California Condoguru ENewsletter -

IDR ... ADR ... ENFORCEMENT -
WHICH COMES FIRST, THE CHICKEN OR THE EGG?

Understanding the Options:

Addressing violations and dispute resolution in homeowner associations is complicated - let's face it. There is a lot of law on the subject. The good news is that boards have statutory guidance for imposing discipline and resolving association disputes. The bad news is that the laws came about because some homeowners had complaints about their board or association, raised claims of a lack of "due process", and had no real recourse that is affordable when battling with their HOA board. Since that was the impetus for these laws, even those boards that were acting reasonably have had to formalize and change some procedures.

So what are you gonna do? When considering whether enforcement, IDR, ADR, either, any, or both are appropriate procedures for any disputes or violations, boards have been to determine whether a violation of or disagreement over responsibilities under the governing documents should first go into the "enforcement category" or into the "dispute resolution" category. If it fits into both, the Board must decide which process to try first. If it fits into the "dispute resolution" category, it has to decide whether to try IDR before ADR. The intent of this E-News, and also an article recently posted on the website - is to try and help boards and members make some sense of all of this.

Breaking the Code:

"Enforcement" of the rules and CC&Rs is a duty imposed on boards. If the CC&Rs or rules contain a restriction such as a prohibition on parking a recreational vehicle in the development, and someone is violating the rule, the board must seek compliance ("enforce"). One can ask the owner to comply. Sometimes that does not work. So a board can resort to threats of fines or other disciplinary action. This would require a hearing. Hearings are more commonly associated with enforcement (and the word force explains the mindset) than dispute resolution.

Dispute Resolution Options Are For The Most Part "Choices". So How Do You Choose?

ADR stands for "alternative dispute resolution". That suggests a means of resolution of disputes "alternative" to litigation. ADR has been around longer and is a more generally understood process than IDR. ADR methods generally include conciliation, mediation, or arbitration. Conciliation and mediation involve a neutral facilitator and resolution is by voluntary agreement. Arbitration is like court, a hearing officer makes a decision.

IDR is a newer concept commonly referred to as "internal dispute resolution". This means an "internal process", whereby the board or one or more directors meet with an owner who is in "dispute" with the association, or vice versa (association is in dispute with owner), or in an attempt to enforce the governing documents. It may also relate to something like an election dispute, an argument over property lines or actions of the board, or the like. And, the association can provide a neutral facilitator, or not.

If the Association is considering litigation against an owner, both IDR and ADR processes may have to be completed. The board must participate in IDR if an owner requests it, and must seek to engage the owner in ADR before litigation can be filed unless an exception applies including urgency or other considerations. If an Owner is considering litigation against the Association, he or she is required to follow the ADR statutes to offer the board ADR but the IDR process is voluntary.

WHAT ARE THE KEY FACTORS?

California law contains statutes dictating requirements for all three processes.

These statutes are many and complicated, but they need to be understood and honored.

ONE KEY to success and the quandary for boards is putting together a policy that satisfies the requirements of the law, satisfies the enforcement requirements of the governing documents, and provides a process that can reasonably be applied.

ANOTHER KEY to success is giving serious consideration to what option may be the best and most likely to solve the differences of opinion or the violation with the least energy and cost.

ANOTHER KEY to success is - in the policy making process - to chart a course, a "roadmap" (written policy) to go by. This will prevent considerable confusion as to how to handle each particular matter, and in what order. And this will be there for future boards too.

AND LAST BUT NOT LEAST! IDR May Be The Best Kept "Secret"!

I believe that a board and management can head off a lot of potential disastrous efforts in most cases by starting with IDR rather than threatening letters or a hearing. I also believe that few boards think that way. Maybe it's time to shake things up. I recently had a colleague, a well known and well respected attorney who advises associations and also engages in litigation for them, say to me: "I am surprised IDR seems to work so well when boards of associations I represent are willing to try it."

That sent me into action. I realized that I do not often get a chance to recommend IDR to clients before they get deeply engrained in a fight. And whether its a board or an owner, there is often a lot of water under the bridge and it is apparent that a facilitator is needed if the parties are going to get together to seek a mutual resolution. I know IDR has a very good chance of resolving things, if it happens before the parties are completely polarized. Even my attorney friend said: "It's amazing, people really do just want to be heard." I was glad to hear another attorney agree!

IDR isn't rocket science. It just takes one or a few (I recommend two or more) board members that have authority to speak with members who are in or have disputes to try and resolve them, for starters. The whole board does not have to be present. You do not even have to get fancy about it (although the board should set some parameters and limitations in some areas for an IDR Committee). Your IDR policy might say: "IDR meetings are available for resolving association disputes or meeting with owners to enforce the rules and regulations and this is how to apply:____________..."

Without a lot of inconvenience or "hullabaloo", the board could appoint some board members that are willing to volunteer to do IDR meetings, could give them some structure, and could set the times and places convenient to these directors. A rather convenient time might be the same night as board meetings. IDR meetings could be set before or after (earlier is preferable with a specified time limit) the meeting. 15 or 20 minutes or in some cases a half hour is all that is needed. Authority might be as broad as authority to meet and discuss options for resolution, and to agree to any terms that do not violate the rule or CC&Rs or Bylaws, with the option to bring a recommendation to the board for consideration if the IDR directors think it wise.

I would be willing to bet that any association putting IDR before threatening letters and making the offer to owners to meet and confer with a few or all board members for 15-20 minutes to discuss the "problem" (dispute, violation, disagreement, etc.) before things escalate to hard feelings would realize benefit right away. Why?

I get a lot of emails and calls from owners because of my website. The #1 complaint of unhappy homeowners is that the board sent "nasty" letters or turned against them instead of talking to them. When enough has happened to turn an owner against a board, or to frustrate a board thoroughly because of ineffective communications, things can get ugly. Boards, even if you think you are playing nice, or fair, or giving people plenty of warnings (perhaps more than they deserve), the tide can be turned of any unhappy or "uneducated" (meaning they do not pay attention to or understand the rules) homeowner by a simple face to face meeting And if that doesn't work, you can always followup with aggressive actions if you feel that is necessary.

If you want to know more about "Breaking the Code" or "Making Enforcement as Painless as Possible", be sure to attend one of the upcoming seminars at which I am speaking. There are currently two choices: March 27 in Fresno, California, for Community Associations Institute/CAI (contact http://www.caibaycen.com/) or May 1 in Goleta for the South Coast Homeowners Association group, contact Mike Gartzke at gartzke@cox.net) If you can't make one of these seminars, AND For more on this and other enforcement questions - check out the free articles and FYIs, and see the Enforcement Primers available on the Condoguru website.

There is a series of 5 (they are $25 each). They include ENF-1 Basic Enforcement, ENF-2 Intermediate Enforcement, ENF-3 Parking and Towing, ENF-4 Difficult Neighbor to Neighbor and Nuisance Matters and ENF-FORMS which includes forms for setting policy, proposed letters to violators and sample policies related to enforcement, including a sample Fines policy which is required to impose fines on any member in a California HOA or Condo Association. Go to "Publications". If you purchase 4 Primers, you can get a fifth one free! Just place the order and then email me and tell me the name of the Primer you want for free.