People involved in a conflict often know they are wrong but don’t want to admit they made a mistake. They continue the conflict just to avoid the embarrassment of looking bad. This face saving is often more important than the issue that began the fight in the first place.

From time to time, disputes arise between HOA members or between a member and the HOA. If left unchecked, these disputes can escalate into dueling lawyers duking it out in a pitched courtroom battle. However, there is never a satisfactory end to this war. The time, emotional and financial cost of legal jousting is tremendous.

Judges are rarely schooled in how homeowner associations work so the verdicts are highly unpredictable. Both defendant and plaintiff are often disappointed with the outcome. After all is said and done, the parties are still neighbors who must figure out a way to get along. But now, there is the additional barrier of a lawsuit which proves too high to hurtle. Someone ends up moving.

Alternative Dispute Resolution (ADR) is gaining rapid acceptance in resolving homeowner association conflicts. It is now required in some states like Oregon before lawsuits can be filed. The basic premise of ADR is that neither party is 100% right or wrong. A trained mediator can usually sort out the issues and forge a compromise that allow both parties to save face.

Mediation and arbitration are not the same. In mediation, a neutral third-party facilitator helps parties discuss issues and negotiate an agreement. The process includes gathering information, framing the issues, developing options, negotiating, and formalizing agreements. Parties in mediation create their own solutions and the mediator does not have any decision-making power over the outcome.

With arbitration, a third-party neutral, after reviewing evidence and listening to arguments from both sides, issues a decision to settle the case. Arbitration is often used in commercial and labor/management disputes.

Mediation-Arbitration is a hybrid that combines both processes. Prior to beginning, the disputing parties agree to try mediation first, but give the neutral third party the authority to make a decision if mediation is not successful.

There are a few things that are certain in this world: death, taxes and neighbors not getting along. It's only a matter of time before there is conflict. But HOAs have the advantage of a framework to deal with neighbor issues. Conflict resolution can be planned for just like preventive maintenance on the buildings. It’s extremely important to have such a mechanism in place. Once conflict erupts without one, it's very difficult to get the parties repointed to an amicable settlement. Adopting an Alternative Dispute Resolution Policy is a quicker, cheaper and effective resolution. All ADR Policies should conform with applicable state statutes and existing provisions, if any, in your governing documents.

Saving face in an HOA is just as important as with battling warlords of old. With an ADR policy in place, neighbors are much more likely to remain neighbors instead of the Hatfields and McCoys. The beauty of mediation is that disputing parties can put the conflict in its proper perspective. That way, conflicts end up being a mere bump in the road and not a forever burned bridge.

For a sample Alternative Dispute Resolution Policy, see www.Regenesis.net

Published: March 26, 2003

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .