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How to Use IDR and ADR to Resolve Neighbor-to-Neighbor Disputes

BY: A.J. JAHANIAN, ESQ., BEAUMONT TASHJIAN

When living in a homeowner’s association, conflicts are bound to happen. Whether conflicts are between homeowners or between homeowners and members of the Board, resolution will be required in order to maintain good relations within the community. While some conflicts will warrant initiating litigation, others can be resolved much quicker and without great expense through either internal dispute resolution (IDR) or alternative dispute resolution (ADR). Both carry different procedures and requirements, and can both be effective tools to curb smaller conflicts before they escalate into bigger problems.

IDR

IDR is used when an association wishes to resolve a conflict internally in an informal process between its representatives and those of the adverse party. An association can also facilitate IDR between two adverse parties and act like a third party neutral that seeks to diffuse the conflict for everyone’s benefit. California Civil Code section 5910, part of the Davis Sterling Act, governs the requirements for IDR in associations. Such requirements include providing for a fair, reasonable, and expeditious dispute resolution procedure that allows both sides to explain their positions, a member’s right to invoke such procedure and compel an association’s participation in same, and for the procedure to have prompt deadlines both an association and its members must follow. It is important to note if an association requests IDR, a member can refuse to participate without any repercussions. Also, a member who participates in IDR cannot be charged a fee to do so. Additionally, should a resolution be reached in the IDR proceedings, when it becomes a signed writing by all parties, it shall be judicially enforceable.

Associations have great latitude to determine their IDR policies and procedures, so long as it conforms with the Civil Code’s requirements. Associations should encourage IDR in smaller conflicts that don’t implicate their larger communities, such as neighborto-neighbor disputes. Since these types of conflicts are typically not of great urgency for associations to directly intervene in, IDR procedures can be used to bring disputing neighbors together to discuss and resolve their conflicts as an alternative to a board initiating disciplinary proceedings against the disputing neighbors. By using IDR to resolve neighbor-to-neighbor disputes, associations can more expediently resolve these conflicts and save an association money from avoiding costs in pursuing disciplinary and/or legal action against conflicting neighbors.

ADR

ADR is another process an association can use to resolve a conflict, but instead of relying on participants to cooperatively resolve their conflicts voluntarily, ADR involves a third party neutral that assists the parties in resolving their conflicts. ADR takes on different forms, including mediation, arbitration, conciliation, or another nonjudicial procedure. The two most popular forms of ADR are mediation and arbitration. Mediation is when a third party neutral helps guide the parties towards a resolution they create while arbitration involves a third party neutral who hears both sides and then makes a determination on how the conflict should be resolved.

California Civil Code section 5930 governs the procedures associations must take when initiating and participating in ADR. The requirements are more stringent than IDR since ADR is a more formal process that involves cost sharing between the participating parties. The first requirement under the Civil Code is that members and associations must participate in ADR before filing enforcement actions against one another in the superior court. This requirement does not apply to small claims court actions, assessment disputes, and claims for monetary damages in excess of the jurisdictional limits stated in Civil Code sections 116.220 and 116.221.

Upon initiating ADR, there are procedures that must be followed. This includes serving a request for resolution to the party who is being requested to participate in ADR. Unlike IDR, an association is not required to accept a member’s request for resolution to participate in ADR, meaning any party that receives a request for resolution does not need to accept it.

Upon receiving a request for resolution, a party has 30 days to accept the request. Should more than 30 days lapse without an acceptance, that request for resolution is deemed rejected, and ADR will not proceed. However, should a party accept the request for resolution, the parties have 90 days to complete ADR, whether it be mediation, arbitration, or any other process. Allowing this 90-day window gives the parties time to fully consider their claims and reflect on how the overarching conflict can be resolved. Like IDR, ADR can too be an effective tool to resolve neighbor-to-neighbor disputes, as those who feel they have a say in the resolution proceedings will usually be more likely to cooperate and want to resolve the conflict. It is important to remember that the parties to ADR are to split the costs of such evenly in a usual arrangement, which gives the parties more of a stake in the efforts to resolve the conflicts because if they do not come to a resolution, they will have wasted time and resources with nothing to show for it. Another point to keep in mind is that any time spent in ADR, which includes both the timeframes to complete ADR and accept ADR, are tolled periods, meaning the statute of limitations will not run on any claims that arise from the ADR proceedings during these two timeframes. This preserves the parties’ right to pursue such claims in litigation should ADR fail.

IDR or ADR?

Both IDR and ADR can offer needed resolution to large and small conflicts in an association. Because IDR is a more informal process that usually does not involve outside parties, it is more suited towards smaller conflicts that can be easily resolved without extensive fact finding and adjudication of claims. Many neighbor-to-neighbor disputes fall under this category of conflicts, and those involved in these disputes should be encouraged to pursue IDR with the association’s board and/or management to resolve these disputes.

ADR requires more time and some expenses, so it should be used more sparingly. ADR should be reserved for neighbor-to-neighbor disputes that cannot be resolved through IDR and are disruptive to an association’s larger community. These disputes will likely require third party intervention, which is where ADR can come into play. Associations should initiate ADR proceedings when these types of neighbor-to-neighbor disputes arise. By pursuing ADR in this context over litigation, the conflict can be resolved much faster and with significantly less expense.

Associations should consider what IDR and ADR will entail when it comes to conflict resolution and weigh the benefits versus costs of employing these dispute resolution processes. Associations should seek advice from legal counsel before commencing any dispute resolution action against homeowners.

This article, including all of its written contents, does not constitute legal advice nor does this article establish an attorney client relationship between the reader and the article’s author.

A.J. Jahanian, Esq. is an associate attorney with Beaumont Tashjian who devotes his career to serving common interest developments. He can be reached at ajahanian@ HOAattorneys.com