Q. I own a condominium that I rent out. Recently, I was sent a letter stating that I needed to provide access to the inside of the unit to condominium management so they can inspect for something called “high risk components.” My tenant was annoyed because the inspection was scheduled for an inconvenient time. I thought condominium associations were concerned with the outside of the units and not the interior. What is this?
A. Condominiums are formed through the paperwork the developer filed prior to construction. Condominiums can be high rise buildings, townhouses or even single family homes. What makes a condominium in our State are two laws, HRS Chapter 514A for condos built prior to July 1, 2006 or HRS Chapter 514B for condos built after that time. Chapter 514B was written in part to bring current numerous things that had changed since Chapter 514A was written some 40 years prior. Associations that currently fall under Chapter 514A may adopt, by a majority vote of their owners, to “opt in” to Chapter 514B, letting it become their main governing body of law. Some sections of Chapter 514B automatically apply regardless.
One of the changes in the new law (514B-138) allows a Board of Directors to adopt a list of high risk components (after notice to the owners with opportunity to comment). Many aging condominiums are having a hard time keeping insurance especially due to water leakage problems. The high risk components lists that I have seen include such items as washer hoses, shut off valves, water heaters and other assorted plumbing, smoke alarm requirements and other things along those lines. Boards may require inspection and repair/replacement if the items are missing or not working properly. Replacement of certain items in a specified interval whether or not the item is defective can also be adopted as a rule. This new part of the law was created for the protection of the Association as a whole.
Another provision (514B-143g) allows the Board (with a vote of the majority of members) to require that each owner have homeowners insurance. If an owner does not provide proof of insurance, insurance may be purchased for them and the cost assessed to the unit owner. This is especially important with the rising deductibles that Associations are faced with. Recently one building where I manage rentals had its deductible raised to $20,000! Can you imagine if your unit caused over $20,000 worth of damage (which is easy with a water leak or smoke damage). If you did not have homeowners insurance, that money may come out of your pocket.
Associations may now try to collect money directly from tenants when a tenant violates a rule. The owner is still ultimately responsible, but previously the Association could only assess an owner. The new law makes it easier for an Association to foreclose on delinquent owners. It allows the shut-off of certain utilities of delinquent owner/occupants that are paid through common expenses. It allows the Association to collect the rent from tenants living in units whose owner is delinquent. Of course, all of these items have guidelines to follow.
Board members are just volunteer owners who spend some of their free time helping the community in which they live. Some larger management companies occasionally give seminars on these laws. You can always call the company that manages your Association and inquire.