HAWAII COMMUNITY ASSOCIATIONS

HAWAII COMMUNITYASSOCIATIONSA PUBLICATION OF COMMUNITY ASSOCIATIONS INSTITUTE - HAWAII CHAPTER

Volume 22 Issue 1 February 2008

continued on page 2

2008 is in fullswing and wehave all recoveredfrom an enjoyablebut hectic HolidaySeason.

Addressingthe business of a CommunityAssociation, we find ourselvesinvolved with the AnnualMeetings and election of direc-tors. Steve Glanstein provides usinformation on the qualificationsof Parliamentarians and LillianMcCarthy addresses some typi-cal issues faced by the Board ofDirectors.

Selecting qualified boardmembers is a challenging task foran Association because oftencandidates are not familiar withthe responsibilities, limitationsand expectations of the role forwhich they have volunteered.One very valuable resource is theCAI Hawaii ABC’s seminarscheduled for Saturday, April 26at the Japanese Cultural Centerand repeated in Kona in June2008. It provides a basic founda-tion for new board members anda refresher for existing members.Some states require members ofboards of directors complete adesignated number of hours ofeducation and Associationsshould include money in theirannual budgets provide for this.Hopefully educated board mem-bers will make decisions thatbenefit their entire Association’sneeds.

President’sMessage

There has been much controversy and confusion about the topic of trespass-ing over the years. Our lawmakers recognized the seriousness of this offensewhen it comes to certain types of properties. In an effort to curb prostitution thelegislature made trespassing in or on an apartment building a violation of criminaltrespass in the first degree, a full misdemeanor punishable by up to a year in jailand a fine of not more than $1,000.

That law reads that a “person knowingly enters or remains unlawfully in adwelling or in or upon the premises of a hotel or apartment building….” The keywords here are that the suspect “knowingly enters or remains unlawfully.”Translated into layman’s terms this means that the person must know that they aretrespassing without any permission from the landowner or occupant and/or that ifthey are asked to leave and refuse to do so they are trespassing. This soundssimple enough but it can get complicated when you live in a building with otherpeople who have the right to invite guests to the property.

If a person enters your home without permission or stays after being asked toleave, whether it is a single family house or an apartment or town home, trespass-ing is a pretty simple and clear concept. If that happened then they are trespass-ing and subject to arrest under Section 708-813 of the Hawaii Revised Statutes.

Now comes what can be the messy and practical part of enforcing this law.Living in a community association environment can cause chaos when it comes todealing with trespassers. Who are they? How do you determine who is a trespass-er? When are they trespassing? All of these questions can be answered with clearpolicies set by the association board that are clearly stated to all owners and resi-dents and enforced with a strict and fair standard.

It should be clear that anyone who does not reside and who has not been invit-ed onto the property is a trespasser and should be treated as such. Also, invitedguests and even family or friends who have been asked to leave and don’t, shouldbe treated as trespassers. Keep in mind that you shouldn’t just ask such a person toleave without a clear and justifiable reason. Doing so may get you in more hot waterthan it’s worth. Finally, anyone who poses a threat to any of the resident’s safety orproperty should be considered a trespasser and treated as one.

But does everyone get arrested and go directly to jail? No. How then do youhandle these persons? Again, policy makes for the best practice.

First of all, the board of directors should designate someone with the authorityto represent the entire association in this matter. This is usually a security guard orresident manager. These people would act on behalf of the association in identify-ing the trespasser, notifying police and making any and all court appearances thatwould be required to prosecute the accused.

Secondly, trespassers should be identified by generally using the criteria men-tioned above and on a clearly objective basis. This means that you pick and

Some Facts about Trespassingand How to Handle ItBy John McCarthy

continued on page 8

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P.O. Box 976, Honolulu, Hawaii 96808(808) 488-1133

email: [email protected]

OFFICERS AND BOARD OF DIRECTORS

President Joani TaylorHomeowner, Marco Polo

President ElectAl Denys, PCAMCertified Management

Vice PresidentMilton MotookaMotooka Yamamoto & Revere

SecretaryLois EkimotoHawaiiana Management

TreasurerMary Bergmann, CPAHomeowner

DirectorsPat FujisakiService Printers Hawaii

Steve Glanstein, PRP

Boyd ReadyAkahi Service

Immediate Past PresidentSurita SavioInsurance Associates

NEWSLETTER COMMITTEE

Editor:Lillian McCarthyHawaiiana Management

Jodee Acoba-Suganuma, PCAMHawaiiana Management

Patricia DykstraHawaiiana Management

Pat FujisakiService Printers Hawaii

Legal Coordination:Jacqueline Thurston, Esq.Motooka Yamamoto & Revere

Photographer:G. Stephen Elisha

The Hawaii Community Associations newsletter is pub-lished for associations leaders and other related profession-als of CAI. Authors are encouraged to submit articles forpublishing consideration.This publication is designed to provide accurate andauthoritative information regarding the subject matter cov-ered. It is issued with the understanding that the publish-er is not engaged in rendering legal, accounting or otherprofessional services.CAI Hawaii Community Associations newsletter providesan opportunity for information and/or comment. Articles donot necessarily reflect the viewpoint of the Chapter. Thereader should not act on information contained hereinwithout seeking more specific professional advice.

Hawaii Buildings Facilities &Property Management Expo

Industry professionals with purchasing authority or influence for Hawaii'sbuildings, facilities, commercial real estate and property management compa-nies are invited to attend the March 2008 Expo. The Expo will feature nearly275 exhibits displaying hundreds of new products and services for operations,maintenance, renovation, remodeling, marketing and technology. Free educa-tional seminars will include the following topics: environmental remediation,energy conservation, storm water abatement, solar and wind power for build-ings, recycling, swimming pool management, tenant/landlord relations, greasedisposal, reserve studies and life safety.

Douglas trade Shows, established in Hawaii in 1983, is Hawaii’s largestand oldest trade show production and management company. It is the pro-ducer of Hawaii’s largest annual trade event, the Hawaii Lodging, Hospitality &Foodservice Expo, as well as four annual variety merchandise, gifts, jewelry,apparel and fashion accessories trade shows all held at the Blaisdell Center inHonolulu.

For further information on the Hawaii Buildings, Facilities & PropertyManagement Expo please contact Ken Kanter, the Exposition director, at 261-3400 (Oahu) or go to www.douglastradeshows.com. Advanced registration isnot necessary but is suggested to save time upon arrival at the Expo.

Our Jan. 26, 2008 seminar “Avoiding Disasters at Annual Meetings” with SteveGlanstein’s moderating was well received by more than 125 attendees.

As with all organizations, CAI Hawaii is always seeking assistance from ourmembers. We welcome any time you are willing to volunteer. Please e-mail [email protected] or call 488-1133 and mention your preferred committeeassignment or interests. Volunteerism does make a difference as Ralph Shumwayoutlines in Heroes in our Community.

Steve Pherigo, with back up support from President-Elect Al Denys, is organiz-ing CAI’s participation in the Hawaii Building Facilities & Property ManagementExpo scheduled for March 5 and 6, 2008, at the Convention Center. Our ProgramCommittee co-chairs Milton Motooka and Becky Szucs have arranged for the“Dingbats, Druggies and Damsels, Solving the ‘D’ Problem in CommunityAssociations” seminar to be presented at 8:30-10 AM on Thursday, March 6th.Charlie Remington, Membership Committee Chair, is helping with staffing thebooth and welcomes new members to his committee.

More Board issues are addressed in Milton Motooka’s article about 514b andinsurance, plus Joao Santos discusses the current insurance market.

Current legal issues are outlined in Rebecca Szucs FCC bans “Exclusive”Video service contracts and John McCarthy’s facts about Trespassing. SenatorWill Espero outlines some of the issues for the 2008 legislature and Michael Pangrelates the dispute with The Kailuan Co-op over leasehold.

Co Chairs of the LAC Committee Joyce Neely and John Morris have beenbusily at work soliciting testimony from the committee members for the variousbills moving through the Legislature.

Thank you to all of our hard working committees, to include NewsletterCommittee co-chair Lillian McCarthy and Lindsay Green, our CED.

We look forward to seeing you at the Thurs., March 27th seminar “Dealing withHazards, Asbestos and Mold”.

Joani TaylorPresident

President’s Messagecontinued from page 1

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4

continued on page 18

It is rare one seeks leadership: more often than notthe logical choice is drafted into service. The demands ofthe job are great. Ability has to surpass those greatdemands.

In the arena of community volunteerism, the naturalleaders should be obvious. To run an organization,administrative skills are a must. Being able to juggletasks, delegate, and follow through is crucial. A leaderhas to have the ability to recognize a community’s needs,understand the complexities of different problems, andformulate creative battle plans to accomplish goals whilevanquishing obstacles. Does this sound familiar? This iswhat we property management professionals are paid todo each and every day.

Yes, PMs (Property Managers) and RMs (ResidentManagers) are the obvious choice to lead the efforts forimprovement in our communities. We are already accom-plishing this in our condos, office buildings, rental proper-ties, and commercial centers. The skills we bring to thework table are the very skills needed to affect positivechange in our neighborhoods. And in improving our localcommunities, we are improving our clients’ residing prop-erties.

There have been many property managers and resi-dential managers that have contributed selflessly andearnestly to the betterment of their community. A profileof a few of these “heroes” illustrates what is currentlybeing done.

Kamalani Rodrigues has been with the HawaiiPublic Housing Authority for over eleven years and hasmanaged a variety of low income public housing proper-ties. Security, crime, and drugs have always been scaryissues within public housing projects. Ms. Rodrigues rec-ognizes that these problems can be best dealt with bythe very people they affect: the residents. This is why shehas, for years, been in the forefront of the leadership forcommunity policing efforts throughout Oahu. Her man-agement skills helped foster some of the most successfuland sustainable citizen patrols in Hawaii. The communitypolicing efforts from the residents of Kalakaua Homes,Kaahumanu Homes, Kapiolani Park Terrace, and KalihiValley Homes (to name a few) are awesome! Their grass-roots programs have lifted the pall of fear from their com-munities. And as if this wasn’t enough work for Kamalani,she has spearheaded the stewardship of Makiki Streamwhich led her group of volunteers to receive the Mayor’sEnvironmental Hero Award.

T. Carta, former manager of the Kainalu alongWaikiki’s Gold Coast (and who is now an estate’s majordomo) put together another community policing program:the Waikiki Citizens Patrol (East Waikiki). Her successfulprogram brought neighbors together to walk their turf,

Heroes in Our Communityby Ralph Shumway, ARM®

www.CityMill.com

HAWAII KAIPhone: 396-5151

Fax: 396-4455333 KEAHOLE ST.

MILILANIPhone: 623-3100

Fax: 623-313395-455 MAKA’IMO’IMO ST.

HONOLULUPhone: 533-3811

Fax: 529-5871660 N.NIMITZ HWY.

PEARL CITYPhone: 487-3636

Fax: 488-776898-1277 KAAHUMANU ST.

KAIMUKIPhone: 735-7636

Fax: 735-36803086 WAIALAE AVE.

WAIANAEPhone: 696-6996

Fax: 696-872686-120 FARRINGTON HWY.

KANEOHEPhone: 247-2181

Fax: 235-665846-209 KAHUHIPA ST.

WAIPAHUPhone: 671-1746

Fax: 677-244994-157 LEOLEO ST.

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5

MOTOOKA YAMAMOTO & REVERE Attorneys at Law

1000 Bishop St. Suite 801 • Honolulu, HI 96813

A leader in Community Association Legal Services, providing comprehensive, economical services to

nearly 300 Associations statewide.

timely, experienced advice to keep you running smoothly

effective problem solving and covenant enforcement

efficient, productive collection of delinquent assessments, with monthly reports on all accounts

experienced, effective advocates when the need to litigate arises

Milton M. Motooka Myles T. Yamamoto Terry M. Revere

Randall K. Sing Jacqueline E. Thurston

Kapono F. Kiakona Rebecca A. Szucs

www.myrhawaii.com email: [email protected] Ph: 532-7900

Chapter 514BIn 2006, Hawaii enacted into law a

new condominium statute, Chapter514B. The new law provides a num-ber of benefits that include provisionsto allow Boards of Directors to bettermaintain and repair the project, controldisruptive residents, be more flexible inallowing the use of common elements,and be more flexible in allowing alter-ations to apartments. The new lawalso provides additional tools for asso-ciations and members to addressimportant insurance issues and to helpcontrol the cost of insurance and dam-age claims.

More than a year has passedsince the new law took effect andwhile there will likely be furtherchanges to Chapter 514B to clarifyprovisions; there are benefits for con-dominium Boards to now proceed totake appropriate steps to “opt-in” toChapter 514B.

Most of the management andoperational provisions of the new lawautomatically apply to existing condo-miniums, except if the new law wouldinvalidate the reserved rights of adeveloper or be an unreasonableimpairment of contract. However, totake advantage of other beneficial pro-visions of the new law requires anassociation to “opt-in” to those provi-sions. That requires the approval of amajority of the owners.

When Chapter 514B was enactedinto law, Chapter 514A (the old law)was not repealed creating a situationwhere associations may be governedby the old law in some cases and bythe new law in others. It will be diffi-cult for Boards and members alike todetermine which law governs. For thisreason alone, “opting-in” to Chapter514B (especially those provisions thatdo not automatically apply) is in theassociation’s best interest. Moreover,we have recently been informed thatsome secondary lenders and insurershave expressed concern over the factthat a condominium project may beoperating under two sets of laws.

Benefits of Opting In to Chapter 514B & Insurance Options By Milton M. Motooka, Esq.

While such lenders and insurers maystill be willing to extend financing andinsurance coverage, respectively, it maycome at a price in the form of higherinterest rates or higher insurance pre-miums. This is another reason why it isa good time to “opt-in” to Chapter514B to eliminate this concern.

Insurance OptionsCondominium Boards of Directors

should seriously consider (A) adoptingan insurance deductible policy and (B)seeking owners’ approval for a propos-al requiring all owners to maintain unitinsurance and if they fail to do so, toauthorize the Board to place suchinsurance and back charge the ownerthe reasonable premium cost of thecoverage.

A. Board Resolution AdoptingInsurance Deductible Policy

The authority for condominiumBoards of Directors to adopt aninsurance deductible policy isfound in Section 514B-143, HawaiiRevised Statutes, sub paragraph

(d) which provides:

"The Board, in the case of a claimfor damage to a unit or the com-mon elements, may:

(1) Pay the deductible amount asa common expense;

(2) After notice and an opportunityfor a hearing, assess thedeductible amount against theowners who caused the dam-age or from whose units thedamage or cause of loss origi-nated; or

(3) Require the unit owners of theunits affected to pay thedeductible amount."

Having an insurancedeductible policy in place is importantto be able to fairly adjust claims madeagainst your association’s master poli-cy. The payment of the insurancedeductible is often the source con-tention between owners and Boards.Adopting an insurance deductible poli-


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Insurance Associates Color Ad

We are a small, geographically isolated, and heavily reg-ulated insurance market. Those issues alone would beenough to keep a lot of insurance companies from comingto do business here. What really hurts us, however, andcauses the most grief for insurance companies and insur-ance buyers alike, is the fact that the entire state is subjectto the catastrophe peril of hurricane. As if that weren't badenough, parts of the state are also subject to earthquake,volcanic action and flood including flood from tsunami.

From an insurance company's perspective, they can'tcollect enough money each year in premiums to pay for thepotential catastrophic loss from a hurricane. The concentra-tion of insured values on the island of Oahu alone runs over$200 billion. With less than $500 million in total propertyinsurance premium in the state, and given the fact that onestrong storm could cause devastating damage to an entireisland, you can see what the companies are up against.While the frequency of hurricanes may be lower in Hawaiithan in Florida or along the gulf coast, the potential severityis enough to keep most companies away.

Several insurance companies DO write property insur-ance in the state, however. These companies manage theirhurricane exposures through a number of ways:

Hawaii has Property Insurance Issues


• Some companies only offer hurricane coverage on con-crete or masonry buildings. This type of constructionperforms better during a hurricane than lighter types ofconstruction.

• Most companies use higher deductibles for hurricane.Prior to Hurricane 'Iniki in 1992, most property insurancepolicies carried a "dollar" deductible of, say, $250, $500or $1000 per loss. The deductible was the samewhether the loss was from a fire, a hurricane, or fromvehicle damage. Today, most property insurance poli-cies carry a separate deductible for hurricane that is usu-ally stated as a percentage of a building's value.Typically, that deductible is 2%. For a building with areplacement cost of $10,000,000, the deductible for ahurricane loss would be $200,000.

• Some companies only insure newer buildings, or willonly insure older buildings that have been retrofitted withhurricane straps and clips. Property owners includingcondo associations are urged to take advantage of thestate’s hurricane retrofit grant program. More informa-tion can be found at the DCCA website athttp://www.hawaii.gov/dcca/areas/ins/consumer/consumer_information/Hurricane_Retrofits_Program

7Hawaiiana congratulates threetop industry professionals:

Hawaiiana Management Company, Ltd.Pacific Park Plaza, Suite 700711 Kapiolani BoulevardHonolulu, Hawaii 96813

Malcolm Ching, AMS, PCAMGeneral Manager, Waikele Community AssociationWinner: Property Manager of the YearPresented by: Building Management HawaiiMalcolm Ching is well-known throughout Oahu for founding TAAG - “Taking Action Against Graffiti.” His groupstarted in 2004 with five volunteers. Now over 40 volunteers throughout Oahu are on-call to paint overmenacing graffiti within hours of its appearance. Inspiring stories about TAAG’s effectiveness in combating gang“tagging” have been featured in local media including KITV, KHON, 97.5 Talk Radio, the Honolulu Advertiserand the Star Bulletin.

Ralph Shumway, ARMResidential Manager, WaipunaWinner: Mike Venable Excellence in Residential Management AwardPresented by: Moiliili Resident Managers Association

Christopher Zarka, ARMResidential Manager, Windward EstatesWinner: Building and Residential Manager of the Year AwardsPresented by: The Institute of Real Estate Management/ AccreditedResidential Managers Committee

Ralph Shumway, ARM, is a 20-year veteran of the residential management field. He is currently ResidentialManager for the “Waipuna,” a 406-unit condominium in Waikiki, 2006 recipient of Building of the Year. He is anoutspoken proponent for “higher education” for residential managers, and past president of the AccreditedResidential Manager’s committee. In addition, he is president of Honolulu’s anti-crime group, the UrbanHonolulu Network. His passion to foster education and professionalism in his field led to his involvement in theMoiliili Resident Managers Association (MRMA) where residential managers meet monthly to network andshare their experience.

Christopher Zarka, ARM, is not only winner of Residential Manager of the Year, but the property that hemanages, Windward Estates, is also the recipient of Building of the Year! He has much to be proud of, butwith a background as a competitive swim coach, “Coach Zarka” refuses to take all the credit personally, andconsiders both wins a team effort. He credits his entire staff, as well as his Hawaiiana Management Team, ledby Management Executive Chuck Ray, for such a winning year!

Hawaiiana is proud that all three award-winnersare managers of Hawaiiana properties

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choose who the trespassers are andthey are based upon the objective crite-ria that you set. What you don’t want todo is discriminate against a person dueto race, color, creed, religion, etc. Youwant to get rid of the people that don’tbelong there and who may cause you oryour property harm. A clear policy con-veyed to all can protect you from liabilitywith regards to these and other issues.It also gives your property credibility andgood standing when dealing with thecourt and in the community.

Lastly, a procedure should beestablished to warn those caught tres-passing so that there is no question intheir mind or yours that they are tres-passing. Just because you catch some-one on your property that shouldn’t bethere doesn’t mean they should bearrested, or even accused of trespass-ing. There are certain conditions underthe law that allows people to trespasswithout penalty. For example, if there isa storm and a passerby seeks refugeunder your enclosed garage to get out

Trespassingcontinued from page 1

of the rain, they are not guilty of tres-passing and cannot be prosecuted.Likewise if someone is running from awild dog or fleeing a criminal and foundon your property, they could not bearrested or prosecuted as trespassers.

To eliminate any doubt that the per-son “knowing entered or remainedunlawfully” persons suspected of tres-passing should be warned that they arein fact trespassing. This should be donein writing and it should be made clearthat they are not to return to the proper-ty for a period of one year from the dateof the warning. The warning shouldinclude the name, personal identifyinginformation and description of theoffender (a photo would be great!), thename and location (the association orbuilding name and address) from whichthey are being trespassed, and the dateand time of the warning. The formshould also be signed by both theaccused trespasser and the personissuing the warning (the security officeror resident manager). Finally, this warn-ing should be issued in the presence ofa police officer who should witness thewarning and be provided with a copy ofthe trespass warning. Don’t forget togive the accused a copy of the warning.

The officer should document this inci-dent with a police report classified as atrespass warning and should provideyou with a police report number. Shouldthis person ever trespass on your prop-erty within the year’s period stated in thewarning, they are subject to arrest bythe police for criminal trespass in the 1stdegree.

Does this mean everyone should betreated this way? No, common senseand policy should always prevail. If thesuspect is violent, refuses to leave orthere are other circumstances that justi-fy their arrest, they should be arrestedwithout the warning. The warningprocess makes the associations posi-tion clear and sends a message notonly to the trespasser but all of theirfriends that trespassing will not be toler-ated. A firm policy can keep undesirablepersons off your property and makes ita safer place to live. It will also go a longway to prevent other types of crimefrom happening and keep your associa-tion’s good name in the community.

About the author: John McCarthy is adetective with the Honolulu PoliceDepartment and may be contacted bye-mail at [email protected].

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9

The 18-unit Kailuan is the first multi-family project(co-op) to have its lease expire (12/31/07) and the resi-dents are still occupying the property. The first wasKahala Garden Apartments, Inc. (16-unit co-op inKahala), but its fee owner, Kamehameha Schools, soldthe property to Kahala Gardens just prior to the leaseexpiration date (7/31/07).

The brewing fight between Kaneohe Ranch and TheKailuan has the usual mixed public reaction. Some seethe public benefit of avoiding the displacement of resi-dents over contractual obligations of the lease. Otherssee it the other way around. However, residents of TheKailuan believe there is one key issue in this case thatgives them the right to buy their fee - the law.

Chapter 514C, Hawaii Revised Statues, providescondo and co-op projects with the right of first refusal tobuy the property if the landowner wants to sell it to athird party. If a landowner is going to sell to a third party,it must offer it to the co-op or condo first. KaneoheRanch has publicly declared it will sell the property to athird-party after The Kailuan’s lease expires.

LEASEHOLD REVERSION:

The Kailuan & a Looming Social Issue By Mike Pang

The residents of The Kailuan say Kaneohe Ranch istrying to circumvent the law, depriving the lessees of theiropportunity to buy the fee. Kaneohe Ranch says it has avariety of reasons why it won’t sell to The Kailuan.Whether or not Kaneohe Ranch breached the law, the spir-it of the law or has done nothing wrong is for a court todecide. It shouldn’t have to come to that, but this is yetanother example of the inability of lessors and lessees toamicably resolve their differences in the marketplace.

Lessors and lessees are generally reasonable peoplethat can understand each other’s positions. However, nat-urally lessors tend see the lease contract as paramountand want its terms adhered to, while lessees are morefocused on their homes and feel the social implications.This disparate view often creates conflict and controversy,but neither lessor or lessee is at fault. They were thrustinto this situation by an ill-conceived system that misap-plied commercial leasehold concepts to a residential con-text – notably market lease rent increase tied to unknownland value fluctuation and reversion (surrender) of theproperty at the end of the lease. Businesses are accus-


10

A digital Closed Circuit Television (CCTV) surveillancesystem is an important tool in fighting and preventing crime.Cameras installed in both public and common areas willdeter property crimes and robberies. The monitoring of theCCTV will also decrease the response time by security per-sonal and the police, who will be alerted in a timelier manner,as well as help to identify the perpetrator(s) with their cap-tured image. A properly-installed video monitoring systemwill not only increase security but also help residents feelsafer, and increase their peace of mind.

Thanks to advances in technology, a video surveillancesystem is more affordable than ever. A Digital VideoRecorder (DVR) can now store data for longer periods of time– at least 60 days – and the video can easily be transferredto CDs or DVDs. The increased resolution and capabilities oftoday’s cameras will also provide clear and precise imagequality indoors and outdoors, in any lighting or weather con-ditions, including complete darkness and the rain, 24 hours aday.

Because of the variety of products available, shoppingfor a complete system can be quite confusing. It is virtuallyimpossible to list and describe all of the cameras and therequirements of the DVR to match each application, but it isimportant to know that every security camera system is onlyas good and reliable as its weakest component.

When choosing to purchase a video surveillance system,it is vital to determine how large of an area needs to bewatched, as well as the situational parameters of each area.The placement of the cameras is of the utmost importance.First and foremost, all entry and exit points should be moni-tored by high resolution cameras of superior quality to clearlyrecord face shots of everyone coming and going. A varietyof cameras should also be placed in high traffic areas, park-ing lots, and even the perimeter of the structure where a 24hour physical presence is impossible to maintain. Camerasshould also be placed in recreational areas, the pool, fitnessroom, or any other area where a video record would be use-ful in case any accident or incident may occur.

“But what happens when the power goes out?” In thecase of power surges or outages, an Uninterruptible PowerSupply (UPS) is a required component of a complete system.Not only will the UPS keep the surveillance system up andrunning, but it will protect the entire system from potentialdamage resulting from the surges.

The Internet revolution has also influenced video surveil-lance by enabling either real time or recorded images to besecurely watched from anywhere through any computer con-nected to the internet. The computer and the Internet havetruly revolutionized video surveillance by removing bound-aries for viewing from anywhere in the world with an Internetconnection. The ability of a company to properly implement

The Advantages of a DigitalVideo Surveilance SystemBy Neil Seichi


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The Kailuancontinued from page 9

tomed to these terms, but not theaverage apartment owner. Weshould remember that key occu-pants of apartments are young peo-ple starting out, people with limitedaffordability and seniors who needthe convenience of apartment living.

Hawaii’s residential leaseholdsystem was born from an acutehousing shortage after WW II. About70,000 apartments and 25,000 sin-gle-family homes were built onleased land. If you wanted to ownproperty, chances were you had tobuy leasehold at some point. Therejust was not enough fee simpleproperty available.

Today, there are about 500condo and co-op projects statewidethat have about 19,000 leaseholdunits. All the leases contain rever-sionary clauses, which require sur-render of the property back to thefee owner when the lease expires.This is a key social dilemma createdby our antiquated residential lease-hold system. It will exist until we arecompletely out of residential lease-hold. A sale of the fee to the lesseescreates probably the best win-winresolution, but unfortunately somedon’t see it that way.

Most fee owners are justlandowners, not developers. As

such, the best options at the end ofthe lease for them are to sell theproperty for redevelopment or, if theimprovements are still viable, lease itagain. Interestingly, both lead rightto the current lessees who would bethe best buyer (typically pay morethan developable value) or the bestcontinuing lessees (pay market rentand take the improvements as is).As such, most fee owners andlessees should be able to reach anagreement before the end of theirleases.

However, while it might appearthat the marketplace can resolvesome of these reversion cases,lessors and lessees have generallyshown an acute inability to work outtheir situations, mostly because oftheir very disparate views and inter-ests.

Kaneohe Ranch versus TheKailuan is just the start of manypotential disputes which will likelyarise around expiring co-op andcondo leasehold interests (about 30projects with 1,500 units in just thenext 10 years). No doubt there couldbe many more situations and prob-lems with reversion in the yearsahead. We’ve all known these rever-sion events are coming, but no oneknows exactly what will happen.While we all wish these can beresolved in the marketplace, historyhas shown it doesn’t usually happenand government will likely be forced

to intervene.

Government has struggled withHawaii’s leasehold system fromalmost its inception - passage of theLand Reform Act in 1969, the firstlegislation aimed at mitigating theadverse social effects of our residen-tial leasehold system. When com-pelled to action, government hastended to side with social con-science and both the U.S. SupremeCourt and the Hawaii SupremeCourt have upheld the legal conceptof mandatory leasehold conversion.Social conscience over the leasecontract.

In 2007 the Legislature passedAct 166, tax exemption incentive forfee owners to sell. It is a “carrot”incentive in an effort to avoid the“stick” of a statewide mandatoryconversion law for condos and co-ops. Although proven quite effectiveat getting us out of residential lease-hold, mandatory fee conversion hasdistasteful effects. Nevertheless, ifthe problem of reversion is notresolved in the marketplace (if wecan’t get out of residential leaseholdourselves), government will likelyhave to intercede, again.

About the author: Michael Pang isthe president and principal broker ofMonarch Properties, Inc. (www.mpi-hi.com), which has specialized in feeconversions for condos and co-opsover the past 15 years.

1313

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Benefits of Opting In to Chapter 514Bcontinued from page 9

cy should reduce the potential for conflict. Please note thatthe law requires an owner to be given notice and the oppor-tunity to be heard if the deductible amount is going to beassessed against the owner.

B. Requiring owners to obtain unit insurance

Section 514B-143(g), HRS provides Boards with theright to seek owners’ approval to require all owners tomaintain unit insurance, and if they fail to do so, toauthorize the Board to place such insurance and backcharge the owner the reasonable premium cost of thecoverage. Approval of a majority of the owners isrequired for such a proposal to pass.

Over the years, condominium associations and individualunit owners have been faced with situations where lossor damage to the common elements and/or to unitshave been caused by owners or their tenants or a condi-tion originating in another unit. This most commonlyinvolves water leaks. Most owners have insurance toprotect themselves from personal liability, cover damageto their personal contents or upgrades, or cover damagethe owners may cause to others that are not covered bythe association’s insurance. Unfortunately, some ownersdecide not to carry any insurance to the detriment of notonly the uninsured unit owner, but to the association and

other owners in the building(s) who are put at risk.

The law now requires owners in a condominium toobtain insurance for themselves upon the vote or writtenconsent of a majority of the owners and if an owner failsto do so, the association or Board may place such insur-ance for the owner and back charge the owner the rea-sonable premium cost for the coverage. The new lawrecognizes the benefits of making certain that all ownersobtain and maintain insurance for their own units notonly for their own protection, but for the protection of theassociation and all owners. Again, the owners couldbe asked to approve such a proposal at the annualmeeting or by way of a mail out ballot.

Because the first quarter of the year is when mostcondominium associations hold their annual meet-ings, the vote on opting-in to Chapter 514B and torequire all owners to obtain unit insurance can bevoted on at the annual meeting without incurring thecost of a separate mail out ballot.

About the Author: Milton Motooka, Esq. is the senior part-ner in the law firm of Motooka Yamamoto & Revere and hasbeen practicing in Community Association law for 35 years.He was one of the founders of the Hawaii Chapter of CAIand the first attorney in Hawaii to be inducted to College ofCommunity Association Lawyers. He can be reached at 532-7214; [email protected]; www.mryhawaii.com.

14

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Digital Video Surveilance Systemcontinued from page 0

ty camera system is only as good and reliable as its weakestcomponent.

About the author: Neil Seichi is the Director of Sales andMarketing for KCN VIDEO SECURITY, a division of KIMCHEE NET COMPUTER SERVICES. Neil can be reached [email protected] or by phone at (808) 389-9036and http://www.kcnvideosecurity.com

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FCC Order Bans “Exclusive” Video Service ContractsBy Rebecca Szucs, Esq.

The Federal CommunicationsCommission (FCC) issued noticeJanuary 4 that it would implement itsproposed ban on the use of exclu-sive contracts for video services incommunity associations and othermulti-family housing developments.The ban would prevent cable com-panies from enforcing exclusivityclauses in video service contractseffective March 8. Several industrygroups have challenged the FCC’sauthority to implement such a banand the challenge may delay imple-mentation of the ruling into summer.

The order is the result of arequest for comments solicited bythe FCC in 2007. CAI submittedcomments opposing this action andargued that community associationsare democratically governed organi-zations, capable of making their ownjudgments about the benefits provid-ed by exclusive agreements (such aslower rates and commitments forservice upgrades).

Under the order, certain videoservice providers cannot enforceexclusivity provisions found in con-tracts with “Multiple Dwelling Units”(MDUs). MDUs include homeowner

associations and communities ofsingle family homes. The orderapplies to both existing and futurecontracts. The prohibition onenforcing exclusivity agreementsapplies to the provision of video pro-gramming services only, and is notcontingent on whether the servicesare provided alone or as part of abundled contract with other ser-vices.

CAI is currently examining thelegal basis of the ruling and, in con-sultation with other affected organi-zations, will analyze options. Formore information, you can reviewthe order on CAI’s Heads-Up page -http://www.caionline.org/govt/news/index.cfm.

In the meantime, Associationswith contracts that contain exclusiveservice provisions may want toreview the contract provisions con-tained in their agreement and seekadvice of counsel on how the order,if implemented, would affect theircontractual obligations. The orderonly affects the enforceability ofexclusivity clauses and does notnecessarily void the service contractas a whole. As contract provisions

vary, qualified counsel can provide alegally reliable assessment of yourrights and obligations. After assess-ing the impact, if any, to existingcontracts, Association boards maywant to begin planning anannouncement to release to owners.Associations should also proceedwith extreme caution when negotiat-ing agreements with video providers.If an association is approached by acable or satellite television providerto enter into an agreement to pro-vide bulk service video program-ming, the association should do athorough review of the FCC rulesand consult with legal counsel toevaluate whether the proposedarrangement is proper under existingFCC rules or may be invalidated inthe near future based on the FCC’sexpress intent to adopt rules to pro-hibit exclusive marketing and bulkbilling arrangements.

About the author: Rebecca Suzcs,Esq. is with the law firm of MotookaYamamoto & Revere, specializin incondominium association represen-tation, and is the Co-Chair of theCAI Hawaii’s Programs committee.She can be reached at 532-7900,email [email protected].

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spotting possible crimes, reportinginfrastructure problems, and actingas a conduit for neighborhood com-plaints and concerns. Her effortscleaned up many areas alongKapiolani Park that had been takenover by illegal camping and perma-nent vehicle storage.

Bruse Eckmann, resident man-ager of Mo’ili’ili Gardens, saw aneighborhood need and jumped intoaction. Initially on his own, and nowallying himself with the TAG (TotallyAgainst Graffiti) team, he quietlymonitors graffiti in his area,approaches neighboring propertiesfor cooperation and permission, andtries to sustain and support a ‘rapidresponse’ to eradicate graffiti withintwenty-four hours of discovery.Along with others, he is developingthis proven strategy into a modelthat can be used by fellow man-

agers in the seventy-five memberMoiliili Resident ManagersAssociation. Because of this type ofvision and dedication, the Mo’ili’iliand McCully area is on track tobecoming a graffiti-free neighbor-hood accomplished by techniqueswhich many neighborhoods through-out Honolulu and O’ahu are emulat-ing.

These are but three of the manyproperty management professionalswho are utilizing their experience andknowledge to make a difference inestablished programs. There are alsomany neighborhoods not receivingattention and many needs that arebeing ignored. Who is going to stepup and take on these Goliath prob-lems? Crime-inflicted areas cry forresident vigilance to suppress thedownward trend. Graffiti, illegaldumping (Bulky Item Pickup piles),and scattered trash are in great needfor eradication by neighbors.Infrastructure problems (pedestrian

hazards, poor lighting, crosswalkissues, potholes) need to be report-ed so the correct agencies can fixthem. Businesses need to be heldaccountable if they pose a negativeeffect on a residential neighborhood.Properties abandoned or in disrepairneed to be fixed up. There is a myri-ad of complex, difficult issues to betackled. Each one of these issueswill need a special qualified personto take charge. Consider that youmay be the best choice for the job.

About the Author: For over adecade, Mr. Shumway has beeninvolved in crime deterrence pro-grams, community improvement pro-jects, and legislation relating toneighborhood issues. He is currentlythe manager of the Waipuna, IREMHawaii’s Large High Rise Building ofthe Year. Please contact him [email protected] to dis-cuss your ideas on how to createpositive change in our communities.

19

• Some companies exclude hurricane on their homeown-ers policies and send their customers to specialized,heavily reinsured companies such as Zephyr InsuranceCompany or ICAT Specialty Insurance Company to buyhurricane coverage.

• Most companies restrict coverage on property that islocated close to the ocean. Not only is property closer tothe ocean more susceptible to hurricane damage, ocean-front property is also susceptible to concurrent damagefrom wind and wind-driven rain as well as floodingcaused by storm surge during a hurricane. Concurrentdamage from multiple perils (flood and hurricane) can bea nightmare at claims time, as witnessed by propertyowners after hurricanes Katrina and Rita.

State Farm's recent decision to stop writing insurance oncondominium associations located within 1000 feet of thewater falls in this last category. While State Farm is one ofthe largest insurance companies in the country, even theyhave to manage their catastrophe exposures. You have togive State Farm credit: they have given their policyholders upto two years' notice that they were taking this action. Thishas given their condo customers time to go out and getquotes for replacement coverage, or to give condo boardstime to budget for "post-State Farm" policies. The goodnews is that for high-rise concrete condos previously insuredby State Farm, the cost of replacement coverage with newinsurance companies is comparable to their old State Farmcoverage. The not-so-good news is that for condos that areof wood frame construction, the cost to replace the StateFarm coverage is going to run up to three to four times theexpiring State Farm price.

While we are fortunate that Hawaii does not suffer thesame hurricane frequency as Florida, we do have the poten-tial for severity. That severity is what helps to make propertyinsurance a challenge for companies, agents, and propertyowners alike.

Property Insurance Issuescontinued from page 6

About the author: João Santos works with InsuranceAssociates, an independent agency in Honolulu. Theagency specializes in meeting the unique insurance needsof condominium associations. He can be reached at 526-9260; email [email protected].

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A question I received recently from an owner whoseBoard of Directors raised the maintenance fee was “sincewhen does the Board raise the fees; I want to talk tothem about lowering the maintenance fees.” Another callreceived was “I want to contest the increase in mainte-nance fees.”

If you work in the property management business orhave served on a Board of Directors, you should have adecent working knowledge of condominium governance.For those owners who have not served on a Board ofDirectors or who have been relatively dormant and unin-volved, these comments are not unusual.

The governing documents of each Association out-lines the authority vested in the Board of Directors.Some of the more common powers the Boards retain arethe ability to hire employees, the ability to hire contrac-tors and commit the Association to pay the contractorshired, the power to maintain the common elements, thepower to invest monies in accordance with the statestatutes, the power to amend the House Rules, and thepower to assess and increase assessments as needed.The Board normally has the power to set policy and runthe business of the property. These are just a few of the

Since When … By Lillian McCarthy, AMS®, PCAM®

powers provided to the Board of Directors. Ownersshould read the governing documents if they wish toknow the powers of your Board of Directors.

For owners to expect maintenance fees to decreaseis unreasonable. If one considers the rising businesscosts coupled with labor costs, the need for increasedmaintenance as properties age, the possibility of provid-ing services to the aging population, the need to replaceoutdated equipment, plumbing lines and electrical lines,the requirement to set aside money for capital improve-ments, (elevators do not last forever) etc., it is difficult tounderstand how maintenance fees can be decreased.Landscaping will need to be renewed. Trees grow andwill need to be trimmed while others will need to beremoved. Thinking of all of the needs of a property canbe a daunting task.

Owners and residents can help minimize increases bymaintaining their plumbing pipes, shut off valves, washerhoses, heaters, etc. By properly maintaining what youown, your contribution may help reduce insurance claimsand help with keeping premiums low. If your propertyhas asphalt roads or asphalt parking lots, keeping yourvehicle properly maintained may prevent the asphalt fromprematurely deteriorating. Oil leaks are very detrimental


21

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to asphalt and will cause the asphalt to deteriorate. Ifyou see debris on the property, you do not have to waitfor the employees to pick it up; you are welcome to assistand this may help keep labor costs to a minimum.Dispose of your bulky items; do not leave them on theproperty or find a hiding spot for them. If you leave itemsaround the property, someone else will need to tend tothem. When your Association is required to dispose ofyour bulky item, someone pays for the disposal. The endresult is increased maintenance fees.

Recycle. Recycling aluminum, paper and bottles willreduce refuse and help keep refuse costs to a minimum.You will also be helping the environment.

Since when does the Board have the power….Suffice it to say, the owner did not “talk” to the Boardabout lowering maintenance fees. The owner wasadvised that the Board has the power to assess. If theBoard had to receive permission to raise the maintenancefees, it would be difficult at best to run and maintain anyproperty.

Owners who want to “control” the increases and thinkit would be great to never ever raise the fees, should con-sider single family dwelling ownership in a non-associa-tion neighborhood.

Since membership is mandatory in a community liv-ing environment, owners who choose community livingshould expect to share in the common expenses.Increases in the maintenance fees or dues should beexpected.

Since when does the Board have the power….Owners who want to understand the role of the Board ofDirectors and the powers vested in the Board of Directorsshould read their governing documents. Reading thegoverning documents should prevent future shock ofactions taken by the Board.

About the author: Lillian McCarthy, AMS®, PCAM® is amanagement executive with Hawaiiana Management.Lillian may be reached via e-mail at [email protected].

continued from page 20

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Q. Senator Espero, you represent a district that has a lotof community associations. Any idea what percentage ofyour constituency lives in homeowner controlled associa-tions?

A. It’s a very substantial percentage. As you know, we havetwo of the largest developments in ‘Ewa by Gentry and OceanPointe. Within these, we have both single-family homes andhomes built under the condominium regime. ‘Ewa by Gentryhas over 6,000 units and, I believe, Ocean Pointe has around2,000. West Loch Estates and West Loch Fairways are also inmy district, which account for another 1,200 to 1,500 units.

Q. So, now that 514B has been implemented, has therebeen much negative feedback?

A. Actually, no, I haven’t heard any. Since the last session, Idon’t recall anyone calling about that. This is a good thing.

Q. When 514B was first enacted, there were some prob-lems and omissions. This was a very large legislative actthat took years of work to put together. After the enact-ment, other legislation was necessitated to fix the prob-lems. Do you foresee any more legislation coming up per-

CAI Q and AA candid interview with State Senator Will EsperoDistrict 20: ‘Ewa Beach, Ocean Point, West Loch, Lower WaipahuChair, Public Safety CommitteeVice Chair, Economic Development and Taxation CommitteeBy The CAI Intrepid Reporter

taining to 514B?

A. I’ve spoken to some of my colleagues and it hasn’t comeup onto anybody’s radar. I have talked with some people fromHICO (Hawaii Independent Condominium and Co-operatives).They have shared with me some items that may need tweak-ing but there haven’t been any significant items to come upyet.

Q. What other legislation do you anticipate in 2008 thatwill directly affect homeowner controlled associations?

A. I will be looking at the condo dispute resolution pilot pro-gram that we have. I need to touch base with the DCCA to seehow that is going because that just started a couple of yearsago. There are two measures pending: Senate Bill 922, andSenate Bill 1809 (which I introduced last year). They did notget hearings but I am hoping they will this time around. SB922prevents a board of directors from bypassing the condomini-um dispute resolution process. The idea is to use it and try tominimize legal costs and prolonged battles. SB1809 has to dowith owners petitioning for a special meeting. It would man-date that the special meeting would be held within 60 days ofthe petition being presented to the board. Right now there isn’ta time limit, so this would make the meeting happen within areasonable period.

One more item that is coming up: the Auditor is releasinga report, maybe this month, regarding the establishment of acondominium commission. We currently have a real estatecommission in which many of the condominium issues fallwithin. The idea of a condominium commission being createdwould give condo and homeowner associations their own gov-

23

ernment entity. We will be looking at her report. This is a bigdeal. With over one hundred thousand condominium units inour state, I think considering this is justified.

Q. What other areas, beyond condo issues, do you feelneed legislative attention in 2008?

A. We are going to have to look at affordable housing and theeconomy. I think those two issues will rise above the rest. Ofcourse, there will be many issues and worthy bills out there butthe cost of living here and economic security for our residentsare always very important. Education will be addressed as well.I was talking with SenatorSakamoto recently about someearly education initiatives. Our chil-dren need to be better prepared toenter kindergarten.

Q. As you know, the City andCounty of Honolulu’s mandatedlease to fee conversion law wasrepealed after MayorHanneman’s election. Is it beyondthe State’s jurisdiction to enactsome kind of legislation thatcould help existing lease holdcondos to purchase the land theysit on?

A. As state legislators, we candelve into any issue. The law yourefer to was unique for Oahu. Youhave to decide what kind of helpwe are talking about. This is a veryemotional issue. There hasn’t beena large groundswell from residentsor homeowners on this issue in thelegislature. As a lawmaker, no onehas, that I can recall, sent letters orasked for meetings about this. Weknow that there are homeownersbeing affected but I don’t know howlarge the numbers are. At this stage,I’m not sure that the numbers aresignificant enough for the legislatureto get involved.

Q. What legislation are you intro-ducing this year?

A. I am the Chairman of the PublicSafety Committee and am lookingnow at a measure to return all ofour women prisoners from theMainland. We have just over 2,000prisoners on the Mainland, becauseof lack of prison space here, butonly 175 of them are women. That’sa small enough figure to accommo-date bringing them back. I am look-ing at a measure that would removethe statute of limitations on rape.Because of today’s technology, wehave the ability go back, look at

cold cases, and try to find the perpetrators. I have a measurethat would try any 15 year old or older as an adult for certaincrimes, such as first degree murder. Currently, all minors aretried in family court, which is closed. I think when a 15/16 yearold has committed a murder, that type of a case should bemade public so we know what led that individual to perpetratethe crime. Also, the sentencing for minors is much less than inadult court. A 16 year old could be out in just a few years aftercommitting a murder. One other public safety measure dealswith rehabilitation and reentry of our prisoners. We are nowfocusing on this. Our prison population is growing and we need

to stop the revolving door. We needa different mindset and attitude inour prison system. This prisonreform will put an emphasis on giv-ing the prisoners the opportunity toconfront the problems that led themto prison, get their GED, receive drugtreatment, have vocational training,and go through anger managementcounseling. We have limited sourcesbut there are opportunities for us tohelp people pick themselves up tobecome productive members of oursociety.

Two other, different bills I amintroducing this year concern ban-ning the sale of incandescent lightbulbs (my “green” bill for this year),and creating a task force for anAlzheimer’s research center forHawaii.

Q. Can the State do anything tohelp ease the financial and avail-ability insurance crisis homeownercommunities are facing?

A. The State probably could dosomething but I can’t tell you specifi-cally what that would be. It may beworthy to put together a task forcewith limits on the investigation time.Perhaps make the report due in sixmonths after the formation of theforce. My guess is that there are a lotof people thinking about this andhave ideas already. You could haveindustry experts involved, homeown-ers, and associations. It is not yet ata crisis but it is becoming a problembecause of less options andincreased costs.

Q. My last question: many of yourlegislative colleagues live in con-dos or community associations.Do you?

A. Yes! I live in ‘Ewa by Gentry. Iused to serve on a board. And myparents also own a condo inHonolulu.

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Permit No. 59

CAI SEMINARS 2008Date Topic, Seminar Coordinator

March 27, Thurs. Dealing with Hazards-Asbestos/MoldJapanese Cultural Center(Will be repeated in Kona in April; date and location to be determined)

April 26, Sat. ABCsJapanese Cultural Center

June 28, Sat. Disaster Preparedness & Health IssuesJapanese Cultural Center

July 24, Thurs. Legislative UpdateHale Koa Hotel(To be repeated in Maui; date and location to be determined)

August 21, Thurs. Covenants EnforcementHale Koa Hotel

September 25, Thurs. Top Traits of Boards & ManagersHale Koa Hotel

October 25, Sat. Defending & Winning Suits Against the Association or BoardsJapanese Cultural Center

Seminars are partly funded by funds from the Condominium EducationFund, Real Estate Commission, Professional and Vocational LicensingDivision, Department of Commerce and Consumer Affairs, State ofHawaii for condominium apartment owners whose associations are reg-istered with the Real Estate Commission.

2008 PMDP CoursesMarch 6-8 M-100Thursday-Saturday

March 27-28 M-201Thursday-Friday

April 10-11 M-206Thursday-Friday

June 5-6 M-204Thursday-Friday

July 31-Aug 1 CASEThursday-Friday

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