It should come as no surprise that when people of divergent social, political or cultural backgrounds live within reasonably close proximity, and share common property rights and obligations, you will have conflict. Throw in an extensive set of rules and regulations, and a complex body of Civil Code provisions, all of which are enforced by fellow owners, and you have a breeding ground for emotionally charged disputes between community members. Resolving disputes in your community association, however, doesn’t have to be acrimonious. With a well-defined dispute resolution procedure in place, coupled with a consistent approach to rule enforcement, and a desire to govern with fairness and objectivity, you can achieve greater community-wide acceptance of and compliance with the rules governing your association.
Over the past few years, our legislature has enacted statutory procedures intended to steer associations into resolving disputes before resorting to litigation. When employed consistently, these dispute resolution procedures may help to prevent a rule violation from developing into deep rooted community wide dissention or worse yet, escalating into costly, time-consuming litigation.
Effective dispute resolution begins with your governing documents. If use restrictions are vague or not clearly defined, they cannot be effectively enforced; if community rules are not reasonable or understandable, residents will ignore or reject them outright. Thus, it is critical to an effective dispute resolution philosophy that the governing documents be fair, reasonable, relevant and understand-able.
Equally important is how the rules and use restrictions are communicated to the owners. The fact that an association’s governing documents are to be provided to every owner at the time of purchase won’t help build universal acceptance of and compliance with the community’s rules and restrictions. Communication is particularly important to a greater understanding of the rules and their application to the community. Use news-letters or periodic notices to the community residents to remind them of particular use restrictions or rules. For example, a notice about removing holiday decorations at the beginning of the holiday season, or a newsletter column outlining the pool rules at the start of the summer season, would improve awareness of and compliance with the rules.
Underlying any dispute resolution procedure is due process. If it isn’t mandated by your CC&Rs, Civil Code Section 1363(h) requires that whenever a board is to meet to consider and impose discipline on a member, the member must have received written notice of the hearing, including the nature of the violation, and is to be given an opportunity to address the board at the disciplinary hearing. This is the first step of the dispute resolution process.
Because the written notice of violation is a condition to imposing discipline on a member, the notice should be specific about the violation committed. Moreover, the notice should describe: 1) what the member must do to correct the violation; 2) invite the member to a hearing before the board if the violation is not corrected; 3) encourage the owner to correct the violation before the hearing; and 4) warn the owner of the consequences of noncompliance, including the imposition of fines. The board should approach the hearing not with a pre-determined decision but as a fact finder, prepared to listen to the owner and render a fair and impartial decision based upon the information presented at the hearing.
Internal Dispute Resolution (“IDR”) is set forth in Civil Code Section 1363.810 – 1363.850. At the outset, the IDR statute forces associations to focus on dispute resolution by requiring that it adopt “fair, reasonable and expeditious” procedures for resolving disputes. If IDR results in a resolution of the dispute, it binds the parties and is judicially enforceable provided certain statutory requirements are met.
IDR provides an additional layer of dispute resolution that is available to resolve a broad spectrum of community association disputes. While IDR was initially viewed by many as yet another statutory impediment to swift and effective enforcement, over time, boards have come to embrace the opportunity to sit down with their neighbors, one-on-one, and attempt to resolve their differences quickly, effectively, and without cost to either party. When the violation has not been corrected following the disciplinary hearing, or if an owner contests the violation imposed, the association is faced with the choice of whether to file suit to compel an owner’s compliance. Internal Dispute Resolution (“IDR”) provides a second phase of community association dispute resolution before proceeding to Court.
If informal methods of dispute resolution fail to resolve the matter, Alternative Dispute Resolution (“ADR”) contained in Civil Code Sections 1369.510-1369.590, is available. ADR may be used at any time and can take the form of mediation or arbitration. ADR is particularly effective when the parties desire to resolve their dispute but feel a neutral third party is necessary to assist in bringing about a resolution.
ADR also is prerequisite for proceeding with litigation. The statute requires that before owners or an association files a lawsuit for certain types of claims, the parties “endeavor” to submit their dispute to ADR. The ADR statute applies to lawsuits for declaratory and injunctive relief alone, or in connection with certain monetary claims. A significant draw back to ADR is that the parties share the cost of the ADR procedure which can be significant.
Like IDR, ADR must be initiated in writing. The initiating party must serve a Request for Resolution on the other party to the dispute. The Request must include 1) a description of the dispute; 2) a request for ADR; 3) notice to respond to the Request within thirty (30) days or is deemed rejected and; 4) a copy of the actual ADR statute
Of course, before having to resort to association rule enforcement or disciplinary procedures, your association has an opportunity to reduce the tensions that lead to heated homeowner disputes. Review your community’s rules and regulations for rele-vance, clarity and fairness. Look for areas appropriate for revision. Enforcing poorly drafted or obsolete rules make rule enforcement disputes more difficult to resolve. Look for rules that no longer apply to your community, that need to be revised to reflect a change in community interests or values, or rules that are impractical to enforce (such as pet weight limits). These are emotionally charged areas ripe for dispute.
Involve a committee of community members in redrafting rules to make them more understandable and more accepted by the community. Community members are more apt to comply with rules they have had input in.
Finally, the way in which associations conduct rule enforcement hearings can be the difference between a dispute that is effectively resolved in the short term and one that escalates beyond the point of no return. Hearings should be conducted with fairness and objectivity. Owners called to hearings should feel comfortable to express their position without prejudgment. And the outcome of the hearing should be deter-mined only after evaluation of all facts and circumstances presented, and following reasonable and impartial deliberation.
The board should lead by example and set the tone in the community for treating all parties to a dispute with dignity and respect. And when it has been determined that a rule has been violated, the board must act with firm conviction in imposing discipline designed not so much to punish but rather to encourage compliance and to set precedent for handling future rule compliance disputes with other homeowners.