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.

The big news of the day (with the possible exception of the announcement of Greg McMackin as the warrior’s football coach) is that the 2008 Hawaii Legislature opens today. As usual, we will be providing information about legislation that affects community associations, including commentary on the impact of bills if they are adopted. It is always difficult to predict what will happen during a legislative session, particularly when it’s an election year like this year. Hopefully, we’re only looking at some minor corrections to the community association laws rather than wholesale modifications of the law. In the next few weeks, I’ll be providing information about some of the major bills affecting community associations.

Most of you are aware that the Hawaii State Legislature is in session to consider the super ferry bill. In addition, by law, the Senate is required to consider any appointments by the Governor to judgeships, cabinet positions and commissions. However, since no action involving community associations is likely, I was thinking that I didn’t have to say anything in the Hawaii Condo Law Blog. Then I realized that it was important to point that out so you’d know that we weren’t expecting any legislation involving community associations. If that changes, you’ll see something here.

This post lists the bills and resolutions of interest to community associations that passed this year.

Ordinance 07-2 - Notification of Dog Bites — This law requires medical service providers and veterinarians to report incidents of serious bodily injury from a dog bite to the Honolulu police. The police are required to forward the incident report for investigation by the animal control contractor (currently the Hawaiian Humane Society). The animal control contractor is required to make a determination whether the dog is dangerous.

This law does not directly affect community associations since it is unlikely that community associations, their directors or employees would be required to provide the notice. However, since incidents with dogs is a growing problem for community associations, the reporting requirement may result in actions to remove dogs from communities.

Ordinance 07-3 — Unsafe Motor Vehicles Near Schools — This law prohibits the parking of dangerous vehicles on public streets in a school zone. A dangerous vehicle is: (a) one with an exterior part that is sharp, pointed or jagged; (b) a broken windshield or window; or (c) an unlocked or open door or window that would permit access to sharp, pointed or jagged parts.

Once again, this law does not directly affect community associations, but it may affect parking by association residents on public streets.

Ordinance 07-10 — Real Property Tax Classifications for Condominiums — This law eliminates the distinction for real property tax purposes between improved residential, unimproved residential and apartment uses. Over the years, the City and County of Honolulu have been adjusting residential real property tax rates so that the rates for condominiums are now the same for other improved residential property. For the fiscal year ending June, 2007, the tax rate for $1,000 net assessed value of land was $3.59 for both improved residential and apartment properties. This new law finalizes the process of equalizing the tax rates and creates a single tax rate for all residential property beginning with the tax year beginning July 1, 2008. We anticipate, however, that for the tax year commencing on July 1, 2007 that the tax rate for condominiums and improved residential property will be the same.

Ordinance 07-22 — Adoption of 2003 Edition of the Uniform Building Code — This law adopts the 2003 Edition of the Uniform Building Code. The law becomes effective on September 18, 2007. Community Associations making modifications to their projects after that date may need to comply with the new edition of the building code.

Ordinance 07-29 — Sewer Rates — This law adopts new sewer rates for the City and County of Honolulu. The new rates will be effective on July 1, 2007.

In honor of Flag Day, I wanted to remind you that community associations are subject to the Freedom to Display the American Flag Act of 2005. As explained in my July 25, 2006 post, associations are limited in its ability to prevent a member of the association from displaying the flag of the United States on residential property to which the member owns or has a right to exclusive possession or use. A member’s right to display the flag is not unlimited, however. You may wish to review the July 25, 2006 post.

This post lists the bills and resolutions of interest to community associations that passed this year.

Bill 50 (2007) was introduced in the Honolulu City Council to require the existing highrise residential buildings that are not equipped with automatic sprinkler systems to have a fire-retardant coating applied to the building exterior as well as the interior walls and ceiling surfaces of all common areas. If the bill passes, the retrofit would be required to be completed by January 1, 2013. The bill has been referred to the Committee on Planning and Sustainability which is chaired by Councilman Gary Okino. The members of the committee are Romy Cachola, Todd Apo, Ann Kobayashi and Rod Tam. No hearing has been set for the bill.

This post lists the bills and resolutions of interest to community associations that passed this year.