3 Ways to Resolve HOA Disputes and Community Conflicts
While all HOA board members desire a peaceful, conflict-free community, disputes happen. And when conflicts arise, it’s important to arm yourself with the knowledge to confront them productively and professionally.
In some cases, conflict can be avoided altogether by utilizing best practices in your association. Work with your Nevada community association management company to get trained on best practices that are aligned with your association's needs. By familiarizing yourself with common pitfalls and issues, you’ll know how to prevent some issues before they start. To learn more, read our article, Avoid These 5 HOA Board Blunders.
In other cases, you may be able to resolve conflict quickly by taking a calm, empathetic and conversational approach. But the last thing anyone wants is costly, time-intensive and stressful litigation. That’s why it’s important for board members to know the 3 types of alternative dispute resolution (ADR): the Referee Program, mediation and arbitration.
It’s also important to note that before any civil action can be taken regarding a dispute about a homeowners association’s governing documents, each party must complete the Alternative Dispute Resolution (ADR) process under Nevada Revised Statues (NRS) 38.
Additionally, if you have any kind of dispute, look to an HOA property management company for guidance. If legal action appears to be on the horizon, consult your association's attorney. And before things get that far, consider these methods of HOA conflict resolution.
The Referee Program
As part of Nevada Revised Statues (NRS) 38, the Referee Program is an approach to resolution where disputing parties present their case to an independent referee. Both parties must agree to participate in order to proceed. The referee listens to both sides of the dispute, reviews the evidence and governing documents and then makes a non-binding decision on the matter. A referee can then award parties up to $7,500, but they may not award attorney fees. If the parties decide that they still want to pursue the matter, they can go to civil court.
In Nevada, mediation is the default if both parties in a conflict choose to forego the Referee Program. In many cases, parties in a conflict typically choose mediation because it’s cost-effective and non-adversarial. A mediator is present and acts as a neutral third-party, working with both sides to sort through the issue and come to a resolution. The mediator doesn’t choose sides (since they are not a judge); rather, they help both parties come to an agreement that everyone deems as fair. Of course, you do not have to accept a mediation decision, and either party can leave the mediation at any time. If both parties agree to a mediated solution, then they will sign an agreement at the end of the process. Please note that if you cannot reach an agreement through mediation (and do not want to go through arbitration), then you can go straight to court; you do not have to arbitrate.
Unlike mediation, arbitration is an adversarial method of ADR. Essentially, arbitration is a less formal version of a courtroom trial. One or more arbitrators facilitate the process by working as a private judge. Both sides are represented by attorneys, and similar to a trial, the arbitrator makes a decision after reviewing evidence, hearing testimony from witnesses and looking at relevant documentation. A decision may be binding or non-binding, depending on the type of arbitration agreed upon in advance. If non-binding, a decision is viewed as a professional opinion of the prospective outcome in a potential trial. On the other hand, a binding decision cannot be petitioned and both parties must comply with it.
If All Else Fails…
If the conflict cannot be resolved through one of these processes, the next step is a trial in court. As expected, this process involves judges, juries and attorneys as well as expenses in terms of fees and time. That’s why it’s especially important to talk to your association’s attorney about conflicts that arise so that you can immediately determine the best course of action to take. And it goes without saying that one of the most effective ways to avoid conflict is adopting best practices so that you can avoid it before it starts. An excellent community management company will be able to direct you to resources that are attuned to your community’s unique needs.
For best practices on how to avoid conflict over email, download a free guide, 7 HOA Email Blunders to Avoid.