"This all could have been avoided. They refused our offer to work things out amongst ourselves in 2020, before it ever went to court. They refused to mediate in a meaningful manner in December of 2021. They refused binding arbitration which would have ended the debate in December of 2022, and refused to acknowledge the non-binding arbitration proceedings, unsuccessfully filing frivolous motions meant only to delay. Most importantly, to this day have failed to finish the project in spite of an arbitrators ruling that they must do so. These I believe are the main factors leading to the huge spike in KMS insurance premiums. We need a complete head-to-toe regime change before we all lose our properties"....KMS Extended Lanai Owner.
As per one investigator, as KMS owners have begrudgingly become aware, the insurance company, which previously insured KMS for a minimal annual policy charge with minimal deductibles, declined to renew KMS policy for 2023. One reason they gave for dropping the policy, according to one source, was that the extended lanai project has been going on for 2.5 years and the Board has failed to complete it, causing an increasing cost liability risk factor for them. The only company which the AOAO could find that would insure them, would do so only at a premium cost of $195,876 or a $86,292 or 128.94 % per an-um increase. The cost per unit increased from $2,271.00 to $5,199.00 annually. They also added a $25,000 deductible per claim and no guarantee of renewal. According to the source, there was no choice, the AOAO had to sign their exorbitant contract as insurance is mandated by Hawaii law 514-B.
"It's no different than a a person who gets into multiple frivolous car accidents who later tries to get auto insurance...good luck getting it without paying out the ass"...KMS homeowner.
Do you think the old lanai railings just haphazardly sitting on the KMS rooftop for months on end may have worried the insurance carrier? Some BOD members are using the foolish excuse that the AOAO plans to re-use these railings when the contractor has clearly stated that these railings are the main cause of the water damage to the lanais and that they will not be re-used.
How about NO railings where railings should be? Would this perhaps worry an insurance carrier? It's been three years. This is in spite of formal requests going back years, by affected owners to at least install temporary safety railings. Why i the AOAO refusing to make the KMS building safe?
AOAO RESERVES NOT ENOUGH TO AVOID INSURANCE ASSESSMENTS
In combination with BOD alleged mismanagement and negligence in failing to maintain the minimum balance of reserve funding at levels mandated by KMS bylaws and Hawaii statutes, there is not enough money in said reserves to pay for the increased insurance premium. So, the Board merely assessed all owners $2463.62 each just to pay for this year’s premium of $197,556. Contained in a recent memo from Associa of Hawaii the KMS new Managing Co. of record Association Manager responsible for KMS recently stated, “we can’t even get a plumber to work at KMS”.
AOAO BOARD FORCES OWNERS TO COVER NEW INSURANCE CO DEDUCTIBLES
As if this was not enough to make your blood boil the same Board recently mandated a requirement by all owners to increase their HO1-6 insurance policy payout ceiling to $25,000 to cover the $25,000 deductible per claim by the new insurance carrier. In actuality, KMS just We are paying for the $195,876 AOAO policy plus $300 or more for KMS HO1-6 policies. What do you think the HO1-6 insurance carrier will do when they discover that their policy, mandated by the State to cover interior condo to condo no fault claims is now being used to cover KMS primary insurance co $25,000 deductible. Gentlemen, get out your wallets.
IS THIS A BIG THREAT TO YOUR INVESTMENTS?
After the Board botched the project the first time the ELO obtained their building permits on July 28th 2022 almost NINE months ago and yet there has been no resumption of construction. Each ELO had to pay a $1000.00 fine because the Board failed to obtain the permits. That’s $8000.00 for doing nothing wrong. This Board has been urged repeatedly by all eight extended lanai owners, the Architect of Record, two Board members, Management Co Associa Hawaii and the general contractor to complete the project. The insurance company has apparently made it clear that should this construction not be completed in the next 7 months it is unlikely they will renew KMS policy. According to research done by a KMS owner, the State of Hawaii 514-B mandates that all condominium projects have and maintain insurance coverage. If this BOD does not resume and complete the lanai project within 7 months and KMS cannot procure insurance coverage, KMS owners will not be permitted to rent or otherwise occupy their condominiums or the restaurant. This will not only cause most owners to suffer catastrophic losses of rental income but also, they will not be able to sell their units, get a letter of credit or loan on the property until the insurance mandate is satisfied. In short, your condos will be worthless. This at a loss of from $500,000 to one million per condo owner. How can anyone justify what they are doing to all of us?
Comments