Every community should have an HOA dispute resolution process in place. A dispute resolution process allows board members to professionally settle arguments in the community without needing to resort to litigation. Some HOA boards, though, don’t know where to begin when it comes to handling disputes. Thus, it is important for boards to familiarize themselves with the basics of dispute resolution.
The Need for HOA Dispute Resolution
Disputes are bound to happen wherever there is a large group of people. Disputes are a common part of operations, from company executives and employees to government officials. Homeowners associations are no exception.
It is normal for people living in HOA communities to have disagreements — or even arguments — about various matters. While these HOA disputes mostly resolve on their own or are settled in an amicable manner, some can grow out of hand. For the betterment of the community, it is best not to let these disputes turn heated and boil over into a full lawsuit.
This is where HOA dispute resolution comes in. Dispute resolution is a process by which disagreements or conflicts are settled without taking the case to a court of law. Some people quickly jump to legal action when something doesn’t go their way. To minimize the number of homeowners association disputes that go to court, many states even require HOAs to go through dispute resolution before filing a lawsuit.
What Is an HOA Board Resolution?
While the two terms may sound alike, dispute resolution and board resolutions are different. An HOA board resolution is an official statement from the board regarding policies, procedures, and decisions. Meanwhile, dispute resolution refers to the process of settling disagreements or conflicts within the association.
Types of Homeowners Association Dispute
In an HOA community, disputes can take many forms. There are HOA disputes between neighbors and between two homeowners or residents. In this case, the board will have to weigh whether or not it should get involved. Not all neighbor-to-neighbor disputes require board intervention.
Sometimes, the board will have a dispute among themselves. For a seasoned board, settling such disputes will be easy. Other times, the dispute occurs between the board and a homeowner. For example, if you’re a homeowner, you may not know what to do when HOA denies your request. This dissatisfaction could intensify over time, leading to a dispute.
Although disputes are normal, an HOA board should not leave them unaddressed. If a dispute does not resolve itself, proper dispute resolution should occur to maintain peace and harmony in the community. After all, nobody wants to live in an HOA that’s full of hostility.
Establishing an HOA Internal Dispute Resolution Procedure
It is essential for homeowners associations to enact a policy for dispute resolution. Resolving disputes internally can help limit lawsuits and establishes the HOA’s commitment to keeping the peace in the community.
But how can HOA resolve disputes? What is the process of resolution of disputes?
First, members should check the association’s governing documents. The CC&Rs, bylaws, and operating rules should contain the HOA dispute resolution policy. Boards should check state laws, as they might also provide guidelines and requirements for internal dispute resolution.
Resolution procedures can vary. In some communities, it can begin with an informal homeowner and board member meeting. Sometimes, discussing the issue can help the parties reach an amicable solution.
This approach, though, will only bear fruit if both parties maintain a rational and professional mindset. When either party lets emotion take over, an internal or informal resolution procedure rarely works.
Here are some tips to successfully resolve disputes internally.
1. Get Proper Training
It is a good idea for board members and managers to go through mediation training. In doing so, they can equip themselves with the right strategies and knowledge to resolve conflicts within the community. Mediation training also helps board members reach a win-win situation in most disputes.
2. Communicate Clearly and With Reason
Many disputes spiral out of control due to a lack of proper communication. Board members should encourage parties to communicate with a clear mind and barring emotion. Moreover, some messages can get lost along the way due to misinterpretations or miscommunication. Thus, it is important to keep things concise and communicate often.
3. Don’t Rely on Hearsay
When a dispute arises, board members should confront the parties involved directly. Never trust rumors, gossip, or hearsay. It is best to get all information straight from the horse’s mouth. That way, board members can make informed decisions.
HOA Alternative Dispute Resolution
If internal dispute resolution fails, associations should turn to alternative dispute resolution (ADR) next. An HOA that does not have an internal process in place would also benefit from using ADR.
ADR lets board members and homeowners settle issues with the help of a third-party neutral. Like internal dispute resolution, ADR allows the HOA and its members to avoid going through lawsuits, which can be very expensive and time-consuming.
In many states, ADR is even mandatory. For instance, California Civil Code Section 5930 requires the association or member to partake in ADR prior to taking legal action, though it does not apply to all cases. If your state does not require it, consider amending your governing documents to require ADR before litigation. Engaging in dispute resolution is often in the best interest of the parties and the association.
Here’s how to handle HOA disputes using ADR.
Mediation
Mediation is an alternative dispute resolution process that involves having a mediator listen to both parties of the dispute. The mediator then assists the parties in searching for a middle ground. The primary goal is to reach a resolution that both parties agree to.
Keep in mind that mediation is a voluntary procedure. No single party can force the other to agree to a resolution. In mediation, both parties must reach a resolution collectively and in agreement.
Arbitration
Arbitration is another form of alternative dispute resolution. This process involves an arbitrator who also listens to both parties of the dispute and reviews the evidence. However, in arbitration, the third-party neutral makes the decision for the parties.
Before arbitration, the parties must consent to follow the arbitrator’s decision. The decision is usually final. After arbitration, neither party can take the dispute to court if they disagree with the final decision.
A Key Component of HOA Management
HOA dispute resolution comes in handy when conflicts arise within the community. While the board does not need to get involved in every dispute, an internal and alternative dispute resolution process is necessary to minimize litigation incidents and maintain peace in the association.
Elite Management Services provides exceptional HOA management services to communities, including help with dispute resolution. Call us today at (855) 238-8488 or contact us online to learn more!
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