Weinberger Law

HOAs should embrace mediation

Even though many Homeowner’s Associations have agreements that require mediation to resolve disputes with homeowners, it’s a move they should also embrace in disputes involving contractors, subcontractors and others with whom they might find themselves in litigation.

The reason is simple: Engaging in mediation costs less than a prolonged lawsuit.

How mediation works

Mediation starts with a dispute. The dispute can be over anything – payments or unfinished construction problems with contractors, fees or dog complaints with homeowners.

The parties pick a neutral person who is knowledgeable about the subject to act as mediator. The mediator spends time with each party to understand their positions then tries to communicate each side’s position to the other.

Although the mediator can come up with a recommendation to solve the dispute, he or she holds no decision-making authority so it’s up to the parties to accept or reject the proposal.

If the parties did a good job choosing a mediator, they can accept the mediator’s judgement even if they only agree with part of it. The alternative is taking the other party to court where a lawsuit could last years, cost hundreds of thousands of dollars and might not result in a favorable verdict.

Many CCRs have mandatory mediation clauses

Most HOA covenant, condition and restriction (CC&R) agreements have a requirement to use a mediator to resolve disputes. Some CC&Rs also contain internal dispute resolution (IDR) clauses that requires a meeting between homeowners and the association before the issue goes to mediation. The purpose of these meetings is to get the parties talking to work through their disputes rather than resorting to mediation or lawsuits.

It’s also important to remember that since mediation is meant to guide disputes away from the courts, a judge could take one party’s unreasonable refusal of mediation into account when determining who should pay attorney’s fees.

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