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For those of you attending the 2017 CAI National Conference in Las Vegas this week, please be sure to attend the session “A Service Dog by Any Other Name” on Friday, May 5, 2017 from 9:30-10:20 a.m.  The session is sure to be interesting.  Custom K9 Services will be on hand to provide a demonstration involving an assistance animal.  Custom K9 Services supplies dogs to military and police departments across the U.S. and Canada, and has provided dog training seminars in 42 states and seven countries.  Richard Ekimoto will also be on hand to answer legal questions about the fair housing laws and assistance animals.

Fellows of the College of Community Association Lawyers are attorneys practicing community association law that have distinguished themselves through contributions to the evolution or practice of community association law. Admission requirements include: (1) 7 or more years of practice with a concentration in community association law; (2) substantial writing in the area of community association law; (3) significant teaching on community association law; and (4) community service or legislative activity. The College plans and presents what many consider the best educational community association program in the country.  Hundreds of attorneys, managers, insurance professionals and others attend the CAI Law Seminar each year.

As you can see, we’ve updated the look of our site.  We hope that you’ll find it easier to navigate and find materials.  We are in the process of uploading information that might be of interest to our clients.  Stay tuned for more information.

House Bill 34 would amend both the Residential Cooperative Statute and the Hawaii Condominium Act to permit condominiums and coops to prohibit smoking in the common areas and units by rule.  The bill was heard on January 30, 2013, but has been scheduled for further hearing on February 4, 2013 at 2:00 P.M. in House Conference Room 325.

The Senate companion bill, Senate Bill 945 was heard by the Senate Health Committee on January 30, 2013.  The Senate Health Committee passed the bill out of committee with some amendments.  Senate Bill 945 will be referred to the Senate Consumer Protection Committee.

Currently, there is some question whether condominiums can prohibit smoking in units by rule or whether a bylaw amendment would be necessary.

A few days ago, the Federal District Court for the District of Hawaii ruled that a management company is not a debt collector under the Fair Debt Collection Practices Act (“FDCPA”).  Although the legal principles in the decision are not particularly new, it does provide an opportunity to discuss the FDCPA and management companies.

The FDCPA requires debt collectors to meet certain requirements in the collection of a debt, including a requirement to provide the debtor with a very specific notice that you are debt collector and the debtor has certain rights.  Failure to follow the requirements can result in a significant award in favor of the debtor.  The primary target of the FDCPA was collection agencies.  However, the FDCPA was written broadly so that it could apply to management companies and even attorneys under certain circumstances.

Management companies have two possible arguments that they are not a debt collector under the FDCPA.   The FDCPA contains an exemption for:

any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.  [Emphasis added.]

The first exception (incidental to a bona fide fiduciary obligation) sometimes applies because the management company owes a fiduciary duty to the association.  See, Hawaii Revised Statutes §514B-132(c)Therefore, if the collection of the association’s debts is not central to the fiduciary relationship, a management company would not be a debt collector under the first exemption.  In Beckman v. Maalaea Surf Association of Apartment Owners, the Hawaii Federal District Court recognized that the management company’s duties included:  (1) maintaining a record of all income and expenses related to the Property; (2) preparing an annual budget; (3) maintaining the common elements of the Property; (4) negotiating various utility related services contracts; and (5) collecting all monthly and other assessments and fees that are due the Association with respect to the Property.  The Court ruled that all these duties meant that the the collection of assessments and fees is “incidental to” [the management company’s] overall fiduciary obligation to manage the Property.

The third exception (a debt which was not in default at the time it was obtained) sometimes applies because often the unit owner may not be in default at the time the management company is hired by the association.  In Turner v. Hawaii First Inc., the Hawaii Federal District Court ruled that the management company was not a debt collector because the account was not in default at the time the management company was hired by the Association to collect the Association’s debts.