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SkuddleM
(Colorado)
Posts:21
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| 06/26/2008 12:06 PM |
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Colorado legislature revised its CRS 38.33.3 (Common Interest Ownership Act) to require HOAs to adopt an Alternate Dispute Resolution policy by January 1, 2007. I have the assignment of writing and implementing the policy for my HOA.
The BOD wants the following language in the policy:
"Nothing in this Policy shall be construed to require any specific form of alternative dispute resolution, such as mediation or arbitration, or require the parties to meet. Neither the Association nor the Lot owner waives any right to pursue whatever legal or other remedial actions are available to either party."
1. If incorporated, doesn't that language in effect say, "Hey this is our policy but it is really meaningless because you don't have to participate in it"?
2. If so, why take the time and effort (and pay an attorney to review the finished policy) other than to satisfy the Colorado statute requiring an ADR policy to be in place???
3. Is there anything in CRS 38.33 that requires ADR be actually used (as opposed to being available)?
Thank you for your comments.
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GlenL
(Ohio)
Posts:1375
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| 06/26/2008 12:20 PM |
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| Go to http://www.hindmansanchez.com/ and use the search at the bottom of the page. Type in ADR and you can see a sample of an ADR resolution for Colorado and the answers to your other questions. As always for a legal opinion of whether it complies with the applicable state law after your policy is drafted it should be reviewed by the HOA's attorney. |
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SkuddleM
(Colorado)
Posts:21
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| 06/26/2008 2:14 PM |
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I went there and used the third example for the policy. Everything makes sense to me but when I presented it to the BOD the members balked and requested I insert the following statement:
"Nothing in this Policy shall be construed to require any specific form of alternative dispute resolution, such as mediation or arbitration, or require the parties to meet. Neither the Association nor the Lot owner waives any right to pursue whatever legal or other remedial actions are available to either party."
To me, that statement nullifies the effect of the entire policy. It's like the State telling prospective drivers, "Okay,if you want a driver's license, here are the rules of the road. But you really don't have to abide by them if you don't want to."
As for the example itself, in Section 4(d)ii appear the words, "If specifically agreed to by both parties to the arbitration, the arbitration shall be final and
binding".
But what if one party wants binding arbitration and the other does not, and an agreement cannot (or will not) be reached? What then? Seems to me that the whole process comes to a halt. Mediation has been formally terminated, the policy does not really state that one of the parties has won by default of the other, nor does it state that the process must be followed through to completion (at least I did not see anything that says who prevails at that point).
Sorry for what may appear dumb questions, but I need to understand these points if I am going to convince the BOD not to include the disclaimer. |
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GlenL
(Ohio)
Posts:1375
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| 06/26/2008 2:31 PM |
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| In ADR if one party wants it to be non binding I do not believe you can force them into giving up their right to appeal. If the majority of the BOD wants this you are not going to change their minds no matter what you tell them. On the surface it seems that it is protecting both the H/O and the HOA but I would insist that the resolution be vetted by the attorney to see if it passes muster, the phrase may be perfectly fine. Either that or tell them that you cannot in good conscience include it and they should have someone else draft the resolution and when you vote against it make sure your vote is clearly recorded. |
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SusanW1
(Michigan)
Posts:2178
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| 06/26/2008 4:23 PM |
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BOTH parties have to agree to use the mediation. All that phrase does is protect the HOA from having to accept a mediator's decision. I think it's pretty much boilerplate protection for the HOA.
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RogerB
(Colorado)
Posts:3702
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| 06/26/2008 4:49 PM |
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Skuddle in answer to your questions.
1. If your Board votes to include the sentence you provided that is their perogative. That statement is not meaningless.
2. SB-89 does not require the ADR policy to be reviewed by an attorney.
3. There must be an ADR policy statement. Meanwhile, ADR is encouraged but not required.
Following is the beginning portion of the ADR paragraph in SB-89 which is part of CCIOA.
"38-33.3-124. Legislative declaration - alternative dispute resolution encouraged - policy statement required.
(1) (a) The general assembly finds and declares that the cost, complexity, and delay inherent in court proceedings make litigation a particularly inefficient means of resolving neighborhood disputes. Therefore, common interest communities
are encouraged to adopt protocols that make use of mediation or arbitration as alternatives to, or preconditions upon, the filing of a complaint between a unit owner and association in situations that do not involve an imminent threat to the peace, health, or safety of the community."
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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