Avoiding Litigation The Power of Alternative Dispute Resolution

With dozens—and sometimes hundreds—of people living in a community governed by neighbors, acquaintances, and friends, disputes can transpire frequently, as is the case with condos and co-ops. Undoubtedly, disagreements among residents, boards, and vendors can run high and when they do, the specter of litigation can loom large over the affected parties, creating worries about costs—both financial and in terms of time—as well harboring bad feelings and an uncomfortable environment for the community as a whole. There are plenty of reasons to find other ways to settle disputes.

Fortunately, alternative dispute resolution offers two options for settling and moving on from divisive issues. Those options, mediation and arbitration, are both effective and can help shareholders, unit owners and boards resolve thorny issues without either party ever setting foot before a judge.

Points of Contention

For the most part, harmony rules over co-ops and condos more so than conflict, says attorney Ramon C. Palacio, Esq., partner with Association Law Group, P.L., which has offices in Fort Lauderdale and Miami. “Fortunately, in most condominium associations, the conflicts between board members and residents are minimal, as residents who choose to live in a condominium understand that with the advantages of not having to worry about maintaining the exterior of their home, roofing, painting, or even landscaping, for example, come certain restrictions. Those restrictions may be as common sense as keeping the noise level down and may also include the requirement to obtain approval from the association before renting the unit.”

But when things do go wrong, and they invariably do, there are some types of issues that spark more problems than others. “Disputes arise with shareholders versus shareholders and shareholders versus owners,” says Jeffrey T. Zaino, Esq., vice president of the American Arbitration Association in New York. “The most common (conflicts) are shareholder versus owners for problems in their condo.”

Some types of communities may be more prone to conflicts than others as well. “Interestingly, the smaller the association, the greater or more personalized the conflict because the residents and board are often constantly running into each other,” says Palacio. “When a resident fails to pay the unit’s assessments in a timely manner, for example, the board can take that quite personally as the rest of the unit owners in the small association are having to pick up the shortfall through higher regular assessments or perhaps even a special assessment.”


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