HOA Lawsuit Avoidance

Whenever major disputes arise between groups of residents in Associations, it is incumbent for both parties to step back, to fully assess the situation, to objectively discuss the issue(s) and try to reach an equitable agreement that is best for the community as a whole. A lawsuit should be the last resort. For those who have experienced litigation, it is truly a costly and human nightmare.

A practical way to avoid lawsuits is to take steps to reduce tension in the community. This is a Board responsibility. Residents are less likely to sue an association if they look at it as a body made up of neighbors who listen to their problems, and not a cold, distant entity that is prone to disregarding their concerns. Holding meetings where residents can discuss issues and air their grievances is one option. Even neighborhood informal get-togethers that allow people to interact with board members as other human beings can do wonders for improving the relationship between residents and their HOA.

A former HOA President commented about lawsuits:

You may want to sugar coat it with “I am right” but when you sue your HOA you are suing yourself and your neighbors. The result usually is higher dues and/or special assessments, less ability for residents to sell/refinance their home, and living with angry neighbors upset with having to pay the bill.

An attorney commented:

I am of the opinion that many HOA’s are over lawyered. That happens because of the lack of education and the inability of many volunteer boards to understand what they are doing. It the natural answer for many who suddenly find themselves on the HOA board “Let’s consult the Lawyer”. It is good intentioned for an HOA to have a lawyer but too much dependency can easily develop. The truth is that 95 percent of the issues in an HOA are resolvable INTERNALLY without a lawyer.

And yet one HOA Manager tells residents in a newsletter publication:

If a Director is contacted by a Member or resident on Association Business, the Director will inform the person that he/she must communicate with the Board as a whole through the general manager This communication can be at a Board meeting, by request to be put on the agenda, or in writing.  In an earlier conversation with a resident, the Manager advised that person her job was ‘to protect the board’.

Board members are the elected representatives of the community homeowners.  As such, their actions should reflect the positions of the majority of homeowners.

Arizona case law states:

They (the Board) cannot rightly manipulate the affairs of the Corporation primarily with the design of securing benefits of the Corporation to one particular member or group of members, or of excluding another group from the exercise of its rights. Hatch v. Emery 1 Ariz.App. 142, 146; 400 P.2d 349, 353 (App. 1965)

Agree to Disagree

Using compromise to settle a conflict or dispute requires the parties involved to be consciously aware that the outcome might be less than they had originally hoped for. The final decision may be one that is acceptable but not optimal. There can be reluctance or resistance to using compromise as an approach to conflict resolution when the result seems like a loss. However if the focus is on what is achieved, rather than on what has been given up, there is a greater likelihood that the parties will leave with feelings of satisfaction and acceptance. Compromise is more successful when the parties have a range of tangible outcomes that are open for consideration such that the final decision is one that remains “within the box” for both parties.

With a lawsuit, one party wins and the other party loses… and the community as a whole  remains divided.

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