On December 16th, 2022, a few days ahead of the December 20, 2022 Board meeting, the AOAO presented to all owners, for the first time, a draft resolution for imposing on owners a per-rental guest registration fee. The Draft Resolution included the following elements:

• Starting April 1, 2023, a $40 fee would be assessed against owners for every registration a non-owner guest that registers themselves with the front desk.
• Exceptions are provided for owners themselves, and up to 4 waivers per year for “non-owner family or friends.”

The $40 expense was intended to cover costs incurred by the front desk in performing the following activities:

• “register guests”
• “process parking passes”
• “collect information to confirm that the guests are complying with the minimum five night stay and occupancy limits imposed by the rules of the Project.”

The Resolution further includes a legal analysis that provides an alleged basis for the legal authority of the Board to act unilaterally without an owner vote. The alleged basis includes the following statement:

At the December 20, 2022 Board meeting, the proposed resolution was amended to reduce the per-registration fee from $40 to $35, and then approved by unanimous vote of the Directors.

On January 5th, a fee resolution cover letter and Final Draft of the Fee Resolution, which was approved unanimously by the Board in the December 20 meeting, was emailed to owners. Except for the small reduction in fee amount, the final resolution is substantially the same as the draft proposal first mailed out December 16.

The Royal Mauian Owners Group (“RMOG”) (who sponsors this website as a public service to all Royal Mauian Owners) respectfully opposes the legal basis for the Board's action imposing registration fees, and asserts that the Board does not have the power to circumvent or contravene the clear intention and language of the Bylaws.

The Board's Position: From page 1 of the final resolution:

(emphasis in original, highlighting added).

RMOG's position: We agree that:

1. The HOA is empowered by this section to collect registration forms and issue parking passes because these activities are part of the “administration of the affairs of the association.”
2. The power of the Board of Directors is limited by the Bylaws and government laws and regulations.

There is no specific language in the Bylaws supporting the Board's position that they have the power to impose registration fees. And, as explained below, the Bylaws explicitly prohibits the imposition of special fees against some subset of owners.

The Board's position: From the final Resolution, page 1:

RMOG's position:

1. The RMOG agrees that Section 7(b) assigns responsibility to the Board for determining common expenses, and notes with appreciation that the Board acknowledges that the front desk serves the entire community at least to some extent (at least 30%). Furthermore RMOG does not believe any authority exists to apportion expenses of the front desk according to who the Board believes most uses the services thereof. In fact, the Bylaws (Section 9) specifically and broadly define “common expenses” as “all costs, expenses, fees and charges incurred by the Association of Apartment Owners . . , for the administration of the affairs of the Association of Apartment Owners and for the operation, care, and maintenance of the common elements . . .” (emphasis added). See the Bylaws (from the HOA's website). Registration fees and parking pass management are “for the administration of the affairs” of the HOA and as explained above, all costs for such expenses must be allocated based only on the ownership interest of each unit. The registration and parking pass functions are “for the administration of the affairs” because they are functions that the HOA is required to perform for itself, not for owners who rent – we already know who our tenants are.

2. Furthermore, the Board argues that “This resolution has no impact on the apportionment of expenses for common elements” (cover letter to the final resolution, first bullet point). But of course the front desk is a common element: it is not owned by a individual owner and the Board acknowledges (2nd to last full paragraph, page 1 of the final resolution) that the front desk is used on behalf of all owners, at least 30-40% of the time. Furthermore our Declarations, Section 4, states, “The common elements include: . . . (c) . . . the manager’s unit and office located on the ground floor. . . .”

3. The Board's interpretation of the Rules is dangerous. It would permit this Board – or any future board – at any time, to unilaterally impose fees for use of any amenity by simply declaring that the amenity is disproportionately used by one subset of owners. If the Board is permitted to apportion front desk costs according to who they think is using those services the most (which we deny) then the Board could as easily apportion other expenses, such as the rooftop garden according to who uses it most (e.g., by checking the key-lock logs) or the cost of the elevators according to who uses them the most (e.g., by what floor your unit is on). Perhaps parking lot expenses could be charged to owners based on the occupancy rate of the unit (which could hit residents the hardest). In our view, these fee ideas are not any more absurd than the existing registration fee now imposed by the Board.

The Board's position: From the final Resolution, pages 1-2:

(highlighting added).

RMOG's position: We agree that the Statute is subservient to (“subject to”) the Bylaws. The Bylaws only permit common expenses (defined above) to be charged according to ownership interest. Specifically, Section 9 states, “The total amount of such common expenses . . . shall be assessed against . . . each unit . . . in proportion to the common interest appurtenant to each unit” (emphasis added). There is therefore no room in the Bylaws to assess additional amounts based on usage.