Kuau Bayview Policies & Procedures

WHEREAS, the Board of Directors of Kuau Bayview HOA considers it in the best interests of the Association and the members as a whole,
NOW, THEREFORE, the Directors have undertaken to develop the following Policies and Procedures to provide clear and definitive guidance to homeowners and future Boards. This page is a draft work-in-progress that will be developed over time and as the need arises. It may be updated from time to time to reflect the latest policy as our methods, technology, or the law changes.

These Policies & Procedures will serve to guide the Board in exercising its responsibilities to owners in a consistent, just, and lawful manner, while at the same time assisting owners in exercising their rights in an informed and responsible way.

Kuau Bayview at Paia is a Planned Community Association and as such is subject primarily to Chapter 421J of the Hawaii Revised Statutes. Other chapters of the HRS for Condominiums (514B), and Hawaii Non-profit Corporations (414D) also have some bearing, and expand or elucidate the pertinent laws; therefore, the Board consults all these sources in addition to the KB governing documents in establishing appropriate Policies and Procedures for our Association.

• 1. Policy Regarding Enforcement of the DCCRs

  In general the Board has adopted a policy of not acting on DCCR violations unless someone who is adversely affected by the violation requests Board assistance. At no time will the Board act on a complaint that is filed by an owner solely in order to harass someone. In some cases, such as when the violation puts the public at risk, then the Board will act in the interest of public safety. Over the years as the neighborhood has evolved, it has become clear that some of the DCCRs are simply not enforceable. One example is the parking rules. Some vehicles are too large to fit in our garages. Families with teenagers often have more vehicles than will fit in the garage or in the driveway. Parking on the street is often unavoidable so we just have to learn to live with it.

  For County Ordinance violations, in some cases the Board may defer to the County for enforcement unless a delay will pose a risk to public safety. When a property is being sold wherein a violation exists which adversely affects an adjacent lot, the Board will hold the sale contingent upon the violation being remedied prior to closing. In cases that affect HOA common areas, easements, walkways, or boundaries, the Board must require resolution to preserve Association assets and rights. Involving the County is a last resort as it is not a very neighborly approach to problem resolution, and the fines are steep. When illegal rental situations exist, the Board will always ask the complainant to call the County. The volunteer Board members cannot be expected to monitor rentals. In general, the Board is of the opinion that owners need to make some attempt to solve their own problems before coming to the Board. If appropriate, we will do what we can to mediate and assist in finding a resolution when neighbors have reached an impasse; however, we ask owners to please understand that, when we step in, we have been asked by other owners for help and are not meddling in their life. We are in all cases trying to look after the best interests of all parties in seeking the best possible resolution. Unless you are willing to volunteer your services, please do not criticize our sincere efforts to help.

• 2. Policy Regarding Board Actions Requested by Owners or Others

  The Board has determined through past experience that it is in the best interests of the HOA that unusual requests, complaints, and demands from homeowners (or anyone) regarding HOA business must be through proper channels and not directed at one individual Board member. Individual Directors or Officers cannot and must not speak unilaterally for the Board or the HOA. This means that any Board member who is contacted by a homeowner (or anyone) regarding HOA business should decline comment and inform the person that they must submit their unusual request, complaint, demand, etc in writing to the official address of the Association with "ATTN: Board of Directors" on the envelope. This envelope will then be forwarded to the Secretary for presentation to the Board. The Board makes decisions and acts as a whole on all matters after thoroughly researching, discussing, and coming to a consensus amongst the Directors. People with mal intent will always try to divide and conquer. These protocols prevent that.

• 3. Hawaii State Law Regarding Access to the Membership List

  [Planned Communities §421J-8] Membership list. The association shall use good faith efforts to keep an accurate and current list of the names and addresses of association members. If the list is not provided directly to members, the association shall develop a reasonable procedure by which owners may solicit votes or proxies or provide information to other owners with respect to association matters. The board may require members to furnish the association with an affidavit stating that the use of the list is requested in good faith for the protection of the association, its members, or both. [L 1997, c 132, pt of §1]

  [§514A] The Board of Directors must keep an accurate, current list of all association members and their addresses. Association members can obtain the list at reasonable cost by submitting an affidavit stating that the owner intends to use the list for soliciting votes or proxies or disseminating association information to members and not for any other purpose. [ Section 514-83.3 ]

  The Membership List shall comprise only the names and mailing addresses of members. Members are NOT entitled to phone numbers or the Email List. Individual phone numbers or email addresses are NEVER given to anyone without the explicit permission of the owner.

  Owners who have violated previous affidavits, or who have distributed hate mail to owners in the past, have compromised their right to this list. The Board has a duty to enforce this policy, under the authority established by a majority vote of the membership at the 2013 Annual General Meeting.

  Procedures Enabling a Member to Obtain the Kuau Bayview HOA Membership List

  1. All requests shall be sent to the address of record of the Association by the owner's authorized method of correspondence, such as first class mail or email.
  2. The Contact Page of the KB website shall display the current Association address of record to be used for the request.
  3. The request from the member must be in good faith and be in the form of a duly executed and notarized affidavit containing the following statement and signature:
     This Membership List...
     • Shall be used on a one-time-basis for one mailing only for the specific purpose stated below.
     • Shall be used by myself, personally, for the purpose of soliciting votes or proxies for one specific election, or providing information to other members with respect to Association matters at one point in time, and
     • Shall not be used for any other purpose.
     • Shall not be furnished to any other party for any reason.
     I hereby agree not to use or distribute any information or documents obtained from the inspection or copying of any Association records for any reason or purpose other than as stated above. I agree to indemnify, defend, and hold the Ku'au Bayview at Paia Homeowners' Association, its Board members, officers, agents, managing agent, volunteers, and their respective successors, heirs, and assigns, harmless for any claim made or damage sustained by any person arising from, related to, or concerning my inspection, use, or receipt of copies of Association records. I further consent and agree that all inspection, copying, and administrative charges incurred pursuant to this request, as outlined above, will be paid in advance as directed by the Board.
     Owner Signature________________________________________   Date__________________
  4. Upon receipt of a written request accompanied by the aforementioned affidavit, after the Board has determined that the request complies with the stipulations of the Code of Conduct, the Association shall provide the records promptly, if possible, or in a reasonable amount of time, but no later than five (5) business days after receipt of the request, or payment of costs, whichever is later.
  5. Association records may be maintained in paper format or an electronic format. For records maintained in electronic format, such as the Membership List, the Association shall not be required to transfer such records to paper format unless the owner agrees to pay the cost of producing such paper copies.
  6. Copies of requested documents shall be provided to any member upon the member's request if the member pays in advance a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request. The Board has determined that a reasonable fee would be $.50 per page to be paid in advance of receiving the documents.
  7. The requested records shall be sent by first class mail or by email, according to the member's authorized method of correspondence.
  8. The Board reserves the right, at its sole discretion, to waive any of the above requirements or fees on a case-by-case basis as it sees fit.
  9. Board's Discretionary Rights. At the discretion of the Board, certain records may be inspected only in the presence of a Board member. No records may be removed from the Association's principal office without the express written consent of the Board. If a request is made to inspect records, the Association may photocopy and provide the requested records to the member in lieu of the member's inspection of the records, if consented to and paid for in advance by the member.
  10. Damages. The Association reserves the right to pursue any individual for damages or injunctive relief, or both, including reasonable attorneys' fees, for abuse of these rights, including, but not limited to, use of any records for a prohibited purpose.

• 4. Policy Regarding Delinquent Accounts

  Amounts Payable to the Association

  Amounts payable to the Association include regular assessments, special assessments, specific assessments, reserve assessments, transfer fees, fines duly assessed, late fees, legal fees, and other costs associated with collection of funds on behalf of the Association.

  Priority of Payment Allocations

  All owner payments shall be applied to delinquent accounts in the following order: legal fees, late fees, costs of collection/foreclosure, violation fines, special assessments, regular assessments. This has been Board policy from the beginning of Kuau Bayview and is typically the order in which most Associations in Hawaii and many other states allocate payments.

  Fees

  The Board has determined that it is in the best interests of the HOA to charge, in addition to all out-of-pocket collection costs, the following fees on any overdue amount owing the Association:

  1. (1) a late fee of $15 per month effective on the first of each month for regular assessments, and effective 30 days from the due date for special assessments, and
  2. (2) $50 for each demand letter necessitated in the course of collecting amounts owed. Under former management companies, the fee for demand letters was $104.17. These letters can be very time-consuming as each edit must be voted on by all the Board members.

  Resident Owners

  If the resident owner has not corrected a delinquency within 45 days of the due date, the Board may choose to use Small Claims court to obtain a court order in order to collect amounts owed, or the account may be handed over to ADAC for collection. Association Dues Assurance Corporation (ADAC), which is licensed in Hawaii under The Rickel Law Firm, was specifically created to handle Condominium and Homeowners' Association delinquent collections. ADAC adds attorney fees directly to the delinquent balance as permitted by statute on top of what is owed to the Association. In this way the Association will receive 100% of what is due, and any legal fees & costs must be paid by the delinquent owner directly to ADAC. In the past, lawyers billed the Association, so they got paid immediately and the Association was left to collect the debt, often unsuccessfully, from the owner. That is how we ended up with Accounts Receivable of $14,000+ under Valley Isle Property Management. Once an account has been turned over to ADAC, the involvement of the Board with the owner ceases. It is in the homeowners' best interests to show their appreciation for the low fees by paying on time, thereby avoiding intervention by a collection agency such as ADAC.

  The prohibitions in the Federal Fair Debt Collection Practices Act do not apply to the person or entity owed the debt, ie. the 'creditor', which in this case is the Association.

  Rental Properties

  If a delinquent lot owner uses the property as a rental, pursuant to HRS 421-J 10.6 (a), the Board may collect from the tenants' rent any amounts owed to the Association. Under section (c) of this law, tenants have complete immunity from any retaliatory actions on the part of the landlord against the tenant for payments made to the HOA under this section.

  Note: If the tenant does receive written demand to pay the HOA his rent money directly, the tenant who does so is provided immunity from eviction by the landlord; however, the converse is also true. If the tenant receives written demand from the HOA and continues to pay the rent to the landlord, the tenant has violated the law and can be evicted by the HOA. In other words, the tenant is protected by the law if he pays the HOA, but not if he continues to pay the landlord in contravention of the HOA demand letter.

  Check Memo Instructions

  Is a note written on a check memo line legally binding if cashed?

  Answer: No, it is not legally binding. One party may not unilaterally change the amount owed or terms of payment by doing this. There is a common myth that the memo line on a check has legal force - it doesn't. It's just for informational purposes. While it helps to identify the purpose of a check, it does not bind the recipient. Think about it, if it were that easy to alter the terms of a payment, everyone would do it. For example, a person could write "payment in full" for a bill and be done with it. Additionally, the fact is that not every check can be that closely monitored for such notations; it would tie up commerce. Bottom line, a recipient of a check can cash it without being bound by whatever may have been written in on the memo line.

  Some disreputable people think that writing "Paid in Full" on a check that is only a partial payment fully discharges the debt; however, one of the legal requirements for a valid accord and satisfaction is mutual consent, ie. it must be clear that both parties understand and accept the terms of the new performance. Be it known that the HOA will ignore anything written in the memo field of a check and apply the payment to the outstanding balance.

• 5. Hawaii State Law Regarding Action Without Meeting

  §414D-144: Action without meeting.

  1. (a) Unless the articles or bylaws provide otherwise, action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if the action is taken by all members of the Board. The action must be evidenced by one or more written consents describing the action taken, signed by each director, and included in the minutes filed with the corporate records reflecting the action taken.
  2. (b) Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date.
  3. (c) A consent signed under this section has the effect of a meeting vote and may be described as such in any document. [L 2001, c 105, pt of §1]

  A professional property manager was consulted on this matter and it is entirely legal for the Board to discuss and vote by email on actions by unanimous consent as long as the vote is ratified at the next face-to-face meeting. This method is also supported by Article IV, Section 2(d) of the Bylaws of the Corporation and has been used by all KB Boards since 2003.

• 6. Policy Regarding Signatures

  In this age of identity theft, it is common practice for online documents to use electronic signatures. The Board has adopted a policy of using electronic signatures for all signed documents. It is understood by the Directors that when they approve Actions by Unanimous Consent and Meeting Minutes, they are thereby agreeing to have their electronic signatures affixed to the document.

  ""Usage of electronic signatures in the law is continuing to expand and is being afforded the same legal effect as the traditional signatures that are memorialized on paper."

• 7. Policy Regarding Meeting Minutes

  The Board has determined that it is in the best interests of the HOA that more detail than usual is included in the Minutes of any meeting so as to serve as a historical account of what actions have been taken and what issues have been dealt with in Kuau Bayview in any given year. This concise history of Kuau Bayview will serve as a handy reference for the current Board as well as Boards far into the future. Similar issues often come up and it is very useful to see how they were resolved in the past. When a good solution is found, it justifies its establishment as a policy or procedure, to be used as a model in the resolution of future conflicts. This avoids the necessity for each new Board to expend time and resources to "re-invent the wheel."

• 8. Policy Regarding Zoning Violations, ie. Illegal Rentals

  As zoning violations are the purview of the County, it has been the Board's longstanding policy to defer to the County on these matters. The County has Zoning Inspectors and a Request for Service (RFS) system designed specifically to handle such violations. Board members are simply homeowners like you who have no means to police rentals, nor is it their job. If you believe there is an illegal rental that is adversely affecting your life, then please file an RFS with the County. The Board cannot help with illegal rentals.

• 9. Policy Regarding Harassment of the Board Members

  Unfortunately, in every community there are always a few people who refuse to comply with the rules and refuse to cooperate in resolving issues. Directors can be harassed by owners with endless emails, letters, phone calls, visits to home & business, ultimatums, demands, false allegations, threats of lawsuits, libelous flyers, certified letters, and more. This can make life very difficult for the Board members and waste a huge amount of their personal time. One Board was harassed to such an extreme in 2003-2004, that the entire Board resigned. Please know that we are all working very hard to look after the Association's best interests, and we count on the other owners' support and understanding when we refuse to tolerate this type of senseless attack by not participating.

  Whenever legal action is taken or threatened against the Board or the HOA, the Board is obligated to inform the homeowners and keep them apprised as things progress. This will be done via the website.

• 10. Policy Regarding Transfer Fees Paid by New Owners

  When a property in a covenanted subdivision is sold, typical closing costs during escrow are transfer fees (usually $250-$400) and document fees (usually $300+) paid by the buyer to the managing agent to cover the costs associated with answering the escrow demand letter, providing the required documents, setting up the new owner account, changing all the records to register the new member, receiving and filing the deed after closing, and depositing the checks. State laws do not limit the amount managing agents can charge for these services and they go hand-in-hand with higher maintenance fees since they do not offset expenses in any way. In Kuau Bayview the HOA Manager and the Board have mutually agreed to set these combined fees at $600 and make them payable to the HOA instead of to the managing agent. A lot of work goes into making all the documents and Minutes available on the website, and effecting these property transfers, and no one gets paid for those efforts. The Board considers it fair and equitable that these transfer fees go into the general operating fund for the benefit of all owners, including new members, by enabling us to keep the annual dues as low as possible. With annual dues only $100 when they used to be $300, the new owner will recoup the $600 in savings within 3 years.

• 11. Policy Regarding Chickens in Kuau Bayview & the Maui Law re Chickens

  NO chickens are allowed in Kuau Bayview. None of the 92 lots is large enough to accommodate a chicken coop which by law must be at least 20 feet from any dwelling and not in a setback. One owner had been keeping feral chickens in the Retention Basin for years but in 2019 when this came to light, steps were taken to remove the chickens and relocate them to a farm in Pukalani.

  Maui County Ordinance 16.08A.R326 - Subsection R326 added.

  The International Residential Code is amended by adding a new subsection R326 to read as follows:

  R326 Animals. No horses, cows, calves, swine, goats, chickens, ducks, pigeons or other animals or fowl shall be kept in or within twenty feet from any dwelling. This section shall not apply to pets, such as dogs, cats, birds and other small, domesticated animals; provided, that such pets shall be limited to a reasonable number. -- (Ord. No. 3929, § 3, 2012)

• 12. Policy Regarding Access to the Retention Basin

  There shall be no access to the Retention Basin other than via the main gate. The owners of Lots 26-27-28-29, whose properties border the basin, shall not install private gates into the basin. Any tampering with the fence will be reported to the police. All unauthorized entry into the basin will be considered trespassing. Authorized entry requires explicit permission from the Board as well as a signed liability waiver so as not to invalidate our insurance policy.

• 13. Policy Regarding Realtors on the Board

  Realtors are excluded from holding Board positions unless they sign an affidavit agreeing not to market to Kuau Bayview owners or to seek to buy or sell properties in the Association. Realtor-Directors have unfair advantage over other realtors in the neighborhood, and the obvious conflicts of interest contributed greatly to the attempted coup in 2020 by a realtor seeking personal financial gain. Other Boards across the country have had similar problems with realtors on Boards.

• 14. Policy Regarding Home Businesses in Kuau Bayview

  Any home business that brings customers into Kuau Bayview must be approved by the Board first. This could include child care facilities, yoga classes, meditation groups, and the like. The HOA needs to be aware of such operations in advance so that there are agreements in place and protections for the community so that, if there are any abuses or adverse effects on other owners, the Board can send a cease and desist letter. Of course home businesses that don't bring customers, or very seldom, would not be affected. We just cannot afford to have another situation like the Lot 45 tenants' school that disrupted the entire neighborhood in 2020-2021.

• 15.

• 14. Useful & Interesting Links re HOA Policy

  HOA Transfer Fees

  Law Does Not Limit HOA Transfer Fees

  AZ Law Does Not Limit HOA Transfer Fees

  Demand for Rent Letter

  The New HOA Laws