I recently read an article about a Homeowner's Association in Fairfax, Virginia, that has been forced to file for bankruptcy protection because of a legal battle that resulted in legal fees of over $400,000. Nestled within the community was a beautiful community square that was home to beautiful trees and gardens and was the site of many community festivities over the years. Now, that beloved square is destined to be auctioned off to the highest bidder by the bankruptcy trustee in order to pay back some of the massive legal debt amassed by the Association.
Just what was the issued that the Association needed to fight in order to prevent "chaos" (a word actually used by one of the residents when the issue came to light)? A neighbor had the audacity to put an "Obama" sign in their yard when then-senator Obama was running for President in 2008. You see, the sign was bigger than what was allowed under the community's restrictive covenants. After receiving a few rather harshly worded letters from the association that informed the owners of their massive violations, the owners responded by cutting the sign in half and placing two signs in their yard reading "OBA" on one and "MA" on the other. And then the battle began! (read the Washington Post article: http://articles.washingtonpost.com/2013-02-09/local/37008721_1_hoas-covenants-neighborhood).
Unfortunately, these types of disputes are not unusual. Over and over again you hear, "it's the principal of the matter", or "we can't allow it, it will set an unwanted precedent". So I'm on a Mission...to educate Owners, Association Board Members and Community Property Managers that these disputes can very easily be settled through mediation.
First let's talk about what mediation is. Mediation is a form of alternative dispute resolution (commonly referred to as "ADR"). Phrased a bit differently, it is a way to resolve a dispute by different (alternative) methods rather than through the court system. Mediation is a way for the parties to negotiate and settle their disputes. In the mediation world this is called "self determination". The parties involved in the dispute are the only persons who determine the outcome. There are no winners and no losers. In addition, the mediation itself is completely confidential and any resulting settlement can also be required to be confidential. Therefore, no "unwanted precedent".
Now let's talk about what mediation isn't. Mediation is not arbitration. Yes, arbitration is also a form of ADR, but in an arbitration, the arbitrator determines the outcome. The arbitration is like a trial and the arbitrator is like a judge. Arbitration is considered ADR because it is a faster, cheaper and easier way to settle a dispute. However, there are winners and there are losers in arbitration. Moreover, although cheaper than resolving through the courts, arbitration can still be expensive and both parties can still end up spending ten's of thousands of dollars in attorney's fees and arbitrator fees.
Just exactly what kind of disputes can be settled in mediation? In a word, EVERYTHING! Oftentimes I will read the blogs or comments of "authorities" involved in the community association world (attorneys, community association managers, etc.) who point out that while the Florida laws governing homeowner associations (Chapter 720 of the Florida Statutes) do require mediation before a suit is filed (involving disputes between the owner and association), the condominium laws (Chapter 718 of the Florida Statutes) do not require mediation before a suit is filed. True, but that does not mean that mediation can't be requested. Again, this is about "self determination". If the parties resolve the dispute themselves and all agree that the settlement is binding and confidential, then the dispute is settled, end of story.
Yes, I admit, stating that everything can be mediated is a bit over simplistic and actually, not very realistic. In some cases, the dispute is best settled through arbitration. In addition, mediation of association disputes can only be significantly successful if the representative(s) of the association, who are attending the mediation, have full authority to settle the mediation without the need of post-mediation board approval. Remember the mediator is a trained professional who knows how to help the parties understand why a particular offer is in the best interests of all involved and why a settlement should be considered (and hopefully accepted). If a settlement is contingent upon the later, post-mediation approval of one or more parties who did not attend the mediation and who did not have the benefit of listening to the mediator's wisdom, then emotions and misconceptions may creep back into the forefront of the issue, resulting in a non-approval and a failed process.
One more thing, did you know that disputants are nearly twice as likely to comply voluntarily with mediated agreements than with court-imposed judgments? Eighty percent of mediated parties who agreed to perform some obligation for another party had fully complied with the obligation within 6-18 months. Compare that with a 44.5% rate for defendants who had a judgment rendered against them by a court of law. Why the difference? Because mediated agreements are more likely to reflect what the parties want or are willing to accept rather than what a court forces upon them.
So I'm on a mission...Owners, Associations, Community Association Managers (AND Attorneys), please call me, call other mediators, call other associations that have used mediation - this does work!
Visit me at www.alegriamediation.com
