RESOLVING DISPUTES IN A HOMEOWNERS' ASSOCIATION COMMUNITY
During the course of a community’s administration, issues can arise between an individual homeowner and the governing board. The Association, represented by its Board of Directors or Trustees, may believe that the individual homeowner is not acting in accordance with the rules or restrictions set forth in the Association’s governing documents. The individual homeowner may feel that the Association’s Board of Directors has overreached the limit of its authority.
In other cases, a dispute may arise between two neighbors having habits and practices which interfere with the quiet enjoyment of one or perhaps both persons. Regardless of the nature of the disagreement, when these problems arise, it is important for the homeowner to know just what steps can be taken to resolve a Homeowners’ Association related dispute.
When a dispute arises, the Association is obligated by law to provide a fair and efficient procedure for the resolution of housing-related disputes. The New Jersey statute that requires the Association to do so is known as the “Condominium Act” and the particular language for dispute resolution is identified as N.J. Stat. § 46:8B-14(k). This fair and efficient procedure is often known as “alternative dispute resolution.” The homeowner may request that this procedure be provided by the Association’s Board of Directors to resolve his or her dispute. If this request is denied by the Association’s Board of Directors, the aggrieved homeowner may contact the New Jersey Commissioner of Community Affairs. The commissioner has the power to order a homeowners’ association to provide a fair and efficient procedure for the resolution of the dispute.
One form of alternative dispute resolution is known as mediation. Mediation is a voluntary process conducted in an informal setting. The mediator’s role is to listen to the parties’ grievances and facilitate the settlement of the dispute; not to assign blame or judge the respective positions of the parties or make conclusions of law. The homeowner should participate in the mediation only if he or she genuinely believes the dispute is significant, is indeed interested in its resolution and is willing to accept a compromise. For mediation to be a worthwhile effort, both sides need to personally and voluntarily appear. Only if both sides agree to appear can the mediation proceed.
Mediation can take the form of a meeting between the homeowner and the Association’s Board members to discuss a dispute or a meeting between two homeowners where an Association’s Board has selected an impartial person to act as the mediator. This informal attempt at resolution may very well prove to be the most cost effective, and perhaps most common sense, form of seeking a solution.
Mediation may lead to a compromise and the restoration of amicability. Sometimes mediation is unsuccessful, despite sincere efforts. Should an impasse be reached, the parties may agree to a different form of alternative dispute resolution known as an arbitration.
An arbitration is different than a mediation. During arbitration, both sides voluntarily agree to participate knowing that they must each separately explain their positions to a neutral third party who, upon review the Association’s governing documents and relevant by laws and regulations, will make a decision which binds the parties to a resolution. The disputing parties also voluntarily agree in advance to be bound by the arbitrator’s determination. Unlike mediation, which is designed to lead to a compromise, an arbitration can result in a decision which may not please one or perhaps both of the parties. Nevertheless, as the arbitration is binding, the parties have to live with the arbitrator’s decision.
Keep an Open Mind
If approached with an open mind and conducted in a civil manner, alternative dispute resolution can be the most cost-effective way to achieve either a compromise or a resolution. It also leads to a greater and more accurate understanding of an individual homeowner’s rights and responsibilities within a community where resources and amenities are shared. The idea is to achieve a resolution without either party initiating expensive litigation. With this understanding in mind, a homeowner should contact his or her Association’s Board of Directors when a dispute arises, confident in the knowledge that while the outcome of a dispute may not as yet be envisioned, the means by which it can be resolved is readily available.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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