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HOAs and Mediation: Not always a viable alternative to Litigation

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.

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.

John Tarley


 

Tarley Robinson, PLC,  Williamsburg, VA



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John Tarley

John is the firm's managing partner and chairs the firm's small business, zoning, and litigation practice areas.

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