ALTERNATIVE DISPUTE RESOLUTION PROCEDURES COMMONLY USED IN THE SETTLEMENT OF HOMEOWNERS ASSOCIATION DISPUTES

Disputes are a normal part of life within a homeowners’ association, and when parties involved in disputes are unable to resolve them amongst themselves, they need to get other parties involved in the dispute resolution process or take the matter to court.  Court proceedings generally necessitate the assistance of an attorney and by nature, become very time consuming and costly. Frequently, the cost of handling a dispute through the court system far exceeds the economic value of the dispute in question. Additionally, court proceedings often add fuel to the fire and result in compounding the original problem. Thus, it is generally much more desirable for parties who need the assistance of others to resolve a dispute to agree on submitting that dispute to some form of Alternative Dispute Resolution (“ADR”).

The four most popular forms of ADR are:

• Binding Arbitration
• Non-Binding Arbitration
• Mediation
• Conciliation

Binding Arbitration

Binding Arbitration is a type of ADR where parties agree, by contract to submit their dispute to a neutral, arbitrator or arbitrators, who will render a decision that the parties agree to be bound by. In general, the arbitrator is a neutral person chosen by the parties. The arbitrator reads the submission materials supplied by all parties, hears testimony, examines evidence and renders an award (decision) on the case as to liability and damages. Unless otherwise agreed, the decision is generally non- appealable and legally binding.

Non-Binding Arbitration

Non-Binding Arbitration is a type of arbitration in which the arbitrator makes a determination of the rights of the parties to the dispute, but the determination is not binding upon the parties, and no enforceable arbitration award is issued. The “award” is in effect an advisory opinion of the arbitrator’s view of: