The past decades have seen an explosion of community associations in the United States. It’s estimated that more than 50 million Americans now live in homes that are part of a community association, and that four out of every five new housing starts will be part of a community association. It’s no wonder that many people find themselves with some sort of community association dispute.
In the community association setting, most disputes involve a high level of emotion from some, if not all, of the parties. The community association should be operated as a business, but one that is deeply personal to the members of the association because it involves their homes and their relationships with neighbors.
In attempting to resolve disputes among association members, it is important for each individual member to assess his/her personal goals with regard to both the dispute in question and the community in order to identify the dispute resolution process, professional advisor, and forum appropriate for resolving the issue.
CAI’s Alternative Dispute Resolution
Community Association Institute (CAI) recognizes the need for and supports the use of alternative dispute resolution mechanisms. CAI’s Alternative Dispute Resolution (ADR) Policy statement encourages settling arguments and disagreements outside of the traditional courtroom setting.
There are several different procedures that fall under the definition of ADR, from mediation to court-mandated binding arbitration. Many associations have embraced ADR because it gives both parties involved a method for resolving the dispute without going to the expense, angst and time of litigation. Plus, it is respected by both state legislatures and courts.
State Community Association Laws
In many states, community association statutes establish mechanisms to handle conflicts between community associations and property owners. For example, states may require that before a community association files a lawsuit for issues other than assessment collections, it must provide the homeowner with proper and timely notice. The notice must:
- Describe the violation or property damage that is the basis for the suspension unless the owner was given notice and a reasonable opportunity to cure a similar violation within the preceding six months; and,
- Inform the owner that he/she
- Is entitled to a reasonable period to cure the violation and avoid a fine or suspension unless the owner was given notice and a reasonable opportunity cure a similar violation within the preceding six months; and
- May request a hearing under on or before the 30th day after the date the owner receives the notice
Community Association Alternative Dispute Resolution
Community association Alternative Dispute Resolution is composed of many components such as negotiation, facilitation, mediation conciliation, arbitration, ombudsman, paralegal and litigation.
- Negotiation and Facilitation: community association disputes are resolved with the help of a professional negotiator. Parties talk and work out their conflict differences. A community association mediator intervenes as a facilitator to help exchange information and clarify facts.
- Mediation and Conciliation: When community association disputes cannot be resolved in discussion, parties can engage in mediation. Community association mediation involves trained mediators. The mediator’s goal is to amicably resolve community association conflict through voluntary efforts. When voluntary dispute resolution is not forthcoming, the community association mediator utilizes his or her experience and expertise to suggest possible settlement outcomes.
- Arbitration: A dispute resolution process that is more adversarial than mediation. In community association arbitration, after each side (owner and community association) presents relevant evidence, the neutral arbitrator renders a decision called an Arbitration Award.
- Litigation: When mediation, conciliation and arbitration do not provide dispute resolution, traditional court litigation is the best action especially when punitive damages are sought. Lawsuits can take months to schedule and often drag out for years before resolution is reached. Besides monetary cost of court fees and attorney expenses, there is stress in personal relationships and in personal health. A lawsuit is an ultimate dispute resolution for individuals who feel they have been wronged. If you are considering filing a lawsuit, it is essential you consult with an attorney to review the legal case and establish if a lawsuit is feasible.
Disputes between community associations and property owners are an option of last resort, but they will occur. By employing the appropriate dispute resolution approach, both parties have the opportunity to be heard and, hopefully, can find a mutually acceptable middle ground.
Linda A. Bartel, AMS®, LSM®, PCAM®
Senior Vice President
Principal Management Group of Houston