Hawaii Condo Law

On June 17, 2008, the U.S. Justice Department (”DOJ”) published a notice of proposed rulemaking on the Americans with Disabilities Act (”ADA”). Title III of the ADA provides protections to disabled individuals in places of public accommodations. The ADA requires, among other things, that public accommodations remove architectural barriers to disabled individuals that are “readily achievable”. Readily achievable generally means that it can be easily done without much expense.

Most purely residential community associations are not governed by the ADA, but are instead governed by the Fair Housing Acts. One exception, however, is if the project contains places of lodging. There are a number of provisions that affect community associations, but of particular interest is the proposed definition of places of lodging. The proposed definition would eliminate time share units (at least when it is not involved in an exchange) from the definition of place of lodging. However, the proposed regulations and questions posed by the DOJ raises concerns for any community association that has transient accommodations.

By way of background, the DOJ’s ADA Standards requires a certain number of rooms in places of lodging to be modified for disabled individuals. This makes perfect sense for a hotel. In a 200 room hotel, 8 rooms are required to have mobility features, including 2 with roll-in shower stalls. The following issues arises in condominiums:

1. Who decides which owners have mobility features? Associations typically don’t have the authority to direct owners to make modifications to their own units.
2. Who pays for the modifications to the rooms? One might suggest that since all the owners renting their units on a transient basis benefit, they should all pay, but the owners renting their units on a transient basis change all the time.
3. What happens when an owner with a modified room leaves the rental pool? Since owners own their units, they can decide whether or not to rent it, but now you’re short a modified room.
4. What happens when an owner joins the rental pool? If it triggers a larger number of rooms modified for disabled individuals, what happens? Even if it doesn’t, does this person now pay for the modifications to the other rooms?

The DOJ’s questions point out some concerns for community associations with transient accommodations. In Question 54, the Department of Justice asks:

How should the Department’s regulation provide for a situation in which a new or converted facility constructs the required number of accessible units, but the owners of those units choose not to participate in the rental program? Does the facility have an obligation to encourage or require owners of accessible units to participate in the rental program? Does the facility developer, the condominium association, or the hotel operator have an obligation to retain ownership or control over a certain number of accessible units to avoid this problem? [Emphasis added.]

In Question 55, the Department of Justice asks:

How should the Department’s regulation establish the scoping for a time-share or condominium-rental facility that decides, after the sale of units to individual owners, to begin a rental program that qualifies the facility as a place of lodging? How should the condominium association, operator, or developer determine which units to make accessible? [Emphasis added.]

Note that the DOJ is not asking whether the condominium association should make the units accessible, but how should do it. It seems to assume that the association has control over whether units in the project are rented by the owners and that the owners are renting units on a joint basis. Why should owners not renting their units on a transient basis pay for making units accessible?

If your association is potentially affected, you may wish to present your comments to the DOJ. Simply click the link and enter: “DOJ-CRT-2008-0015-0001″ under Comment or Submission.

I realize that I’ve been remiss in posting anything for this legislative session. We’ve been extremely busy, but we’ll be making up for that by posting some of the new laws that affect community associations.

Act 13 (SB 1809) was signed by the Governor and became effective on April 15, 2008. It amends Hawaii Revised Statutes §514B-121(b). Previously, the Hawaii Condominium Property Act required that if 25% of the owners signed a petition calling for a special meeting, the Secretary or Managing Agent had fourteen days of receipt of the petition to mail out a notice of the special meeting to the owners. If the notice was not mailed out in that time frame, the petitioners could set the date, time and place of the meeting and mail the notice to all owners.

The law did not have a time period by which the special meeting was required to be held. For instance, as long as the notice was sent out within the 14 day deadline, it was theoretically possible for the special meeting to be noticed 7 months later. Act 13 requires that the special meeting be held within 60 days of the receipt of the petition. One timetable for special meetings for condominiums that wish to mail out standard proxy forms with the notice of the meeting would be as follows:

There is no requirement, however, that the Association send out proxy forms to the owners at Association expense. If standard proxy forms are not mailed out by the Association, the notices of distribution of proxies do not need to be posted in prominent locations on the Project. It will be important, however, for interested owners (whether petitioners, board members or other owners) to distribute their own legal proxies at their own expense. Otherwise, the interested owners will be relying on the votes of those owners that attend the meeting in person or have their own proxy forms.