Auditor Recommends Against Certification of Condominium Association Managers

On May 3, 2005, the Hawaii Legislature adopted a resolution asking the Legislative Auditor to conduct a sunrise review of the certification of condominium association managers. This is the first step before a profession is regulated by the State of Hawaii.

On December 22, 2005, the Auditor transmitted a letter to the Hawaii Senate President informing him of the recommendation against the mandatory certification of managers. The actual report explains the reasons for the recommendation:

The proposed regulation is unnecessary for several reasons. We found little evidence that condominium association managers have presented a danger to the health, safety, and welfare of the public. Most of the complaints filed at the Regulated Industries Complaint Office related to problems between condominium owners and their boards. In addition, complainants have many remedies available to them. Mediation services are available from the Real Estate Commission and the Regulated Industries Complaints Office. The Legislature also established a Condominium Dispute Resolution Program that would allow cases that hand not been resolved through mediation to be heard by the Commerce Department's Office of Administrative Hearing.

The Legislative Auditor also stated that the Recodification will be effective in a few months and it would be premature to consider any regulatory changes until the new law comes into effect and its impact on condominium management can be assessed.

The Legislative Auditor's standard for evaluating whether a profession is to be regulated is whether there is a significant risk to the health, safety and welfare of the public. On that basis, the Legislative Auditor has taken the position that various professions should not be regulated. Despite these recommendations, the Legislature has decided to regulate many professions. So, there is still a possibility that the Legislature will approve legislation requiring certification of condominium association managers during the upcoming legislative session.