We have written extensively on the virtues of alternative dispute resolution, specifically mediation, to resolve disputes. Litigation is a time-consuming and expensive undertaking, and in the end, both sides are generally unhappy with the result because of the costs and time incurred.
But although we encourage mediation generally, mediation in HOA litigation is a much more complex and difficult undertaking. In this blog post, we will discuss difficulties with mediating HOA disputes.
It is most accurate to think of “mediation” as “assisted negotiation.” In mediation, parties continue to negotiate, but they benefit from the assistance of a third-party mediator. This mediator cannot make any decisions, nor can the mediator bind either party. A good mediator can help the parties get “over the hump” and negotiate a resolution that seemed hopelessly beyond reach.
However, there are certain matters for which an HOA cannot negotiate, and therefore mediation will not be effective. Restrictive covenants comprise a contract relied upon, and enforceable by all of the owners in a community association. Deleting or modifying restrictive covenants requires an amendment that must be approved by a specific percentage of the owners in a community. Consequently, the Board of Directors may lack the authority to modify or waive restrictions through mediation.
The following table highlights some of the issues faced by the Board of Directors for a homeowners association, decreasing the likelihood that an association can reach a mediated resolution.
- Disputes over payment of assessments – Associations have limited ability to compromise the payment of assessments. These assessments are determined by the association’s governing documents. The governing documents probably do not permit the Board of Directors to waive assessments. However, mediation can be a benefit only as it pertains to structuring payment plans.
- Disputes over covenant violations – Again, many violations of the recorded covenants cannot be overlooked or compromised. A Board of Directors does not have the authority to waive restrictive covenants. For example, if the governing documents prohibit livestock and poultry, the Board may not be able to “mediate” away the restriction and permit a homeowner to house a goat.
- Disputes over architectural requirements – Prohibitions on signs, solar panels and clotheslines cannot be mediated by the Board of Directors. If the Board attempted to waive these restrictions, the HOA could find itself involved in additional litigation by another homeowner claiming that the Board lacked the authority to modify or waive the restriction.
- Boundary Line disputes – Sometimes, a homeowner may build a structure that extends into the Common Area owned by an HOA. These boundary line disputes probably cannot be negotiated or mediated, because the Board of Directors has the duty to protect the association’s property rights.
Parties are always well-advised to seek resolution through reasonable discussion and negotiations with your attorney. When that fails, mediation is a viable alternative. However, because of the nature of homeowners associations, Boards of Directors have limited authority to negotiate rights owned in common by all the homeowners.
Have you had success in mediating disputes with HOAs? If so, let us know the circumstances.
Tarley Robinson, PLC, Williamsburg, VA
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