IREM Newsletter Spring 2014

UPCOMING EVENTS

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19th Annual Aaron M.Chaney Golf Tournament

at the Hawaii PrinceGolf Course.

Vendor Blender andIREM Hawaii Annual ®

Meeting.

17Sept

11Jul

PRESIDENT’S MESSAGEPresident’s Message

Golf Event

Seminars

Classes

2014 Installation

Friends of IREM

Presentations

Articles

NEWSLETTERSPRING 2014

Hawaii Chapter 34Hawaii Chapter 34Proudly serving Hawaii’s Real Estate

Management industry since 1957Proudly serving Hawaii’s Real Estate

Management Industry since 1957

CERTIFIED PROPERTY MANAGER

ACCREDITED RESIDENTIAL MANAGER

ACCREDITED COMMERCIAL MANAGER

ACCREDITED MANAGEMENT ORGANIZATION

EDUCATION ETHICS EXCELLENCE

www.iremhawaii.org

IREM Hawaii Chapter kicked off 2014 with our annual Forecast breakfast meeting on January 22nd. Together with BOMA Hawaii and CCIM Hawaii Chapter, the Forecast meeting hosted almost 700 property managers, realtors, and business executives, all eager to hear what the experts were predicting for the year. Wendell F. Brooks, Jr., Matt Bittick, C. Mark Ambard, Mark Hamasu, Bill Chee, Joseph M. Toy, and Paul Brewbaker made up the panel of speakers, moderated by Howard Dicus. The audience was treated to the panels' wealth of knowledge, as they shared their years of experience. Michelle Wong, R, CPM

IREM® Hawaii Chapter President

The Hawaii Chapter of the Institute of Real Estate Management presents its

19th Annual Aaron M. Chaney Golf Tournament

on July 11th, 2014 at the Hawaii Prince Golf Course.

Guest speaker Gwen Fujie gave a seminar called "A Taste of Tongue Fu!: How to deflect, disarm, & defuse verbal conflict". Tongue Fu! is the constructive alternative to giving a tongue-lashing or to being tongue-tied. It is a step-by-step process for turning hostility into harmony and aggravation into aloha.

IREM HAWAII NEWSLETTER SPRING 2014 2


Hawaii Chapter 34Hawaii Chapter 34

The many new and continuing projects happening in the future will change the market. including the Ward expansion, Ala Moana Shopping Center, Kapolei Commons, Kaneohe Ranch on Oahu, as well as projects on Maui, Kauai, and the Big Island. Consumers can look forward to the arrival of long awaited retailers such as Dicks, Uniqlo, Saks, Urban Outfitters, as well as expansion from Ross, TJ Max, and Target, to name a few.

If you crave a Sonics' slush or pasta from Olive Garden, you may not have to travel across the ocean again, as both have plans to open in Hawaii. Office and business tenants reevaluating costs may look at how their space is being used. They may need less space per employee as they have before as technology and work methods evolve. Some areas will experience less supply which may increase prices, but higher prices do not always mean more income as expenses rise.

Expansion, demand, interest rates, occupancy rates, supply, tourism, are all factors in the big future of Hawaii. How does Hawaii's economy look for 2014? The panel was optimistic. We hope so too!

FROM COVER

Michelle Wong, R, CPM IREM® Hawaii Chapter President

ACKNOWLEDGMENTS

The Institute of Real Estate Management (IREM) is proud to acknowledge the following members in earning their credentials in the first quarter of 2014:

CERTIFIED PROPERTY MANAGER® (CPM®)Daniel Espinosa, Lani Properties CorporationJoylin Shum, Lani Properties Corporation

ACCREDITED RESIDENTIAL MANAGER® (ARM®) Janet Maeshiro, AOAO University Towers Leslie Hart, Island Palm Communities, LLCE. Brad Richards, Island Palm Communities LLCTeresa Brown, Island Palm CommunitiesMaryann Laskarakis, Palehua Villas Michelle Wong, CPM®, Ideal Properties, Inc.Gifford Chang, CPM®, Ideal Properties, Inc.

IREM also welcomes the following new members:

CPM CandidatePaul Tucker, Captain Cook Resorts

Associate MemberDavid Thomson, Associa Hawaii

If you are interested in becoming an IREM member or have questions regarding IREM's credentials, please contact Kristi Hirota-Schmidt, VP of Membership, at 837-5289 or [email protected].

We had a great event after the Hawaii Buildings, Facilities & Property Management Expo!

We want you to join us to make the next event even better!

If you like food, great ambiance, music, entertainment, and more then don't miss these awesome social events! We will keep you posted!




Give Them "L”! Look - make eye contact Listen - pay attention Lean in - show that you are interested Lift (both) eyebrows - facial expressions to show concern (get on their) Level - stand or sit Let them talk - hear them out Love them - have compassion Think before you speak: do your words mirror your intention?Remember: People hear your words, but feel your attitude.Good intentions get lost because of: Perception Poor body language Tone Lack of eye contactCommunication is 55% Visual, 38% Vocal, 7% Verbal.Take notes when talking to someone, it makes them more aware of what they say.

Service Recovery AGREE - Do not blame someone else or make excuses! APOLOGIZE - Say “you're right" ACT - Tell them the steps you will take to correct the issue. APPRECIATE - "Thank you for bringing this to my attention."

Happiness is contagious. Be grateful, feel privileged. Think "I get to.." rather than "I have to.."

Mantra: I see you. I hear you. You matter to me.

1. Be impeccable with your word.2. Don't take things seriously.3. Don't make assumptions.4. Always do your best (even though your best sometimes varies)

Accentuate the positive, eliminate the negative:For Example: Negative = "Stop interrupting me"; Positive = "Please, let me finish" Do not use ALWAYS or NEVER. Do not use YOU ARE ALWAYS COMPLAINING; instead use WHAT ARE YOUR SUGGESTIONS? Do not use SHOULD HAVE; instead use NEXT TIME/IN THE FUTURE Do not use NO, I CAN'T BECAUSE; instead use YES, AS SOON AS Do not ask WHAT IS THE PROBLEM?; instead ask HOW MAY I HELP YOU? Do not say WE ARE SHORT STAFFED; instead say THANK YOU FOR WAITING. Do not say IT'S NOT MY JOB; instead say LET ME GET THE PERSON WHO CAN HELP YOU. Do not use THERE IS NOTHING I CAN DO, instead use I WISH I COULD/I HOPE or THIS IS WHAT I CAN DO and offer alternative

Here's few highlights of the event.

On February, 19th 2014 we had a presentation "A Taste of Tongue Fu:

How to deflect, disarm, & defuse verbal conflict"

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Never let a THANK YOU go unanswered. Respond with “You're welcome!", "My pleasure!", or "Happy to help!"; do not respond with "No problem."

Keep in mind the privilege of what you do instead of "I have to do this", and always find reason to be thankful!

How people see you will depend on your body language. They will perceive you as friendly when: 1- You make eye contact 2- You are an active listener 3- You lean your body a bit forward and raise your eyebrows to show interest in your facial expression. 4- You level with them by standing or sitting.

Words will leave an impression, people will react to you depending on how you respond to them: 1- Be nice! People like to hear nice things. 2- Care. People can feel if you are being considerate or just a passive non-attentive listener. 3- Think before you speak. 4- Be non-confrontational, but be brave if you have to.

People get hurt even if you don't mean it: 1- People may have a different way to look at things. 2- People will not perceive your good intentions. 3- Sometimes, even if they perceive our intentions, they don't absolve us.

Recovery right moves: 1- Agree. Acknowledge that something is wrong. Do not provide excuses. 2- Apologize. Give a genuine apology about the situation. Don't take personally. 3- Act. Let them know you will follow up by stating what you will do about the situation. 4- Thank them for bringing to your attention.

IREM MEMBER?

DO YOU KNOW SOMEONEWHO’D MAKE A GREAT

Do you know someone who you believe would:

If you said “YES” to any of these questions, invite him/her to one of our General Membership Meetings as a prospective member and lunch will be on us!

Institute of Real Estate Management-Hawaii Chapter

1259 A’ala StreetHonolulu, Hawaii 96817

(808) 733-7060

(a) make a great IREM member?(b) be interested in furthering his/her career in Real Estate Management?(c) be an ideal candidate for the ARM or CPM designation?




From: HawaiiNewsNow

NOAA's climate prediction center has issued an El Nino watch, which here in Hawai'i could mean a return to drought-like conditions and an increase in hurricane threats.Climate experts are saying there are no guarantees, but they believe there is a 50% chance El Nino will develop over the next six months. El Nino conditions are declared when the average sea surface temperatures in the eastern Pacific are at least 0.5°C above average for three consecutive months. These abnormally elevated sea surface temperatures allow for the atmosphere to warm and provide instability. Experts say Hawai'i has been very lucky to have avoided major hurricane events in recent years, but cautions some of the worst tropical cyclones have occurred during El Nino years -- like Hurricane Iwa and Hurricane Iniki. "Some El Nino years we've seen a lot of hurricanes develop, but they all go harmlessly south of the islands and they just go east to west and they stay on their merry way. That's what happens a lot of the time, but then you can get into situations like Hurricane Iwa or Hurricane Iniki which recurve. Especially those later season hurricanes, when you get into the middle to latter half of the season, and the islands can get into a greater threat," explained Ballard. The last El Nino was late 2009/early 2010, while the last one NOAA predicted was in 2012 but never quite materialized. For full text and video please check link below:http://www.hawaiinewsnow.com/story/24920146/noaa-issues-el-nino-watch

Emergency Preparedness Book

Emergency Preparedness Suggestions:

Enroll your building in the: Hawaii State Private Sheltering Program Hawaii State representative will provides non-structural evaluation of the property for hurricane resistance. If qualifications are met and property is registered in the program, your property would be protected under HRS 128-19 from liability resulting from actions as a private shelter. http://www.scd.hawaii.gov/documents/CONDO_QUESTIONAIRE110508.pdf

EMERGENCY PREPAREDNESS: El Nino watch

IREM has an excellent book about emergency preparedness called: Before and After Disaster Strikes: Developing the Emergency Procedures Manual, Fourth Edition. It is designed to be a guide and resource for real estate managers as they create the emergency procedures plan and develop the emergency procedures manual for the properties they manage.

Sign up for Nixle and receive notifications and alerts from the Honolulu Department of Emergency Management & other public safety agencies in your area. www.nixle.com




Web Resources

Pacific Disaster Center provides near real-time and historic data on natural hazards around the globe through the online Global Hazards Atlas. The Disaster Alert mobile app is also available. www.pdc.org

National Weather Service - Honolulu Forecast Officefeatures the latest advisories, watches, and warnings for the Hawaiian Islands. www.prh.noaa.gov/hnl/

Central Pacific Hurricane Centeroffers storm tracking via satellite and radar. www.prh.noaa.gov/hnl/cphc

Pacific Tsunami Warning Centershows the latest tsunami messages for all regions.http://ptwc.weather.gov/

USGS Earthquake Hazards Programprovides tracking and historical information as well as preparedness tips.http://earthquake.usgs.gov

American Red Cross - Hawaii Chapterhas information on Red Cross trainings and an online store for emergency gear. www.hawaiiredcross.org

Federal Emergency Management Agency contains a comprehensive guide to preparedness for the average citizen. www.fema.gov/areyouready

Let's Get Ready is a resource from Sesame Workshop to help the whole family prepare for emergencies.www.sesamestreet.org/parents/topicsandactivities/toolkits/ready

FEMA Independent Study Programprovides online training in a variety of subjects, including Animals in Disasters and an Introduction to Hazardous Materials.http://training.fema.gov/IS/crslist.aspx

Sprint Relay Hawaii is a text notification tool for the hearing impaired. www.relayhawaii.com

EMERGENCY PREPAREDNESS




Special Assessments Presentation

"The Good,

The Bad and The UGLY”

First speaker: JOHN MORRIS FROM EKIMOTO & MORRIS

Why are they necessary?

A special assessment is one solution to a situation in which the Association can't pay for a necessary repair or replacement project which was not included in the budget for whatever reason. (For more legal details see Attachment #1 prepared by Mr. John Morris.)

Second speaker: CHUCK RAY FROM HAWAIIANA MANAGEMENT CO.

“DON'T LET IT HAPPEN!”

The most important thing to know about a special assessment is how to prevent it from happening in the first place. Many, if not most, special assessments can be attributed to improper budgeting. Due to some Board’s resistance to increasing maintenance fees, many Associations find themselves underfunded, greatly increasing the risk of an otherwise unnecessary special assessment. Severely underfunded reserves will almost certainly result in the need to assess at some point, so it is important that Associations conduct an adequate reserve study and adopt a realistic budget. It is equally important to faithfully follow the approved budget plan, raising maintenance fees as stipulated in the plan.

In some instances, even with the best budget planning, a special assessment may be necessary due to unforeseeable circumstances, catastrophe, or acts of god. With sound planning, as well as a Board's willingness to adhere to its budget, many of the situations that result in a special assessment can be avoided.

Third speaker: BLAKE ANZAI FROM TERRITORIAL SAVINGS

Generally, loans are paid back over 10 years. The bank loans to the Association as a whole not to the individuals. In today's market rates are good (around 4.5% fixed). Banks like to loan to Associations because it is considered low risk. As any other loan, there are additional costs such as Loan Fees (which may be around 1%), along with hard costs such as documentation and recording fees.

Fourth speaker: RON KOMINE FROM AOAO 1350 Ala Moana

The building is 45 years old. I've been the General Manager for more than five years, and from the first day I stepped foot in the building we had leaks. We had ongoing problems with our drain and fresh water systems. Constant water shutdowns and repairs were needed just to keep the building operational. We were at a point where no insurance company wanted to cover us. Without insurance, owners can't refinance their mortgages, no one can get financial help, etc. We had no choice but to replace the entire system - the drain, waste, and vent lines. A project of such magnitude requires lots of logistics.

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From proper communications with residents, to finding space for contractors and materials, you must factor everything.

Also, be prepared for surprises along the way. The 14 million dollar price tag for the whole thing is a mix of other needed projects. During our preliminary investigation phase, we poked around to see how the system worked. When we opened up the chase we found all sorts of fire hazards - extension cords, no fire stopping, single-layer drywall, wood backing. During the pilot project, the team came across other unforeseen conditions and deficiencies and added some upgrades that expanded the scope of work to include:

Asbestos abatement New pipe supports to meet revised seismic code requirements Fire stopping and repair of fire rated wall assemblies Removal of electrical and fire hazards Installation of unit isolation ball valves to shut off service to each unit's bathroom Replacement of the existing washer supply and drain box Installation of insulation on hot water supply pipes to increase energy efficiency Replacement of worn out tub drain and overflow piping

1. Be InterestingNetworking can be really boring, especially when everyone seems to have the same pitch; "buy my properties, they are the best and I give the best discounts", or "deliver the highest returns", or can "help you sell your home and avoid foreclosure". This just makes people tune out. What do you do different from everyone else?

2. Focus on What You Can Do for ThemThe bottom line is that most potential prospects or referral partners really don't care about you, your real estate investing business and what you do. They care about what you can do for them, which no one else is solving. When networking with Realtors, loan officers and attorneys the odds are they want more business and coverage. How can you deliver that?

3. Practice, Practice, PracticeWhether it is introducing yourself on stage, at round table events, or even in the elevator, it pays to have practiced your pitch. It doesn't matter how great the script is if it doesn't sound natural.

4. Hone in on the FewYou don't need to connect with or win everyone in the room. Set specific goals before you head out the door and hone in on a few valuable contacts you can actually work with.

5. Create Results on the SpotOf course no one wants to be sold on the spot, but if you simply hand out business cards the odds are they won't even remember you in the morning and you'll just start getting more junk mail. Instead exchange Facebook likes, Twitter follows, and join each other's G+ circles on the spot and set up lunches or appointments with the best leads for later in the week.

5 Tips for Better Networking

S. Steven Sofos, (B) CPMChairman/CEOSofos Realty Corporation


FRIENDS OF IREM® HAWAII CHAPTER 34I’d Like to Thank Our Sponsors:

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CONTACT US

WEBSITE:www.iremhawaii.org

EMAIL:[email protected]

FACEBOOK:www.facebook.com/iremhawaii

IREM HAWAII PHONE / FAX:

(808) 536-4736 / (808) 259-0165

IREM® Hawaii P.O. Box 4577Honoululu, HI 96812

Would you like to write some articles? Maybe interview other members? We are looking for member articles.

We need qualitative readings with mainly local content that helps our readers to identify themselves with the newsletter. Thus we are reaching out for you to help us with content for our newsletter.

Contact :Fernando Bastos, ARM®; B.O.C®; M.B.A., Phone: (808) 983-3916or Email content to: [email protected]

We are looking for VOLUNTEERS to help provide quality local content for our newsletter.

FRIENDS OF IREM® HAWAII CHAPTER 34I’d Like to Thank Our Sponsors:

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attachment 1

HBFPM Expo Seminar March 12, 2014

LEGAL ASPECTS OF SPECIAL ASSESSMENTSJohn Morris, Ekimoto & Morris LLLC

WHY ARE THEY NECESSARY? SHOULDN'T THE RESERVES LAW ENSURE THAT AT LEAST CONDOMINIUMS HAVE ALL THE MONEY THEY NEED TO UNDERTAKE MAJOR PROJECTS? The law allows condominium reserves funded under the "percent funded" method (as opposed to the "cash flow" method) to be funded at only a 50% level and specifically allows the other 50% of the reserves to be funded by loans or special assessments (see section 514B-148(b)). In addition, the law recognizes that reserve studies are often only projections, not precise numbers; hence, the "good faith exemption" found in the condominium law (see section 514B-148(d)).

WHAT ARE THE LIMITS IN THE LAW ON SPECIAL ASSESSMENTS? The law limits the right of the board to increase the budget during the year to which the budget relates, except in "emergency situations" as defined in the law (see section 514B-148(h)) or with the approval of a majority of the owners. (See section 514B-148(e).) Example: For 2014, a board adopts a budget of $500,000 (including reserves and operating expenses). The board cannot exceed that amount for 2014 by more than 20% ($100,000) except in "emergency situations" or with the approval of a majority of the owners. (The 20% limit would not, however, apply to the budget for 2015, which can increase by more than 20% over the 2014 budget. The law simply imposes a "no surprises for a year" limit.)

WHAT ABOUT LIMITS IN THE DECLARATION AND BYLAWS? At least for condominiums, the law overrides those limits for items that are included on a condominium association's reserve study (see section 514B-148(f)). Example: the bylaws of the association prohibit the board from spending more than $10,000 on repairs, improvements, alterations, or additions without the approval of a majority of the owners. The association's reserve study includes a line item to replace the roofs of all the buildings in the condominium with brand-new roofs at a cost of $200,000. The condominium law and the real estate commission rules state that the $10,000 limit will not apply because the expense is included on the association's reserve study.

In contrast, if the board were proposing to spend $30,000 on constructing a new gazebo on the project grounds (where none existed before), the $10,000 limit would apply to that expenditure because the expenditure would be adding a new structure to the project - an improvement (or alteration) - not replacing an existing structure. (Reserve studies focus on the repair or replacement of existing major components of the project.)

WHAT IF THE EXPENSE LISTED ON THE RESERVE STUDY WILL BE AN IMPROVEMENT? Example: an association has scheduled the replacement of its elevators on the reserve study but learns that the existing elevator controls and motors are obsolete and must be replaced with new components. The new equipment could be considered an "improvement” over the existing equipment, not simply a repair, thereby triggering the $10,000 limit. Arguably, however, the law should still override the $10,000 limit for improvements that result from the obsolescence of existing equipment because it is no longer possible to make a like-for-like replacement of obsolete components.

WHAT IF SOME OWNERS CANNOT PAY THE SPECIAL ASSESSMENT? CAN THE ASSOCIATION GIVE THEM CREDIT? IS THAT LEGAL? Ask your attorney! The law does not really cover this issue. Some associations will allow owners to pay the special assessment over time, in effect, giving a loan to the owners who cannot pay the full special assessment on time. Some, but not many declarations and bylaws may prohibit the association from giving loans. The law only prohibits the association from taking out a loan without majority owner approval and does not address the association giving a loan.

If the association charges interest to the owner who pays over time, does that violate a prohibition in the association bylaws on the association engaging in a business for profit? Possibly not, if the interest rate is the same as the owner would pay a lender or the same as the association would realize if it put the same special assessment money in the bank.

It is probably simpler to have the owners get their own loan and pay the special assessment in full. That way, there are no collection problems and no complications.

Non-condominiums (e.g., co-ops, planned communities) should review their governing documents for more information on this issue.

LAW

[§5148-148] Association fiscal matters; budgets and reserves.

* * *

(b) The association shall assess the unit owners to either fund a minimum of fifty per cent of the estimated replacement reserves or fund one hundred per cent of the estimated replacement reserves when using a cash flow plan; provided that a new association need not collect estimated replacement reserves until the fiscal year which begins after the association's first annual meeting. For each fiscal year, the association shall collect the amount assessed to fund the estimated replacement for that fiscal year reserves, as determined by the association's plan.

* * *

(d) No association or unit owner, director, officer, managing agent, or employee of an association who makes a good faith effort to calculate the estimated replacement reserves for an association shall be liable if the estimate subsequently proves incorrect.

(d) Except in emergency situations or with the approval of a majority of the unit owners, a board may not exceed its total adopted annual operating budget by more than twenty per cent during the fiscal year to which the budget relates. Before imposing or collecting an assessment under this subsection that has not been approved by a majority of the unit owners, the board shall adopt a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, and the resolution shall be distributed to the members with the notice of assessment.

(f) The requirements of this section shall override any requirements in an association's declaration, bylaws, or any other association documents relating to preparation of budgets, calculation of reserve requirements, assessment and funding of reserves, and expenditures from reserves with the exception of:(1) Any requirements in an association's declaration, bylaws, or any other association documents which require the association to collect more than fifty per cent of reserve requirements ; or(2) Any provisions relating to upgrading the common elements, such as additions, improvements, and alterations to the common elements.

* * *

(h) As used in this section:

* * *

"Emergency situation" means any extraordinary expenses:(1) Required by an order of a court;(2) Necessary to repair or maintain any part of the property for which the association is responsible where a threat to personal safety on the property is discovered ;(3) Necessary to repair any part of the property for which the association is responsible that could not have been reasonably foreseen by the board in preparing and distributing the annual operating budget ;(4) Necessary to respond to any legal or administrative proceeding brought against the association that could not have been reasonably foreseen by the board in preparing and distributing the annual operating budget ; or(5) Necessary for the association to obtain adequate insurance for the property which the association must insure.

* * *

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§16-107-69 Conflict of chapter 514A, HRS, and this subchapter with association declaration or bylaw requirements. (a) Chapter 514A, HRS, and this subchapter shall override any contrary provisions in a project's declaration or an association's bylaws, or any other applicable documents regarding: preparation of budgets, calculation of reserve requirements, and assessment and funding of reserves. Except as stated in subsection (b), limits on spending or assessments shall not restrict the board's right to spend or assess for items required by the association's reserve study.

(b) Chapter 514A, HRS, and this subchapter shall not override any contrary provisions in a project's declaration, an association's bylaws or other applicable documents:

(1) Requiring the board to collect more than the association's statutory replacement reserves;

(2) Restricting a board's right to assess or spend to upgrade the common elements for such things as additions, alterations, or improvements; or

(3) Requiring a board to repair or maintain assets more frequently than the law, this subchapter, or the association's replacement reserve study requires. [Eff 1/2/95] (Auth: HRS §§514A-83.6, 514A-99) (Imp: HRS §5 l 4A-83.6)

§16-107-72 Borrowing and special assessments to fund replacement reserves. Provided an association assesses and collects sufficient funds to comply with the law and these rules, the association board may:

(1) Transfer funds between the separate, designated funds required by section 16-107-66, subject to the requirements of that section;

(2) Borrow funds, subject to the requirements of section 514A-82.3, HRS; and

(3) Specially assess the apartment owners; to pay the cost to maintain, repair, or replace assets of the association. This section shall apply if the board underestimates the reserve requirements for an asset, or if the cost to maintain, repair, or replace an asset will reduce the association's replacement reserve funds to less than fifty per cent of a full replacement reserve during any budget year.

Documents

IREM Newsletter Spring 2014