New ADR Law in PA

NpS (Pennsylvania)
Posts: 4,216

Posted:

In 2018, PA finally adopted laws for HOAs to implement Alternative Dispute Resolution (ADR). It is only mandatory for HOAs formed after the date of enactment, but we decided to put something in place for our 30+ years old HOA.

Among the bill’s most important features is the requirement that HOAs must incorporate into their bylaws procedures for ADR between unit owners or unit owners and the association, as long as all parties agree to the ADR method. That includes mediation or arbitration, two processes that help resolve the dispute in a timely and efficient way, and without going to court.

Additionally, the bill gives unit owners who are current in the payment of their dues and assessments the right to file a complaint with the Pennsylvania Attorney General’s Bureau of Consumer Protection when they believe there are violations of the established meeting, voting or record-keeping requirements. To file this complaint, the unit owner must have either exhausted its ADR options under the bylaws or have failed to obtain a remedy to the dispute through ADR within 100 days. A unit owner also may file a complaint immediately if the ADR options were not available to the unit owner in the first place or if the HOA refuses to participate in ADR.

That's not much to go on. And I can't picture stuff about meetings, voting, and record keeping ever becoming an issue for us, especially since our state does not have open meeting laws.

Many of you I'm sure have developed ADR programs that work.

I'm hoping you can share your thoughts on:
1) Is neighbor-to-neighbor ADR used in your community? Is it effect?
2) Is owner-to-HOA ADR used for things like dissatisfaction with landscaping? Is that effective?
3) Is ADR used for things like pets and parking/driving issues? Is that effective?
4) Do you have a preference for mediation or arbitration?

I'm not interested in developing a program that people won't use. So I am looking for some insights from your experiences on these topics and anything similar.

Thx everyone.

Sikubali jukumu. Read all posts at your own risk.

SueW6 (Michigan)
Posts: 814

Posted:

I would think this would be a last resort process after all other steps have resulted in no resolve.

It is designed to protect the courts from bring overloaded, similar to mediation.

So ... are your internal conflict procedures in ordered?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By SueW6 on 08/22/2019 5:33 AM
I would think this would be a last resort process after all other steps have resulted in no resolve.

It is designed to protect the courts from bring overloaded, similar to mediation.

So ... are your internal conflict procedures in ordered?

Hi Sue.

Yes the courts don't want it. We're wondering what the benefits would be for us to put something in place.

The only reason we're thinking about this is that we are making some changes to our bylaws and thought it might be a good idea to put something in about ADR. The stuff in the statute isn't stuff that we are likely to come up against.

So I'm interested in learning from you all what your ADR practices are and if they are something that sits on the shelf, or actually get used in a positive way.

At the present time, we don't have any process that involves an independent third party coming in to mediate or arbitrate a dispute.

Sikubali jukumu. Read all posts at your own risk.

RichardP13 (California)
Posts: 3,868

Posted:

In California, we have both IDR and ADR, and have for some time. In ten years of managing well over 100 HOA's, I have NEVER had the occasion to use the process on behalf of the HOA. We is the adage, "if you don't do the crime, you won't do the time".

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By RichardP13 on 08/22/2019 9:08 AM
In California, we have both IDR and ADR, and have for some time. In ten years of managing well over 100 HOA's, I have NEVER had the occasion to use the process on behalf of the HOA. We is the adage, "if you don't do the crime, you won't do the time".

Thanks Richard.
Focusing on the distinction between ACR (using someone from the outside) vs IDR (keeping things in-house) - Can you describe a typical IDR setup? Is it anything more than a traditional appeal board?

Thx.

Sikubali jukumu. Read all posts at your own risk.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By NpS on 08/22/2019 9:35 AM

Posted By RichardP13 on 08/22/2019 9:08 AM
In California, we have both IDR and ADR, and have for some time. In ten years of managing well over 100 HOA's, I have NEVER had the occasion to use the process on behalf of the HOA. We is the adage, "if you don't do the crime, you won't do the time".

Thanks Richard.
Focusing on the distinction between ACR (using someone from the outside) vs IDR (keeping things in-house) - Can you describe a typical IDR setup? Is it anything more than a traditional appeal board?

Thx.

Having never done one, not sure how it is actually done. From what I have read, it sometimes would be one on one, member vs Board member. Four years ago the legislators allowed members to bring their attorneys. That pissed off attorneys like the ones from davis-stirling.com (he said it at a seminar). Since, supposedly attorneys can't speak to someone without their attorneys present, their recommendation is postponing the meeting until, the HOA's attorney can show up.

Just do the right thing in the first place and you stay out of harm's way.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

OK...OK...lets get through this ADR. I will be polite and professional and play by the rules. Now if I do not like the decision, I will be hauling your a$$ off to court, but in the meantime, let's do ADR.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JohnC46 on 08/22/2019 1:01 PM
OK...OK...lets get through this ADR. I will be polite and professional and play by the rules. Now if I do not like the decision, I will be hauling your a$$ off to court, but in the meantime, let's do ADR.

Let me ask you this John.

We get quite a few complaints that are, in reality, neighbor to neighbor issues. People, for whatever reason, think it's the job of the HOA to fix their neighbors. Whether it's a pet issue, or a parking issue, or a noise issue, or whatever -- we have no desire or ability to fix gripes between people who don't know how to be decent neighbors to each other.

Of course, no matter how often we tell them, that doesn't stop them from making demands on the BOD to "fix" things.

I'm thinking that, maybe, if we had some program available for owners to resolve these interpersonal issues, it might diminish some of the noise. Am I being realistic? Is it likely to have some benefit to the neighborhood?

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By NpS on 08/22/2019 2:10 PM

Posted By JohnC46 on 08/22/2019 1:01 PM
OK...OK...lets get through this ADR. I will be polite and professional and play by the rules. Now if I do not like the decision, I will be hauling your a$$ off to court, but in the meantime, let's do ADR.

Let me ask you this John.

We get quite a few complaints that are, in reality, neighbor to neighbor issues. People, for whatever reason, think it's the job of the HOA to fix their neighbors. Whether it's a pet issue, or a parking issue, or a noise issue, or whatever -- we have no desire or ability to fix gripes between people who don't know how to be decent neighbors to each other.

Of course, no matter how often we tell them, that doesn't stop them from making demands on the BOD to "fix" things.

I'm thinking that, maybe, if we had some program available for owners to resolve these interpersonal issues, it might diminish some of the noise. Am I being realistic? Is it likely to have some benefit to the neighborhood?

I agree, unless one of them is pig headed. It is like cheaters cheat.

Do not know what the ADR is saying about who is a mediator but one type I might suggest is a minister, priest, rabbi, etc but a non-resident. One that people will believe to be independent and moral. Yes it could calm most people, but not the pig headed ones.

SheliaH (Indiana)
Posts: 6,964

Posted:

I've often said that I prefer some sort of alternative dispute resolution program homeowners could use before they and the Association throw down in court. Ideally, the setting isn't as intimidating as court might be and the emphasis is on helping both sides come to some sort of agreement everyone can live with. I wish our state had something like this - I could see law students serving as mediators to get valuable experience, and I remember hearing about some prosecutor's offices (can't remember where) starting similar programs where neighbors could work out their difference rather than resorting to vandalism, gunfire and all that.

The closest thing I've heard about in my area is the BBB's ADR program. I wrote a news story about it many years ago and people could volunteer to become mediators after they have a certain amount of training. The service was available to people who had issues with member companies - don't know if our local BBB still has this available, but the national BBB website has some interesting information on their program - you may want to look through what they have to guide you in setting up something in your community: https://www.bbb.org/bbb-dispute-handling-and-resolution/dispute-resolution-rules-and-brochures/ You might even contact the BBB in your area to see if they have this and whether they'd be willing to help you set something up. Or try a local law school - maybe there are some law students who might help put something together in exchange for class credit.

As to your questions, I think you can put neighbor to neighbor issues in mediation, but homeowner vs. association issues in arbitration. Arbitration is more formal and you can set it up where both sides agree in advance to comply with the arbitrator's decision (I'd get someone who's a certified arbitrator or has had extensive experience). Mediation can be also be binding, but usually the goal is to get both sides to come to an agreement everyone can live with. Mediation can also be more relaxed and not as intimating as going to court, which is why it might work well with neighbor disputes like pets.

Another goal I'd want to achieve is cost-effectiveness. We all know lawsuits can be expensive and take a helluva long time, but if a good arbitration program can schedule a session (maybe several) to resolve the problem in half the time and cost, all the better.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JohnC46 on 08/22/2019 2:34 PM
Do not know what the ADR is saying about who is a mediator but one type I might suggest is a minister, priest, rabbi, etc but a non-resident. One that people will believe to be independent and moral. Yes it could calm most people, but not the pig headed ones.

Thanks John.
There's an old saying where I come from: "From a pig, expect a grunt." With you all the way on that one.

As far as selecting a mediator, agree that is should be a non-resident. Not sure where we would find a minister, priest, or rabbi who has the time.

Ultimately, I don't think it will be easy to find someone qualified who isn't interested in getting paid. I don't think our BOD would want the HOA to cover the cost. So my next question is -- How much do you think people would be willing to pay for a qualified person to mediate their dispute?

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By SheliaH on 08/22/2019 4:53 PM
I've often said that I prefer some sort of alternative dispute resolution program homeowners could use before they and the Association throw down in court. Ideally, the setting isn't as intimidating as court might be and the emphasis is on helping both sides come to some sort of agreement everyone can live with. I wish our state had something like this - I could see law students serving as mediators to get valuable experience, and I remember hearing about some prosecutor's offices (can't remember where) starting similar programs where neighbors could work out their difference rather than resorting to vandalism, gunfire and all that.

The closest thing I've heard about in my area is the BBB's ADR program. I wrote a news story about it many years ago and people could volunteer to become mediators after they have a certain amount of training. The service was available to people who had issues with member companies - don't know if our local BBB still has this available, but the national BBB website has some interesting information on their program - you may want to look through what they have to guide you in setting up something in your community: https://www.bbb.org/bbb-dispute-handling-and-resolution/dispute-resolution-rules-and-brochures/ You might even contact the BBB in your area to see if they have this and whether they'd be willing to help you set something up. Or try a local law school - maybe there are some law students who might help put something together in exchange for class credit.

As to your questions, I think you can put neighbor to neighbor issues in mediation, but homeowner vs. association issues in arbitration. Arbitration is more formal and you can set it up where both sides agree in advance to comply with the arbitrator's decision (I'd get someone who's a certified arbitrator or has had extensive experience). Mediation can be also be binding, but usually the goal is to get both sides to come to an agreement everyone can live with. Mediation can also be more relaxed and not as intimating as going to court, which is why it might work well with neighbor disputes like pets.

Another goal I'd want to achieve is cost-effectiveness. We all know lawsuits can be expensive and take a helluva long time, but if a good arbitration program can schedule a session (maybe several) to resolve the problem in half the time and cost, all the better.

Thanks Sheila.
Nice idea about law school students. We have 2 law schools within a half hour drive. Will follow up on it.

Will also check out BBB.

I'm not sure that my HOA BOD would go for binding arbitration. We get threatened with a lawsuit from time to time, but to my knowledge, no one has ever filed a suit. I don't think the BOD would be willing to give up decision-making authority without a court order. But who knows.

I think you hit the mark on cost effectiveness. If no one is willing to spend the bucks, then what's the use of having the program.

Thanks.

Sikubali jukumu. Read all posts at your own risk.

BobD4 (up north)
Posts: 1,002

Posted:

1 - My own jurisdiction 1n 2001 legislated a mediation & arbitration provision into all site-specific governance documents of statutory condominium corporations.

No grand-fathering exemption was provided.

( Such "deemed" component corresponded to mandatory pre-litigation civil procedures generally introduced in the most congested urban centres in 1999 ).

It's impossible to say whether it has helped reduce court congestion.

2 - For condo disputes the requirement has been "softened" by condo reform awaiting formal implementation.

A government funded condo dispute tribunal has also been created using online dispute technology upfront; the jury's still out on that. But a different jurisdiction has been using it for 4 years.

3 - Arguably most condo owners ( within the 10,000 condo corporations in my jurisdiction ) were too thrifty upfront to want to spend a dime until too late discovering the potential costs & toxicity of disputes.

Judicial drafting was also sloppy about the "deeming" being legislated into governance documents.

4 - Some judges here - faced with objections protesting deficient process etc - merely ignored the "gate-keeping prior requirement" when bitter condo disputes hit their courts unmediated.

Or sent litigants into hallways for "quicky formality"; went through that for landlord & tenant.

For condo governancers trying to work through these, pragmatic solutions from the bench included paper trails inviting to mediate with 30 day deadline to respond & attaching list of several mediators. . . .

5 - There is nothing to ever stop disputants voluntarily hiring professionals themselves and trying for a quiet win-win.

There may be enough good faith to want to save bucks etc, but most find out the HARD WAY . . .

6 - Wanting it free suggests it won't get much of a chance upfront . . .

7 - There is also nothing effective to police disputants who renege on mediation commitments. It may be that only a professionals in mediation process, will conscientiously respect mediation confidentiality or privilege.

Mediation has issues for practitioners. Looking for freebies and law students . . . ?

7 - Good luck with whatever the outcome.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Nice to hear from you Bob. Hope all is well up North.

Very interesting comments. In particular, the courts' treatment of these disputes the same way that they traditionally handle landlord-tenant complaints.

Hadn't thought about reneging on mediation commitments. But I can clearly see how that could blow up.

Your overall message on the effect of people wanting freebies is valid IMO.

Just wondering. Do you have any success stories that you can share from what you've observed?

Thx.

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Nice to hear from you Bob. Hope all is well up North.

Very interesting comments. In particular, the courts' treatment of these disputes the same way that they traditionally handle landlord-tenant complaints.

Hadn't thought about reneging on mediation commitments. But I can clearly see how that could blow up.

Your overall message on the effect of people wanting freebies is valid IMO.

Just wondering. Do you have any success stories that you can share from what you've observed?

Thx.

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Nice to hear from you Bob. Hope all is well up North.

Very interesting comments. In particular, the courts' treatment of these disputes the same way that they traditionally handle landlord-tenant complaints.

Hadn't thought about reneging on mediation commitments. But I can clearly see how that could blow up.

Your overall message on the effect of people wanting freebies is valid IMO.

Just wondering. Do you have any success stories that you can share from what you've observed?

Thx.

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Nice to hear from you Bob. Hope all is well up North.

Very interesting comments. In particular, the courts' treatment of these disputes the same way that they traditionally handle landlord-tenant complaints.

Hadn't thought about reneging on mediation commitments. But I can clearly see how that could blow up.

Your overall message on the effect of people wanting freebies is valid IMO.

Just wondering. Do you have any success stories that you can share from what you've observed?

Thx.

Sikubali jukumu. Read all posts at your own risk.

GenoS (Florida)
Posts: 4,276

Posted:

In Florida, many disputes in condo associations are subject to binding arbitration with the state Department of Business and Professional Responsibility (DBPR). It's different for HOAs where the DBPR will only arbitrate a very small list of disputes. The disputes are defined in the statutes FS 718 (condo) and 720 (condo). In an HOA most owner vs HOA disputes require pre-suit mediation. Each party gets to pick from a list of state-authorized mediators. I'm not sure what happens if both parties can't agree on one. I think they get about $200 an hour which the parties split. There are no provisions in the statutes for owner-owner disputes. Those are considered private matters. With pre-suit mediation, once an impasse is reached then a lawsuit may be filed. If one side refuses the offer of mediation then they lose the right to recover their legal costs if they prevail in a subsequent lawsuit.

Almost everyone wants to stay out of court, but if someone is determined to "win" then they can sue. If someone has a right to sue and a cause of action to prosecute and they're willing to fund a lawsuit, then I would be very wary of any attempt to take that right away from them no matter how benevolent the motivation. That's why I think it's so important for a state's statutes to address the subject.

If it's even possible, I doubt short-circuiting anyone's right to sue could be done by amending the bylaws.

NpS (Pennsylvania)
Posts: 4,216

Posted:

PA's new ADR law does not restrict a homeowner's ability to seek relief through the courts. It's more like, if the HOA does not have an ADR process in place, then the homeowner can go file a complaint directly with PA's consumer protection bureau. But I'm not sure what that gets them - because the CPB is fairly new and probably not staffed and capable to deal with the breadth of complaints that homeowners might have.

Regarding lawsuits, we have a similar situation to FL where around 50% of the suits filed are shuttled off to pre-suit mediation with a similar cost structure to yours. This isn't specific to HOAs. It applies to all suits.

Not sure how it all affects right to recover legal costs here, but that might be something to check out.

I'm wondering. Are you aware of any actual situations where the FL ADR rules for HOAs were actually used successfully?

Sikubali jukumu. Read all posts at your own risk.