The
Colorado State HOA Office completed its’ study on HOA dispute resolution. One of the recommendations deserves
actions: “Implementing
a binding arbitration program would be a cost-effective and expeditious means by
which many of the disputes between homeowners and HOAs can be resolved”. This would be the single most important and
effective piece of HOA legislation passed in decades. Cost savings to HOA’s and home owners will be
millions of dollars a year in legal costs. The proposal can level the legal
playing field that currently pits the limited funds of a home owner against
the unlimited funds and legal
resources of the HOA. The program would
resolve problems based on HOA law and HOA governing documents vs. legal
proceedings and manipulation. Complaints
would be resolved in a timely manner before compounding. HOA complaints would begin and end out of
court through an initial inexpensive filing fee and end with a binding decision
rendered by a trained HOA arbiter. Home
owners could still choose to go to court vs using this process thus no legal
rights are forfeited. The process is not
complicated, doesn’t require lawyers, will not cost taxpayers, and is easy to
implement.
HOA
complaints mostly don’t belong in a court room and such proceedings cost
taxpayers in court costs and unduly overload our court system with cases. HOA
complaints mostly concern non-compliance with State law and HOA governing
documents and certainly don’t require lawyers and complicated and costly legal
proceedings in a court.
This
solution is NOT the flawed mediation process that requires home owners to gamble
hundreds of dollars on a mediation session in the “hope” of gaining an agreement
on dispute resolution. Mediation has
been a recommended dispute resolution for decades in HOA legislation and is
minimally effective. Mediation adds
time, process, and cost for home owners on dispute resolution with no guarantee
of finality. The agreements in mediation
can be “walked away from” by either party without prejudice thus sending the
parties back to court: the very thing
trying to be avoided. Mediators are not
licensed and don’t require any HOA educational or training standards. Mediators
hearing your case can thus be anyone.
This “profession” has less standards and rules than beauticians,
plumbers, manicurist, etc. Mediators claim to resolve up to 50-60% of cases
heard but what about the other 40% who are thrown back into court and the
uncounted complaints that are never filed due to an inability of a home owner to
gamble hundreds of dollars on the uncertainty of mediation?
The
recommendation of the State study can resolve the flaws of dispute resolution
through the courts and mediation. The
out of court process involves using trained med-arbs (mediators with arbiter
decision making authority) in an out of court venue. The cost to taxpayers is
zero as the system would be self-funded.
The State’s HOA Office would oversee this process. It already has an infrastructure in-place for
filing complaints and collecting fees.
The process is similar to handling home owner complaints with HOA
property managers through the Department of Regulatory Agencies (DORA). Thus, DORA has administrative models,
precedence, and experience to implement this system.
Objections
are surely to come from lawyers, the Community Association Institute (CAI), and
mediators who have spoken against this process based on their economic stake in
continuing the current litigious and costly dispute resolution process. However, with thousands of complaints and
inquiries received by the State’s HOA Office and legislators it is time to focus
on solutions and problem solving vs continuing on the current path that has
tainted HOA governance and made HOA laws ineffective for home owners.
Out
of court binding dispute resolution is affordable, simple, fair to both HOA and
home owner, provides cost savings to home owners, HOA’s, and taxpayers, provides
timely complaint resolution, is accessible, doesn’t require anyone to give up
their legal rights, and results in decision and finality in disputes. The State’s recommendation awaits legislative
sponsors.
Colorado HOA Forum www.coloradohoaforum.com
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