Compromise Your Way Through Conflict

In this day and age, it can seem like compromise is a dirty word indicating a failure to stand by one’s position.  In the community association context, however, compromise is often the key difference between warring neighbors and a peaceful neighborhood.  Knowing when and how to compromise on disputes between homeowners and community associations is a great way for boards of directors to avoid prolonged disputes and costly litigation.  This article will briefly examine how an association’s governing documents can provide a helpful framework for reaching a compromise with an owner.

There are a number of different governing document provisions used to encourage or require compromise when an owner has an issue with their association.  They are often referred to as Alternative Dispute Resolution provisions (“ADR provisions”), and Georgia courts generally uphold their use and enforceability in a community association’s covenants.  Below are a few types commonly found in community governing documents:

Violation Hearing Requirements

One of the most common dispute resolution provisions, many community associations are required to give an owner the option of meeting with the board of directors to discuss an alleged violation prior to the imposition of fines or suspension of amenity use.  These hearings can often be seen as a waste of time when the violation is obvious, but keep in mind they serve the purpose of giving the owner a forum to “vent” their frustrations and also make the association look reasonable in the eyes of a judge or jury if the issue goes to trial.  Owners typically must request a hearing in writing and, at the hearing, can present evidence and witness testimony.  

Good Faith Communication Requirements

This type of provision can come in many forms, but generally requires that, prior to filing a lawsuit, an owner provide the community association with a written communication setting out the allegations or defenses the owner believes they have in a good faith effort to avoid litigation.  While it is easy to look at this step as just a box to check, keep in mind that this written notice can be a great place to start negotiations if the owner is not being unreasonable.  In addition, such provisions often require the owner to allow for an association response prior to filing suit, which buys the association some time and allows both sides a moment to “cool off” before spending further money on the dispute.

Mediation Requirements

Some covenants require an owner and the association to undergo mediation prior to filing suit.  Mediation is a non-binding process where sides present their positions on the conflict to a third-party mediator who attempts to negotiate a compromise between the parties.  Even though mediations are technically non-binding, if a compromise is reached the parties can create a written agreement that makes the result binding.  Even if the mediation is not successful, arguing the association’s position in front of a non-biased person can provide a good indicator on how a judge or jury might view the association’s case and whether or not the association appears to be acting reasonably to someone who is not a member of the community.

Arbitration Requirements

An arbitration clause is probably the least common ADR provision found in community association governing documents.  Arbitration requires both sides in a dispute to present their arguments to a third-party arbitrator who then makes a decision to resolve the dispute that is binding on both parties.  In short, arbitration is like a private trial that takes place outside of the courtroom.  Arbitration can provide a good forum for resolving community association disputes since the arbitrator can be chosen based on their expertise in the area.  However, given that the cost ends up being similar to an actual trial, an arbitration is not necessarily a good option if compromise is the goal.

If a community association’s governing documents lacks an ADR provision, the board may propose adding one to the covenants through an amendment adopted by the members.  If the board is unsure of which type of provision would work best in their community, the directors may be able to create a framework for compromise requesting that owners follow certain notice procedures prior to filing suit against a community association through a board resolution.  While this type of resolution may not be binding, simply by creating a framework for dispute resolution a board is showing the neighborhood that the association truly desires to pursue dispute resolution outside of the courtroom.  In either event, the board of directors should consult the association’s attorney to determine the steps the community association needs to take in order to adopt the ADR provision.

The bottom line is that disputes between owners and their community association can be costly, are often stressful for volunteer board members, and can create levels of neighborhood disharmony that are impossible to ignore.  Resolving disputes through ADR provisions may not result in a community association getting everything the board wants every time, but if a board views ADR provisions as a good chance to find compromise, using these alternative dispute procedures will reflect well on the association and could save a community money and ill-will in the long run.