HOA dispute resolution: What you need to know

What is an HOA dispute?

An HOA dispute occurs when a homeowner, board member, or third party disagrees with an association’s policies, decisions, or enforcement actions. These disputes can arise from misunderstandings, contractual disagreements, or concerns about fairness and compliance with governing documents.

In Nevada, HOAs may operate under state laws like Nevada Revised Statutes (NRS) Chapter 116, which establishes guidelines for association governance and conflict resolution. When a dispute arises, it is typically addressed at the community level first, often through board meetings, discussions with management, or internal resolution processes. If an agreement cannot be reached, the dispute may escalate to mediation, arbitration, or legal proceedings.

It’s important to recognize that not all disagreements require formal intervention. Many issues can be resolved through communication, education, and proactive management. For this reason, professional property management companies like FirstService Residential work closely with HOA boards to provide expert guidance, helping communities navigate disputes effectively and equitably.

This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

HOA dispute examples

While each community has unique challenges, certain types of disputes are more common in HOAs. Here are a few situations that may lead to HOA disputes:

1. Architectural modifications

   One of the most common sources of HOA disputes is property modifications. Homeowners may want to change the exterior of their property — installing solar panels, painting their home a new color, or adding a fence. If these modifications do not comply with the association’s architectural guidelines, the HOA may require changes or removal.
    

2. Landscaping and maintenance responsibilities

   Nevada’s desert climate makes landscaping a key issue for many HOAs. Disagreements can arise when a homeowner does not maintain their yard according to community standards, leading to concerns about property values. Conversely, if an HOA enforces a rule that seems inconsistent or overly strict, homeowners may challenge it.
    

3. HOA fees and special assessments

   Financial matters are another major source of conflict. Homeowners may question an increase in dues, a special assessment, or how funds are being used.
   
   While HOAs have the authority to collect fees for maintenance and services, they must also operate transparently. If a board raises fees unexpectedly or without clear communication, homeowners may push back. Nevada law requires HOAs to provide financial disclosures, and disputes often arise when members feel they have not received adequate information.
    

4. Parking and vehicle restrictions

   Parking policies frequently lead to disagreements in Nevada communities, especially in areas with limited on-street parking. HOAs may be able to enforce rules on guest parking, commercial vehicles, or RVs, leading to frustration among residents. In some cases, Nevada law provides avenues for residents to challenge overly restrictive parking policies.
    

5. Short-term rentals (STRs) and lease restrictions

   With platforms like Airbnb and Vrbo growing in popularity, many Nevada HOAs have implemented short-term rental restrictions to maintain community stability. However, these policies are sometimes met with resistance from homeowners who want the freedom to rent out their property. If a community's governing documents restrict STRs, but a homeowner disagrees, the dispute may need to be resolved through board meetings or legal channels.
   
   In some cases, conflict can be avoided altogether by utilizing best practices in your association. Work with your Nevada property 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.

How to resolve an HOA dispute

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 Statutes (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 Statutes (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.
 

Mediation

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 generally go straight to court.
 

Arbitration

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 may be 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.
 

Legal action as a last resort

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.

If your community is looking for professional property management solutions to help streamline operations and improve resident relations, contact FirstService Residential today. Our team is here to support your board with expert guidance, tailored solutions, and a commitment to exceptional service.