Can the Real Estate Commission Step in to Resolve Disputes Between Owners and the Association, Owners and the Board, Owners and the Managing Agent, or Disputes Between Owners?

The short answer is no. Condominium law is based upon principles of self-governance; owner-enforcement and majority rule; mandatory mediation; voluntary binding arbitration; and limited government intervention restricted to violations specified in Part VI of HRS Chapter 514B. The Regulated Industries Complaints Office (RICO) has the authority, on behalf of the Commission, to receive and investigate a narrow range of complaints related to document requests, or initiate legal action. RICO’s telephone number is (808) 586-2653.

Mediation, arbitration, and litigation are some of the more noted self-governance tools available for resolving disputes. The condominium law favors the use of these self-governance tools. The court will consider the condominium apartment owner’s use of these tools when awarding the expense of any court action and attorney’s fees, in accordance with HRS § 514B-157 and HRS § 514B-161, regarding mandatory mediation.

A dispute relates to the interpretation, application or enforcement of the association’s declaration, bylaws, or house rules, may be submitted to mandatory mediation at the request of any party pursuant to HRS § 514B-161. The dispute may also be submitted to voluntary arbitration at the request of any party pursuant to HRS § 514B-162. Mandatory mediation is currently subsidized by the Commission and voluntary binding arbitration will become subsidized in January of 2019.

Mediation is not mandatory for threatened property damage, or health or safety of unit others or any other person; assessments (see Act 196 SLH 2018 for exceptions), personal injury claims, or insurance matters. (HRS § 514B-161(c))

Should an owner prevail in any derivative action against an association, its officers, directors, or its board to enforce any provision of the declaration, bylaws, house rule, or the condominium law (HRS Chapter 514B) then the owner shall be awarded the expense of suit and attorney’s fees; provided the owner has first demanded that the board pursue such enforcement, and allow the board a reasonable amount of time to pursue such enforcement, unless the demand would have been fruitless. (HRS § 514B-157)

Where an owner does not prevail in any court action, that owner shall be responsible for the association’s costs incurred and attorney’s fees. However, if the owner either files the action for enforcement in small claims court or prior to filing a court action in a higher court, the owner submits the claim to mediation or to arbitration and made a good faith effort to resolve the disputes, the owner is not responsible to pay the association’s attorney’s fees and expenses of litigation. (HRS § 514B-157)

For condominium mediation and arbitration services, please click here.

Revised 8/28/18