished the good actors.

And you're giving a break to the bad actors.

And, you know, my philosophy is I do not reward bad behavior. So I don't know if I answered your question.

You kinda did. Thank thank you, chair, for that. But I still think we have an issue of targeting. You've experienced it yourself. And so maybe since you've been on both sides, maybe you could help to provide us or me as a lawmaker with some kind of policy ideas going forward.

Thank you.

May I answer?

You're of course.

Yes. I would be happy to work with you and the committee and other stakeholders to resolve this issue because I know it's a valid issue. But I don't think this bill is the solution. Understood. Thank you.

Any other questions? Okay. We'll take a short recess.

Okay. Reconvening this 09:30am agenda to move on to the next measure which is SB 2764 relating to condominiums.

This measure clarifies that condominium associations may apply any payment from or on behalf of an owner to amounts due by the owner under a money judgment in favor of the condominium association. First up, we have CAI in support.

Good morning, Chair, Vice Chair, and Senator. Julie Sparks, on behalf of CAI. We support this bill because it provides clarification on how a money judgment that the association has obtained via legal procedure can be handled. Right now, the statute's silent. It doesn't refer to money judgments at all, and so payments received from an owner under the current statute cannot be applied to a judgment.

And we would think that once the association has gone through the trouble of getting a judgment, a court has adjudicated whether the amounts owed are valid, adjudicated the attorney's fees to determine reasonableness, that payment should be applied to that judgment. And we've also suggested some further clarifying amendments for consideration.

Thank you. Jeff Sadino in opposition.

Good morning again, Chair, Vice Chair, and member. My name is Jeff Sadino, and I oppose this bill as strong as I possibly can. Over the past year, I was involuntarily promoted to be the president of my board by my other board members, but speaking as an individual. But I think this bill would actually make it more difficult for my association to collect money, not less difficult.

So, if an owner owes a $200,000 judgment and their maintenance fees are redirected to that judgment, it's going to create an artificial delinquency on their maintenance fee account, which then gives the association the legal right to do a nonjudicial foreclosure.

So, for example, say I pay $150,000 to pay down that $200,000 judgment. At any point in time, the association has the legal right to do a nonjudicial foreclosure on me. So, I would lose the $150,000, and I would also lose my home. So, I would never ever put myself at the mercy of an association that already filed a lawsuit against me.

So, instead of the current status quo of paying my maintenance fees and trying to work out some sort of way to pay the judgment, I just would not pay anything at all and abandon my property.

So this bill is bad for the associations, and it's bad for the owners too. So, it's actually gonna do the exact opposite of what it is trying to do, so I urge you to defer. Thank you.

Thank you very much. Collection law section of the Hawaii State Bar in support.

Good morning, Chair Keohokalole, Vice Chair Fukunaga, and Senator McKelvey. My name is Paul Ireland, and I'm testifying on behalf of the Collection Law Section of the Hawaii State Bar Association. The Collection Law Section supports SB 2764, but with minor clarifying amendments to Section 2, which are consistent with CAI's suggested amendments. This bill addresses an unintended consequence of Act 195 of 2018 and Acts 192 of 2019 involving how condominium associations must apply payments from unit owners after a court has entered a money judgment.

Before those acts, associations could apply payments and a Board adopted order of priority, including applying payments first to a money judgment.

But that authority was essential to ensuring that judgments were meaningful and enforceable. When Act 192 clarified how payments should be applied to common expenses, it did not correct other serious problems created by Act 195. And one of those is that associations are now effectively prevented from collecting on court-ordered judgments from owners who remain part of the association. As a result, even after investing significant time and expense to obtain a judgment, often as a last resort, associations may be unable to collect it.

This leads to unjust outcomes.

This result is that the court orders are weakened and judgments become practically unenforceable in certain situations. These consequences do not just harm associations. They harm compliant unit owners. And when judgments go unpaid, the financial burden is often shifted to the rest of the community through higher assessments, effectively rewarding noncompliance. Senate Bill 2764 fixes this problem by clearly allowing payments to be applied first to an unpaid judgment interest, principal, and associated costs, and attorney's fees.

It restores balance, respects judicial authority, and promotes fairness without expanding association's powers beyond what the courts have already awarded. For these reasons, the collection law section respectfully urges the committee to pass Senate bill 2764 with our proposed amendments, and I thank you for the opportunity to testify.

Thank you very much. Lourdes Scheibert in opposition.

Not present on Zoom, chair.

Mister Masakian.

Aloha, again, members of the committee. Greg Masakian. I'm in strong opposition of this bill. I didn't say strong in my written testimony, but after listening a little bit more to this, and understanding what I know from being a board director at my condo association

There are means to get the money from a judgment. And in the case, which is a public case, so I can speak on it, at my condo association, where, again, it was a targeted retaliatory animus towards an owner for a dispute that I felt was a valid dispute, and he withheld some maintenance fees. So, he was at court for that, and it was a large award by the court, but it was reduced from what was asked.

And then there was a garnishment of his bank accounts. That's how the judgment was paid.

So, there's a way to do that through a court order. There's also other court orders that could come for, you know, making payments, and then you have the process of collections that you could go through. The priority of payments that was put into play when it was improperly in play to correct the injustice is correct. And if there's a slight amendment on the priority of payments from when that was changed through that act, then go back and look at that.

But this bill, as written, is very harmful to condominium owners.

And it's going to be more problematic, as the last testifier said. It's going to affect more targeting and more money that's coming out and more foreclosures and more harm. And, again, I urge you all to avoid a lot of this SB 3309, which is a condominium ombudsman, which I hope you schedule for a hearing. Thank you.

Thank you. Okay, in total we had 22 written pieces of testimony. 14 in support, eight in opposition. Is there anyone else who would like to testify on this measure? Members, questions?

Okay. We'll move on. The next measure is SB 2765 relating to condominiums. This measure clarifies that condominium associations that have obtained title to a unit through foreclosure, may retain rental income received prior to the appointment of a commissioner in a subsequent foreclosure. Provided that the association may be required by a court to remit rental income received after the appointment of a commissioner.

Hello. Good morning. Good morning, Chair, Vice Chair, Senator McKelvey.

Hold on. Hold on.

Sorry. Sorry.

Okay. Are you are you Mr. Walker from CAI?

Yes. Hi. Good morning.

Yeah. I got you. Okay. Please go ahead.

Good morning.

Okay. Sorry about that. Good morning. So, I really think this should be a bill where the COCOA Council and CAI should be aligned because either the money is gonna stay with the association.

Can you please identify yourself and your position on the bill? Thank you.

I'm so sorry. Yes. My name is Dallas Walker. I'm with CAI, and, I'm here in support. So, you know, either the money is going to stay with the association for the benefit of the owners or it's gonna go to the bank.

A couple of people oppose the removal of the language for the benefit of the owner, that language, but I think it can be added back in. We can put our heads together and figure that out. That's not the problem that the bill is trying to address. The, the problem is the circuit court is confused about the timing of when rental excess rental income is calculated. So to be clear, this bill upholds the original intent of the legislature as enacted in 2013.

The plain wording of the statute is that excess rental income is only you you start counting that after the bank forecloses. But the circuit courts are are counting income received before that. So in this horror story example I provided in my written testimony, basically, a homeowner died with no heirs. That's usually how this issue comes up. The AOAO foreclosed, and then the bank foreclosed thirteen years later.

And so the court counted rental income going back thirteen years when it should not have. And so it ordered the association to pay the bank $71,000, which, for a, you know, a 23 unit condominium is over $3,000 a person. So and meanwhile, the bank got the property. So it's just not equitable. I appreciate your time.

Thank you.

Thank you very much. Next, we have Paul Ireland in support.

Good morning. Paul Ireland in strong support. I'm testifying today in my personal capacity, not as a member or a board member of the collection law section. While I support this measure, I'd ask the committee to pass it with clarifying amendments. This bill addresses how a rental income is treated when a condominium association acquires title through, foreclosure.

And I want to be very clear. Associations are not, for the most part, doing nonjudicial foreclosures anymore. These cases are often moving forward from a result of judicial foreclosures. And in these limited but significant situations, associations that do take title through foreclosure, they do so to stop ongoing financial losses by prolonged non payment of common expense assessments. But after foreclosing on an association lien to mitigate those losses, associations may temporarily rent out the unit.

Under current law though, associations are treated differently from every other property owner in Hawaii who buys property in foreclosure. Unlike a private or institutional landlord, associations are required to turn over so called rental excess rental income to the court, and ultimately it goes to the lender. It never reaches the unit owner. So even though they hold the association hold holds title to the property and bears all the risks and costs of ownership, they have to do that. No other foreclosure purchaser is subject to this rule.

This statute also fails to account for the reality of delayed mortgage foreclosures. Associations must act before senior lenders in often cases to protect their communities. Yet they're penalized for those delays by being required to disgorge rental income for the benefit of ultimately the senior lien holders despite delays that the association did not cause or cannot control. This result is not equitable. Associations maintain the property.

They pay insurance. They manage tenants. They preserve habitability, But they're effectively forced to act as uncompensated custodians of rental income without the protections or compensation afforded to even a court appointed commissioner. Thank you.

Thank you.

Gregory Misakian in opposition.

Aloha again, members of the committee. Just to clarify also, because when I first testified on the first bill, I just mentioned my background, but I'm here in my individual capacity for all bills today. I'm not representing any organization because I heard him mention, Kokua Council. While I do oppose this and I did a very simple I didn't do my usual testimony of writing lengthy things or putting comments in.

I did oppose this bill, but I am willing to agree if the committee was willing to agree to look to amend it somewhat. As a director on my condo association, I also know there's issues with this, and we've had numerous condominium units in the building where we had an issue with trying to rent out and having a money situation that had became a judicial issue.

So I respect what was said earlier, but I also believe that if an owner loses a property for whatever reason, it's sad, and if the association as long as they get made whole with the maintenance fees, any expenses to rent out, if there is a profit on top of that, that if there is a settlement where it's all settled out at some point in the future and they have to give that profit back, I'm okay with that as long as the association is made whole.

Because if that unit was actually not rented out and owned by the association through that process, then that money would never be in play. It would never come into the association, so that's a profit.

My association is actually not incorporated, and I didn't even know that till recently, to be quite honest, because we were told I never even looked it up till recently. But there's incorporated and unincorporated, and there's tax liabilities and other issues with the money that's coming in. So I would ask to look at that and see if you can amend it. I'd be happy to review if you're able to do that and make a suggestion for, moving it forward. Thank you.

Thank you. Okay. Is there anyone else who would like to testify? Mr. Nerney.

Thank you, Chair, Vice Chair, and Senator McKelvey. My name is Phil Nerney, and I'm simply testifying as myself. I was involved in this enactment, and the issue between the banks and the associations in terms of priority was highly contested. And this was the compromise that they had to get a judgment first. And at that point, then their priority kicked in and then the associations functionally served as rental agents.

We didn't like that, but it was clear, absolutely stone cold clear at that time that the compromise was they get a judgment and then they're in the driver's seat. And I think that should be clear to the courts. Thank you very much.

Thank you. Is there anyone else? Okay. Member oh in total, 20 pieces of testimony 17 in support 3 in opposition. Members questions?

Okay. We'll move on to the next measure SB2433 relating to condominiums. This measure requires the Real Estate Commission to adopt rules to recognize and define condominium unit owners as stakeholders. It also requires the Real Estate Commission to involve condominium unit owners in consultations and activities funded by the Condominium Education Trust Fund. Hawaii Real Estate Commission in support. Good morning.

Good morning, Chair Keohokalole, Vice Chair for the members of the committee. Great to see everyone again. My name is Keating Klein testifying on behalf of Derek Emane and the Hawaii Real Estate Commission. The commission stands and has written testimony in support, and I'm available for any questions. Thank you.

Thank you very much. Community Associations Institute in opposition. Good morning.

Hi. Hi. Good morning. Dallas Walker on behalf of CAI. I'll stand on my written testimony. Thank you.

Thank you very much. Phil Nerney in opposition.

Stand on my written testimony.

Thank you for standing on your testimony. Lourdes Shivert in support.

Not present on Zoom, chair.

Thank you. Gregory Mesakian in support.

Again, members of the committee, just a very quick comment. I support this measure, and I do wanna remind, everyone in the room and everyone that may listen to this at some point that all condominium owners are stakeholders when they go to their Board Meetings and annual meetings and participate in the process. It should be a democratic process. We know it not always is with proxies and other concerns. But if you go, participate more, it'll be helpful.

But I do realize that, unfortunately, that's not the way the world works. People are busy. People own condominiums that are off island. There's many, that don't live in the buildings, and they're just you know, renting out their condominiums. So with that said, I do support this, but I do again, feel that, having a seat at the table at these different meetings is important but, ultimately, having a place to go when there's a problem where you can get proper help.

And, unfortunately I truly respect Heaton, but the DCCA is not the place where I have gone to get help. Usually, I get not much help, and they can't assist you. Oh, we're not attorneys. We can't assist you.

Even when I've gone to call the RICO office to try to get questions or file a complaint, nobody was around 1 day, and I was trying to file a concern regarding illegal work being done and a project that did rise to the level of a RICO complaint to the management company.

And long story short, nobody ever got on the phone with me to assist me. And then I got a nasty letter from the director, which someday I'll share with this legislature because that is not something that I ever expected. I was simply calling and stressing an urgency that I needed to get help, but it was over the course of a whole day, and nobody was ever ever able to help. Keating's staff are the people that work in his group.

They usually just say, you know, we're not attorneys.

We can't assist you. They don't give you much guidance. So I've had had some dialogue, but owners need a place to go for assistance, and that's the ombudsman's office. Thank you.

Thank you. Is there anyone else who would like to testify on this measure? Okay. In total, we had 11 submit written testimony in support and 5 in opposition. Members, questions?

Okay. If not, we'll move on to the next measure, SB2838 relating to condominiums. This measure requires the DCCA to establish a publicly accessible online portal for condominium association information and documents submitted to the real estate commission, with registrations to be funded by an additional condominium education trust fund fee. Real estate commission with comments.

Aloha Chair, Vice Chair, Members, Keating Steinhardt and Susskind on behalf of Derek Amon and their Hawaii real estate commission. I will stand on our written, testimony offering comments and available for any questions. Thank you.

Thank you. CAI in opposition.

Thank you, Chair, Vice Chair, Senator McKelvey. My name is Phil Nerney. I chair the legislative action committee for CAI. CAI is opposed to this measure. Condominium Associations are private organizations.

Their information is not public or for the public. In terms of the governing documents of the Association, those are recorded documents available to anybody. They're also available to owners by virtue of legislative action. One of the particular examples in the long list of information that's proposed to be public is contracts. Can you imagine if every contract of every condominium association in the state were public?

That is a formula for price fixing. And similarly, the minutes of the association, private and personal things come up within an association. There are communities. Now, there are circumstances where things are said about individuals in the minutes, whether that's right or wrong. But if you then make that public, that is a step too far.

So what I am indicating is that certainly with respect to contracts, that is a major no-no because that's a price fixing opportunity. And then just the fundamental point is these are private organizations. The public information is what are the governing documents. There's a lot of information already required in terms of disclosures, for the resale of units and that's appropriate. But this bill is not.

Thank you.

Thank you very much. Christine Morrison in support. Okay. Gregory Basakian in support.

Again, Greg Masakian. I do support this measure and I also understand what those in opposition are concerned about because I do serve as a director again on my condo association. So with that said, what my suggestion is with this measure is for sure we wanna make sure the the public documents, things that we would expect to be public documents, are available on the DCCA's portal.

But for the other documents that are being requested, and I, I did look at the list, but maybe I missed a couple of them. Within the condo association, there should be a portal for the owners for those documents, and the cost of that should be borne by the condo association.

So it's not that, that difficult to do that. The management company should oversee that process. We already have that. Our management company is associated. We have a portal that they use which is called our website Town Square.

It's used quite extensively throughout, I think, the country, And I know Hawaii probably has something they use. They might even use the same thing. So making it required to be within the association, and all of those documents should be available. If there's a contract, why wouldn't the owner not have the ability to see that contract? They're paying the maintenance fee for that contract.

So put those things. Now, there's got to be some limit to it. It can't be every single document, but make it reasonable. So you could actually modify this, I believe, if there's a possibility to do that. Then there's no state funding required.

Well, unless there's an element that's missing from what's on the DCCA, so there might be a little bit there. And then put it on to the association for the additional documents. That's what I would suggest to do. To me, that makes the most sense. Thank you.

Thank you.

Okay. That's everyone who signed up. Is there anyone else who would like to testify? Please.

Hi. Raylene Tenno. I'm testifying on my own behalf here. Thank you, Chair, Vice Chair, Senator McKelvey. So in my own capacity with requesting documents from the association So I have a couple that are outstanding with my own association.

One of them was for my own accounting ledger, and, I sent it, in August with my check for the main industries for the rest of the year. That was in August. And then in December, I'm thinking, God, I never got that back. So I sent another letter for accounting. I'm still waiting for my accounting ledger.

A year ago, I did the affidavit for in advance for all of twenty twenty five's financials. And I counted some of the past financials, how many pages, and I made the check to include so I wouldn't have any roadblocks. They would have the money upfront. I'm still waiting for 2025. And even in Board Meetings, I've said, hey, I'm still waiting for it.

You know? So if I have to go to the next step of hiring an attorney, yeah, I would like to have my attorney fees reimbursed back. Because I've made every effort. Even the former director with, Rico, Daria, she always told us they want to see the efforts made. And I think after I've gone to two, and there's one time even Rico goes, well, you went beyond because you did four.

I'm like, well, I wanted to make it, you know, give them the benefit of the doubt. So I did that. And even Richard Port goes, always give them the benefit of the doubt. So I did that. But it took tremendous amount of time to get those documents.

And so I'm still facing it today. Nothing has changed. And so if I have to go to the next step, I I should be able to be reimbursed of my attorney fees for their noncompliance for something simple. You know? They've never communicated to me as the reasons why I can't get it.

Okay? Thank you.

Thank you. Is there anyone else?

Good morning.

Good morning. My name is Stafford Ritchie. I have been a resident of Hawaii since 2016. I'm a retired attorney from 2016 to 2020. I lived on a neighbor island and was president of a condominium association.

Since 2020, I have lived on Hawaii on Oahu and am an owner of a condo here. There is definitely a need for a robot more robust mechanism to compel associations to disclose documents to owners. My governing documents require the association to provide an annual financial report to the owners. Since 2020, I have never received one of those reports. I have raised issues of concern about the preparation of the budget.

And in response to my request for documents, the association demanded that I pay more than $1,500. I, I commend to this committee the Craven decision of the Supreme Court of Hawaii of last year, in which it found when a document has been created in the normal course of business and can be made available to owners through a portal, It should be done so rather than the managing agent seek to collect more than $1,500 from me.

Even though I did not receive those reports, I ultimately got an unaudited financial statement and found that the association in the in the middle of the night had written off almost $300,000 of assessments without any explanation to owners without even disclosing it to owners. Again, there's a more a a dire need for a more robust disclosure mechanisms to be imposed upon associations. Thank you.

Thank you very much. Is there anyone else who would like to testify? Okay. Members, questions? Okay. If not, we'll move on to SB 2949, relating to insurance. This measure establishes the Ombudsman's Office for Homeowners' Insurance within the DCCA and establishes the Ombudsman's Office for Homeowners' Insurance Special Fund. First up, we have the DCCA Insurance Division with comments. Good morning.

Good morning, Chair, Vice Chair, members of the committee. Jaymie Yamamoto, on behalf of the Insurance Division. So for this bill, we did offer comments, and I just wanna highlight the central theme in our testimony, which is that we wanna ensure that any ombudsman framework complements the existing regulatory functions, avoids duplication, and doesn't create unintended conflicts of law.

So, again, we just wanna ensure that any proposed-- that should there be a proposed ombudsman office that it is part of a system that coordinates efforts for purposes of maximum efficiency and effectiveness, and I'm available for questions. Thank you.

Thank you very much. CAI, in opposition.

Stand on our written testimony, Chair.

Thank you very much. Gregory Misakian with comments.

Aloha, again. Greg Misakian, and I'm gonna read this so I don't say it improperly. As we know, on Mount Ka'ala, where they say: the gondola does not belong-dala, SB 2949 does not belong-dala as much as SB 3309 does, where we are talking about condominium bills today. I did ask the chair and all committee members to please add it to the agenda.

There was time. Hopefully, we'll see it soon. And if nobody heard--I didn't hear the laughs, but when I heard the gondola does not belong-dala or saw it on the news, I had-- I couldn't stop laughing at that. But I think we all know about Mount Ka'ala, the gondola there. So I do ask, hopefully, to respect that the bill that is proposed-- there's a House bill which is bipartisan, HB 2453, and this is the companion bill that was introduced by Representative Ihara.

We're all talking about condominiums today, and I know the insurance issue is important, but the condominium issues are very important. And there is an office, the Department of Insurance, and there's a place to go to ask for help there. We need a place to go for condominium owners for help, and it's imminent that-- I mean, if it doesn't happen, it's just gonna snowball and get much worse.

My condo association fee is over $1,200 a month now for no amenities and a building that is in dire need of help, with fraud-- what I call fraud projects and other concerns, and I started at about $570 when I bought in 2019. So from 2019 till 2026, I'm now paying over $1,200 a month with no amenities. Many condo owners are facing the same thing, and it's not just because of the insurance crisis. So we have issues that we need to address.

So I really urge this committee--because we're talking about ombudsmen--please schedule SB 3309 so we can talk more about it. It's a very simple bill. It requires no state funding. It's non-binding. It will help condominium owners, and there'll be an attorney there that can actually give legal advice and make a non-binding decision that hopefully directors or owners will listen to.

Thank you.

Thank you.

Is there anyone else who would like to testify on this measure? Seeing none, members, questions? Senator McKelvey.

CAI. This is a bill for an insurance ombudsman. Why would you guys be opposed? That's nothing to do with condominiums.

It's obviously an entering wedge for what the--

No, it's not.

--last testifier just said.

It's not. It's not. This bill is not about anything to do with condominiums. This came to me from a group that works with policyholders in other states for insurance, and they've been giving free help to people who trying to work through insurance documents and stuff, and they're the ones that came up with the idea. So this has nothing to do with condos.

It's unusually similar to proposals for condominiums--

But I want you to know what your imbibing motive, okay? The motive is nothing to do with condos. So you're making a reach here that doesn't exist. Thank you.

I understand, and thank you for that clarification.

Any other questions? Okay. If not, we will take a recess.

Okay. Coming back for decision making on this Friday the thirteenth, 09:30am CPN hearing.

The first measure, it was, SB2294 relating to common interest communities. The recommendation is to pass with amendments. What we're going to do is add language to clarify that any action by an association board or managing agent pursuant to the powers enumerated under Chapter 5-14B shall comply with applicable laws, rules, and regulations.

We're gonna we're gonna take out the specific provisions relating to associations, boards, and managing agents and we're just gonna read We're gonna clarify that five fourteen b, all activities under five fourteen b need to comply with the law. We'll also defect the effective date of this measure to 07/01/2050.

Any discussion? Okay. Seeing none, passing with amendments, Chair votes aye.

[Roll call]

Senator Awe is excused. Your recommendation is adopted.

Thank you very much. Next measure is SB2298 relating to common interest communities. I I appreciate the conversation on this measure. The recommendation is to replace the proposed amendments to section four twenty one I and instead add language consistent with the existing provisions under 4-21J and 5-14B. So just unify the rules across the board.

There are also texts, technical non substantive amendments and will defect the effective date to 07/01/2050 to keep this conversation going. Any discussion? Okay. If not, passing with amendments. Chair votes aye.

Thank you. Of the CPN members present, any voting with reservations or objections? Hearing none, your recommendation is adopted.

Thank you very much. The next measure is SB2300. This is relating to cash flow plans and projections. I appreciate the conversation. It's a tough one, but the recommendation is to divert defer this measure. K.

If there are no objections, we'll move to next the next measure, SB2037 relating to condominiums. The recommendation on this measure is to amend the bill to clarify that the time to initiate an appeal shall be determined by the association's governing documents. Amend language to clarify when a fine shall be deemed collectible to also include a potential challenge of a fine in small claims court. We will remove the 25% limit on attorney's fees and costs.

And I would also like to note that the amendments to the trial de novo language are consistent with rule 25 of the Hawaii arbitration rules concerning the determination of a prevailing party in a trial de novo challenging an arbitration award.

We'll defect the effective date of this measure to 07/01/2050 to keep the conversation going. I think for those of you who have been attending these the the this committee's hearings on condominium measures over the last several years. You know, we organize we try to organize all in one day, and we try to make it simple and let everybody have a say here because we want to keep both sides out of court. That's the objective here. So we're trying.

Any discussion, Members? Okay. Seeing none passing with amendments, Chair votes aye.

Thank you. Of the CPN members present, any voting with reservations, objections? Hearing none, recommendation is adopted.

Thank you. Next measure is SB 2764, relating to condominiums. I appreciate the conversation on this measure. At this point, the recommendation is to defer. Any discussion? Okay. Seeing none. Next measure is SB 2765, also relating to condominiums. Recommendation is to pass with amendments adopting the proposed amendments submitted in testimony by Mr. Paul Ireland Koftinow.

We will also add back in the language for the benefit of the unit owner as suggested by Mr. Walker on behalf of-- who testified on behalf of CAI, and we'll defect the effective date of this measure to July 1, 2050 to keep the bill moving. Any discussion, members? Okay. Seeing none. Passing with amendments. Chair votes aye.

Thank you. Of the CPM members present, any voting with reservations? Objections? Hearing none, recommendation is adopted.

Thank you very much. The next measure is SB 2433, relating to condominiums. The recommendation is to defer action on this measure to Wednesday, February 18th at 9:25 a.m. here in Room 229 at the State Capitol to see if we can make some changes that can keep this bill moving. The next measure is SB 2838, relating to condominiums.

You know, I'll just I'll just preface. The proposal to create a dashboard online, I am not inclined to support. I will note last year, we passed Act 161, which requires condo associations, requires them to provide electronic copies of their governing documents to unit owners or authorize agents upon request. So when requested, they have to email the documents. So I I wanna try that approach.

We'll defer to next week to figure out if we can make You know, tack onto that in a way that makes sense and doesn't require the disclosure of, you know, private information that that we shouldn't be forcing condo associations across the state of Hawaii to put online. And the last measure on this agenda is SB2949 relating to insurance. The recommendation is to pass this measure with, technical non substantive amendments and a defective effective date of 07/01/2050. Any discussion? Okay.

Seeing none passing with amendments, Chair votes aye.

Thank you. Of the CPN members present, any voting with reservations or objections? Hearing none, your recommendation is adopted.

Thank you very much. We have a caucus imminently.

We're now.