SUGGESTIONS FOR CONDOMINIUM PURCHASERS

Purchasers of condominiums can make a more informed decision if they do their homework before purchasing a condominium. Under the sales contract, a seller typically provides the buyer with, among other things, copies of the Declaration, the By-laws, the House Rules, minutes of past Board meetings and the reserve study for the condominium association.

Admittedly, these documents are not the most exciting reading, but there is much information in these documents. They provide valuable information as to what you are buying, how the association is managed, the financial strength or weakness of the association, and insight into your rights and liabilities. If you do not want to or cannot read these documents yourself, we suggest it would be worth your while to hire someone to read these documents before you complete the purchase of the condominium.

The Declaration provides information about what you are purchasing and your responsibility. The Declaration defines the physical boundaries of the condominium. This is often important in

determining who is responsible for such things such as leaks, who is responsible for the repair and who is liable for any damage caused by the leak.

The Declaration sets forth each unit's percentage of common interest. The percentage of common interest is used to determine the owner's voting percentage and share of the building maintenance fees.

In a condominium, there are areas which are available for use by all people. These are known as common elements. Examples of common areas are a swimming pool, the lobby and the elevators. The Declaration will indicate what restrictions, if any, there are in using the common elements.

Condominiums may also have limited common elements. Examples of limited common elements are a unit's parking stall(s) or storage area.

A condominium is a community of owners. The By-laws are the procedures under which that community operates. It is important to know the rules of the game.

The minutes of past Board Meetings might provide insight as to whether the Association is dealing with issues such as major repairs or litigation. This might suggest prospective future costs to the condominium owners. The buyer should also review the current budget, the reserve study and the financial report of the auditor. The reserve study will provide insight into the moneys the association has in reserve. Does the association have sufficient reserves for future maintenance and for major projects such as replacing the roof of the building? Will the association have to assess owners to raise funds for these projects? Sometimes assessments can be quite substantial for things such as painting the building or a major repair.

A buyer should also check the extent and number of delinquencies that a condominium association has to assess whether it is financially well managed or whether other owners might be required to pay additional maintenance fees due to the non-payment by delinquent owners.

If you are interested of buying a condominium, these documents should be reviewed so that you can make an informed decision when you purchase your condominium.

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TIPS FOR LANDLORDS

Landlords may wish to consider picking up a copy of the Property Condition form that was revised by the Board of Realtors on September 2003 and released on November 2003. The form is available from the Honolulu Board of Realtors and is $1.00 a form. The address for the Board of Realtors is 1136 12 th Avenue, Suite 200, Honolulu, Hawaii 96816.

The Property Condition form is a checklist to document the condition of the rental premises at the move-in time and at the move-out time. While most landlord tenant situations do not give rise to problems, proper documentation is almost always helpful if problems do arise later.

You can also request the form from our office by sending us a self-addressed stamped envelope and enclosing a $1.50 for processing and handling. We will send you a copy of the form in the self-addressed stamped envelope provided.

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Land-Title Data Now on the Web

Researching Hawaii land titles is now easier and more convenient with the online posting of the general indexes of the state Department of Land and Natural Resources' Bureau of Conveyances at www.hawaii.gov/dlnr/bc. This site is also available through the Links & Resources section of our Website, www.attorneyhawaii.com . Instead of visiting the bureau for information about land titles, the public can access the Web site and order copies of the documents online. Access is limited.

Indexes dating back to 1976 are now available on the Web site. The index, containing millions of entries, is an alphabetical listing of all recorded transactions from 1976 and are updated daily. You still must go to the Bureau of Conveyances for pre-1976 filings.

Neighbor island residents without computer access can use one of the bureau's remote terminals in the Division of State Parks offices in Hilo, Lihue and Wailuku.

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CAUTION TO LANDLORDS

John Candon of Hawaii Elder Care Advisors brought the following to our attention:

A Landlords can be taken to court if they stipulate, in their leases, that tenants face eviction if they are unable to live independently. @ - AARP Bulletin 12/03

The Hawaii State legislature is considering a bill that would, among other things, remove any liability from condominium associations, boards and others for requesting a functional assessment and recommendations for services for seniors who are determined by them to be in the need of such services. Under this bill, the condominium association would determine who pays for any and all expenses involved.

Mr. Candon published a newsletter on issues involving elder care. If you have a question on elder care, please call them at 808-533-1270.

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FROM THE DESK OF HAROLD CHU:

We have included on page 1 of this newsletter some suggestions for condominium purchasers. When one purchases a condominium, one is becoming part of community. We want you to be aware of factors which may affect your ownership of a condominium.

Landlords and tenants should be aware that new standard forms were published by the Honolulu Board of Realtors in November, 2003. Many landlords still use the older forms and boiler plates forms found on the Internet or from office supply stores. When dealing with Hawaii rentals, we strongly encourage you to use the most recent form promulgated by the Hawaii Board of Realtors. These can be purchased from the Honolulu Board of Realtors at 1136 12 th Avenue, Suite 200, Honolulu, Hawaii 96816.

The reason that we strongly recommend using the most current forms is that the other forms sometimes contain provisions that conflict with current Hawaii law. Furthermore, if problems arise from the landlord-tenant relationship, the district court judges appear more comfortable when the standard Hawaii form is used rather than the other forms. The most recent forms were modified to address situations which Hawaii owners have experienced.

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You may have an occasion to search for information about the ownership of real property in Hawaii. Much of the information is of public knowledge. You no longer have to physically go to the Bureau of Conveyances at 1151 Punchbowl Street, Honolulu, Hawaii 96813. This information is now available at www.hawaii.gov/dlnr/bc . This site can also be accessed through the Links & Resources section of our Web site.

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I recently attended a family reunion in Arkansas. It has been approximately 40 years since I last lived in Arkansas. While it isn't much of a house, you can still buy a fee simple home and lot in Arkansas for under $20,000. What is different, however, is that there are now homes that sell for several hundred thousand dollars. Ah, progress!

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HUMOR

If you are feeling less sharp than usual or are having more than your share of "senior" moments, the following stories should make you feel better about yourself:

) Police in Oakland, California spent two hours attempting to subdue a gunman who had barricaded himself inside his home. After firing ten tear gas canisters, officers discovered that the man was standing beside them in the police line, shouting, "Please come out and give yourself up."

) A man walked into a Topeka, Kansas Kwik Stop, and asked for all the money in the cash drawer. Apparently, the take was too small, so he tied up the store clerk and worked the counter himself for three hours until police showed up and grabbed him.

) Police in Los Angeles had good luck with a robbery suspect who just couldn't control himself during a line-up. When detectives asked each man in the lineup to repeat the words, "Give me all your money or I'll shoot," the man shouted, "That's not what I said!"

) In Modesto, California, Steven Richard King was arrested for trying to hold up a Bank of America branch without a weapon. King used a thumb and a finger to simulate a gun, but unfortunately he failed to keep his hand in his pocket.

) An Illinois man, pretending to have a gun, kidnapped a motorist and forced him to drive to two different automated teller machines, wherein the kidnapper proceeded to withdraw money from his own bank accounts.

) Last summer, in Lake Isabella, located in the high desert, an hour east of Bakersfield, California, some folks, new to boating, were having a problem. No matter how hard they tried, they couldn't get their brand new 22 ft. boat going. It was very sluggish in almost every maneuver, no matter how much power was applied. After about an hour of trying to make it go, they putted to a nearby marina, thinking someone there could tell them what was wrong. A thorough topside check revealed everything was in perfect working condition. The engine ran fine, the out drive went up and down, and the propeller was the correct size and pitch. So, one of the marina guys jumped in the water to check underneath. He came up choking on water, he was laughing so hard. Under the boat, still strapped securely in place, was the trailer.

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Tax Quotes

But in this world nothing is certain but death and taxes.

(Benjamin Franklin)

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A taxpayer is someone who works for the federal government, but who doesn't have to take a civil service examination. (Ronald Reagan)

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The trick is to stop thinking of it as 'your' money. (Revenue auditor)

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The hardest thing in the world to understand is income tax! (Albert Einstein)

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To please universally was the object of his life; but to tax and to please, no more than to love and to be wise, is not given to men. (Edmund Burke)

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When there is an income tax, the just man will pay more and the unjust less on the same amount of income. (Plato)

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Like mothers, taxes are often misunderstood, but seldom forgotten. (Lord Bramwell)

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There is no art which one government sooner learns from another than that of draining money from the pockets of the people. (Adam Smith)

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In the matter of taxation, every privilege is an injustice. (Voltaire)

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