ADR 101 for HOAs Using Alternative Dispute Resolution

Turn on daytime television and you might get a false impression that people like to go before a judge to work out their differences. There are so many cookie-cutter court shows like where they make the process look simple and quick. The truth is, however, that going to court is expensive, often very time-consuming, and more complicated than it appears on television (although to be fair, those who air out their differences on the tube usually get a stipend.) Filing a lawsuit in the context of a condo association is also a recipe for acrimony between neighbors, board members, and management, and should really be considered as the last resort in problem solving.

Arbitration vs. Mediation

Even in the most harmonious of associations, problems can arise, either between neighbors, between residents and board, or resident-versus-management.

“Owner-versus-board is the most common ADR dynamic,” says Philip Alampi of TAP Property Management in Glen Ridge. “It happens because in the late 1980s, many of the condominium complexes in New Jersey were being built so quickly that attorneys were using documents [for new developments] that other attorneys had used for other developments without really understanding the project that was being built. Because they used boilerplate information, sometimes the information was not as exact as it could or should have been—and that left many things open to interpretation.”

Those loopholes and vagaries can make for rough waters when one person (a board member perhaps) interprets a rule differently than a resident owner, and argument ensues. Fortunately, arbitration and mediation can help settle disputes while avoiding the courtroom entirely.

What’s the difference, you ask? The American Arbitration Association (AAA) differentiates between the two like this on their website (www.adr.org): “Arbitration is the submission of a dispute to one or more impartial persons (known as ‘neutrals’) for a final and binding decision, known as an ‘award.’ Awards are made in writing and are generally final and binding on the parties in the case. Mediation, on the other hand, is a process in which an impartial third party facilitates communication and negotiation and promotes voluntary decision-making by the parties to the dispute.”

Read More...

Related Articles

Handling Conflict Between Neighbors

How to Manage Amicably

Alternative Dispute Resolution

What to Do When They Sue – Part II

When You Don’t Want to Go to Court

Resolving Construction & Contractor Issues

 

5 Comments

  • My complaint is against the board and the incompetent property manager and his predatory fines policy. How do I select a mediator who is not a friend or business crony of the manager? I would not trust his choice. The outcome would be biased in his favor.
  • Do you know of any entity in NJ that trains people for mediation and ADR?
  • When the Homeowner's complaint is NOT with a neighbor, and is a complaint about the aesthetics of a common area, does he/she have a reason to initiate the ADR ? If this issue involves the HOA expanding the bylaws to accommodate a financial need of the Homeowner, does the HOA have to submit to the ADR process? In short . . what is a reasonable criteria for initiation of the ADR (which requires cost) to the HOA?
  • Our board used arbitration to settle a dispute between some owners not in the rental program being charged for the maintenance of common elements, while those in the rental program pay less for the maintenance of the common elements. The ruling was in favor of the board. The resulting consequence is that the owners not in the rental program pay much more for maintenance of the common area than those who participate in the rental program. Our condo docs clearly state that all owners pay equally for the maintenance of the common area. Can the arbitration ruling supersede the condo docs? This all came about because of the property manager/rental agent co-mingles the funds of the Association with those of the Rental Program, claiming operating this way saves the Association money. The only way It saves the Association money is by taking extra fees for the common element maintenance from those not in the rental program.
  • Brooke Stoppiello-Nevins on Wednesday, January 6, 2021 1:27 PM
    Hello, just came across this and I saw it mentioned that CAI-NJ, my company, offers ADR-Mediation to both members and non-members. Thank you very much for promoting our service! I just wanted to let you know that as of 2017, this service is no longer offered to non-members. The association must be a CAI-NJ member in good standing with at least three (3) board members registered in order to utilize our service. The service fee for two (2) hours of ADR-Mediation is now $300 and if you are not a member, the yearly fee for the 3-15 board membership is $295. If you should have any additional questions feel free to email our office at info@cainj.org. Thank you!