While Americans have embraced the aggressive and competitive sport of lawyer-dueling, hiring them to litigate over issues significant or otherwise ... skyrocketing litigation costs have caused many to reexamine the value of lawsuits for problem solving. Nowhere is this more apparent than in homeowner associations (HOAs), where disputes are a regular part of life. If you are a member of an HOA, you know. Pets, parking, renters, late fees, fence violations and an endless list of other issues are fuel for the fires of furious disagreement.

Consider cases like one in California where a dispute over a fence landed a homeowner with $40,000 in his own legal fees and, when he lost the decision in court, forced him to pay the $61,000 of HOA legal fees as well. Litigating over a $500 set of drapes ended up costing one HOA homeowner $15,000 in legal fees. On top of which, after the legal jousting has ended, there you are living next door to the same people with whom you did battle by proxy. The war often settles down to a slow seething simmer and stays there for years. What a way to live! There's got to be a smarter way for alleged adults to resolve differences you'd think. There is.

Call Off the Dogs. Alternate Dispute Resolution (ADR) is the problem-solving method of choice for more and more homeowner associations. Training is available for those who are interested in starting an ADR program as well. Participants in mediation or arbitration procedures between homeowner association members describe the results as astonishingly effective and satisfying. The cost for mediation services in most areas is free, low or nominal.

Mediation & Arbitration. There are two ways ADR can work: In mediation, the disputing parties take their problem to a third-party neutral, who is the mediator. Investigation and documentation of the complaint is made. The mediator conducts meetings in which he presents non-binding resolution recommendations. Mediation is usually described as a non-binding settlement.

In some parts of the country, if both parties are willing to accept the terms of the recommended solutions offered by the mediator, a conciliation or consent agreement is drawn up. Both parties sign the agreement and it becomes an enforceable contract. Some groups that use this form of ADR insist that if both parties cannot reach an agreement the dispute proceeds to a public hearing of the association. The outcome of that hearing results in a binding agreement as well, which carries the same weight as a lower court decision.

The other form of ADR is the process of arbitration in which both parties, at the outset, accept that the ruling of the arbitrator will result in a binding settlement. The American Arbitration Association, which is listed in the Yellow Pages of most cities, reports a steady increase of commercial mediations over the last six years. A dispute mediation service created in 1991 in Hawaii reported an 85% success rate among those parties who could be brought together. Clearly, ADR is having a harmonizing impact on homeowners associations everywhere. Use it in good health.

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Published: September 23, 2009

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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 .