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LizD3 (California)
Posts: 200
Posted:
I’m in a hellish HOA. I’ve spent more than a year trying to explain that we are obligated to abide by the CC&Rs, etc, but it was pointless. I finally tried an IDR, but the Board rep refused to sign off on what he had negotiated. My CC&Rs says the next step is arbitration.

So, anyone been through it? Can anyone explain, step-by-step, how it works, please?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Who is going to hire the arbitrator? This is a step before going to court. Can not take issues to court until the matter is arbitrated. If that is unsuccessful. Bot parties may hire their own arbitrator.

This basically means that you do not keep complaining but resolving. If you can not bring terms to the table you can agree with then it does nothing.

I am not sure what your personal issues are with your HOA. Arbitration is a personal matter. It is your issues with the HOA that directly effects you. If you disagree with a fine this is that time. If it is a matter of the HOA not doing it's job per your opinion this is not that approach.

Former HOA President
MaxB4
Posts: 3,513
Posted:
This might help.

https://www.davis-stirling.com/HOME/H/HOA-Pre-Litigation-ADR
LizD3 (California)
Posts: 200
Posted:
Thanks for commenting. There is no fine. And nothing personal. And, no, arbitration is in lieu of court, not a precursor. And, no, there is only one arbitrator because there is only one arbitration. And, no, it is not my opinion, it is documented fact. Honestly, if I was not living this, I never would have believed that any HOA or any person could be so horrible.
LizD3 (California)
Posts: 200
Posted:
Much thanks - a big help. Attorney; likely.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I am so confused. You go to arbitration before you can go to court. That is the terms. Arbitration is how the HOA decides to handle issues first and foremost. If that process fails to get a resolution then the matter can go to court.

Usually there is an issue an example of a fine that do not feel should been issued.you argue it at a meeting. Does not resolve. The HOA or even yourself can ask for it to go to arbitration. You hire a lawyer that works as an arbitrator. If the issue not resolved then court.

If you want to go to arbitration because you just do not like your HOA it is NOT a counseling session. It is for real possible legal recourse.

Plus people get upset their HOA not enforcing this or that. How do you know they are not? What method do they have to enforce? Is it fines? Loss of use of amenities? Do not just assume enforcement of the rules just happens because it should. Sometimes you can not tell the struggle or timeline.

Former HOA President
LizD3 (California)
Posts: 200
Posted:
Melissa - Let me give you one example: our elections were last held in 2021. Our CC&Rs says they must be annually. This is almost halfway through 2023. Obviously the elections are overdue. Obviously they are in violation of our rules.

This may help clarify arbitration: https://legaldictionary.net/arbitration. The point of arbitration is to resolve matters without going to court.

You do not hire a lawyer to work as arbitrator. There is a single arbitrator who hears both sides of the issue.

I hope that helps you if you become an HOA President again!
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By LizD3 on 05/18/2023 12:43 PM
Melissa - Let me give you one example: our elections were last held in 2021. Our CC&Rs says they must be annually. This is almost halfway through 2023. Obviously the elections are overdue. Obviously they are in violation of our rules.

This may help clarify arbitration: https://legaldictionary.net/arbitration. The point of arbitration is to resolve matters without going to court.

You do not hire a lawyer to work as arbitrator. There is a single arbitrator who hears both sides of the issue.

I hope that helps you if you become an HOA President again!

Well said!
SheliaH (Indiana)
Posts: 6,964
Posted:
Who oversaw the IDR? If an agreement was negotiated, but the board rep won't sign off on it, you may need to go back to whoever negotiated the proposed settlement and see what your options are. If the board rep refused to sign it, that may be something you can use as evidence in your arbitration hearing.

As you probably know, both sides present their arguments before an arbitrator, who makes a decision. From the ones I've seen, both sides agree in advance to comply with the arbitrator's decision. Usually, they'll split the costs of the arbitrator (which may also include travel time, meals and whatever else was required to hear the dispute) and the winner agrees to reimburse the loser. There are certified arbitrators - you can try this website to look for one in your area https://www.adr.org/Arbitration

Attorneys CAN be trained as arbitrators, but some arbitration organizations mediate disputes in certain areas like insurance or securities. Years ago, the BBB in my area had a volunteer arbitration program where they trained all manners of people to negotiate settlements between BBB members and customers. I don't know if the program is still available, but I remember the training was fairly intense (about six weeks).

From the way you write this post, you are hopping mad over the IDR result or lack thereof. Considering you tried to follow the CCRs and the board rep replied "so what?", I understand, but before you do anything else, you really need to sit down, calm yourself, and then decide what your end game will be and what you're willing to do to get there. Otherwise, you'll find yourself saying and/or doing something you'll regret. Remember, even with arbitration, the rest of the board may tell you to kick rocks, and then it'll be time to get down in court - more money, time, and drama. If you win, you will have something to show the court if a lawsuit is your only option (that might also include receivership because you can show you tried to cooperate and they'll have to explain themselves.)

But even with that, the remaining homeowners won't go away if you win everything - how will all of you get along going forward? If you haven't already seen an attorney, talk to him or her about your options and see what you can find out about costs, and your chances. Anyone can sue for anything, and you might win, but they might appeal and this will go on for years. Suing is easy, collecting a judgement, not so much.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
MelissaP1 (Alabama)
Posts: 13,836
Posted:
You asked someone to walk your through how arbitration works but then you CORRECT people when they tell you? I mean sound like you already know how it works. Why are you asking?

This isn't unlike how if you buy a car, they make you sign an arbitration agreement. This means just that. You agree to arbitration BEFORE a lawsuit goes to court. The judge will even ask IF the case has gone through arbitration before will even hear the case. If it hasn't then must go through arbritration.

Yes, there are people who are just arbitrators. However, there are also lawyers whom work as them as well. My choice would be to lean toward a lawyer than just an arbitrator. That is just me.

Plus again arbitration is NOT a counseling session between you and your HOA. You have to have a purpose be it that unresolved "IDR" or a fine you don't agree with etc. It can't package the whole world up for you. It's not like "I don't like our HOA or how it works so arbitrate it". You go into with an issue that you are butting heads over once resolved will be agreeable terms or makes one "whole".

You can barely make why you need arbitration as an option here, I can just imaging how well your communication skills are working with the HOA...

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
A member does not have to do ADR before suing the association in small claims court regardless of what your CC&Rs say - only if you sue in superior court. Many issues can be resolved in small claims court.
TerriS6 (California)
Posts: 3,284
Posted:
You don't need arbitration to enforce election laws. Civil code section 5145 - you can enforce election laws in small claims court. each violation is a fine up to $500.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
The court will ask if this been through Arbitration if that is in your documents. This was first things we studied in my law class.

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
In California, the law trumps the governing documents.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I am talking the law. If arbitration is the method used to deal with issues it goes first and foremost. It fails then court. The lawyer would know this if went to court. Which would slow it down more. Arbitration is used to speed up the legal process than overload the court system.

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
In California, you don't need arbitration before going to small claims court - only to superior court. Many many HOA issues can be resolved in small claims court.
LizD3 (California)
Posts: 200
Posted:
Terri - you're genius. Thank you very much.

Melissa - you've clearly put a lot of time into trying to help. It is greatly appreciated - thank you.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Suing your HOA is suing yourself and your neighbors. Going to small claims court makes your HOA need to be represented by a lawyer since it is a corporation. The bill for which is paid with everyone dues. Plus again you have to be damaged so the court can make you whole. Going to court because just do not like how it is run is not a court thing. It is a you and your neighbors thing.

So keep listening only to what you want to hear not what needs to be heard. I am sure you will be successful that way. That is how life and reality works we all know. Sarcasm...

Former HOA President
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By MelissaP1 on 05/18/2023 8:16 PM
Suing your HOA is suing yourself and your neighbors. Going to small claims court makes your HOA need to be represented by a lawyer since it is a corporation. The bill for which is paid with everyone dues. Plus again you have to be damaged so the court can make you whole. Going to court because just do not like how it is run is not a court thing. It is a you and your neighbors thing.

So keep listening only to what you want to hear not what needs to be heard. I am sure you will be successful that way. That is how life and reality works we all know. Sarcasm...

In California, lawyers are not allowed in Small Claims unless they are defending a defendant upon appeal. Didn't you learn that in your Business Law class?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I learned from our lawyer if you are a corporation you have to be represented by a lawyer in court. A corporation represents many not one person in a HOA. All members are being sued.

Former HOA President
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By MelissaP1 on 05/18/2023 8:51 PM
I learned from our lawyer if you are a corporation you have to be represented by a lawyer in court. A corporation represents many not one person in a HOA. All members are being sued.

In Superior Court, NOT in Small Claims.
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By MelissaP1 on 05/18/2023 8:51 PM
I learned from our lawyer if you are a corporation you have to be represented by a lawyer in court. A corporation represents many not one person in a HOA. All members are being sued.

https://www.davis-stirling.com/HOME/R/Representing-HOA-in-Small-Claims
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Oh I am sorry, you want your HOA represented by someone who's ONLY qualification is to be a homeowner. Which is what happens when your HOA sends someone into the court to represent them. Who do you think goes into the court for the HOA? One party the suing one? Nope. The HOA has to send a representative into small claims too. Who do you want it to be? The idiot that can't run a HOA correctly in the first place or a lawyer? Your choose... I will wait....

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
In California, a corporation can be represented by at least one officer of the corporation in small claims court. A board can get legal advice to prepare for the hearing. Unfortunately, boards are not always well represented even when lawyers are advising them. If a board member is honest and knows how to read, he/she has a good head start.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Again, would you want an unpaid person going to court to represent you? Already paying the lawyer for advice. Why not for going to court?

I am good enough and have gone to court for my HOA before. Hated every second of it. Plus was dragged in regardless if I had volunteered or not. The lawyer had a subpoena for me if did not do it.

I had to take off of work. Used my vacation time. Had to burn my gas. Pay for parking. Plus take the stand in a courtroom. Nervous much? All of which was for FREE! You know what you get for free? Not all that good of work.

So if you have a board member who is willing to interrupt their life and do it for free good luck. I do not know many people who would willingly go into court non professional.

Why not have a professional for professional work?

Former HOA President
WendyM5 (North Carolina)
Posts: 1,522
Posted:
what are you suing over again? to have elections every year since the last one was in 2021? maybe the elections were not held because there were no people running?

vis ta vie
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Wendy have a feeling it is the principle of it. They want elections but my guess they do not to be on the board. Just that there are "rules" and they shall be followed. It could be the people on the board who want to be on it are there. Why have elections if no need for one?

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
At our recent annual meeting, 2 directors were lamenting all the hours they are putting in for association matters. One neighbor stood up and said "that's your job."
Again, lawyers are not permitted to appear in small claims court in California except on appeal.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
It is a permission thing? That makes no sense.

Lamenting or discussing decisions for their HOA? The people elected may not want to do the job or have no idea how to do it. Their ONLY requirement is to be an owner. Someone elected them to be on the board...

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
Makes total sense. Quick, fair, inexpensive = no lawyers.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Arbitration is cheaper and faster than court. Plus no lawyers. A court has more legal ramifications and enforcement. I would want a professional to lead me in court. Getting advice from them anyways. Why not pay someone to do a professional job? I would not trust a free job. Like hiring a person off the street to do plumbing to fix a leak. Duct tape will do it but welding is better.

Former HOA President
TerriS6 (California)
Posts: 3,284
Posted:
The two parties still have to split the cost of the mediator in arbitration. That would be thousands of dollars to split. Small claims is $30. plus cost of service which if by the sheriff is $40.
LizD3 (California)
Posts: 200
Posted:
And you can use a lawyer in arbitration, I believe. Assuming the HOA has a lawyer (which they typically do), you must have one, too. So your cost went from thousands to thousands of thousands.
JamesB37 (California)
Posts: 351
Posted:
If you're thinking about arbitration, I would check with your local BAR association.

For example, Orange County BAR - $150 each side which covers up to the first 2 hours

https://www.ocbar.org/All-News/News-View/ArticleId/1361/Settle-Your-Case-Quickly-Cost-Effectively-with-Orange-County-Superior-Courts-Civil-Mediation-Program

A lot of info about the process:
http://www.occourts.org/directory/civil/alternative-dispute-resolution/information.html

JamesB37 (California)
Posts: 351
Posted:
Liz
As the article points out, they probably won't do much, but it just may get your Board's attention and there isn't any cost involved:

"The California Attorney General (AG) may be the “Chief Law Enforcement Officer” of our state but that department generally will not enforce the Act. In theory, the AG will investigate alleged violations of the Corporations Code (typically complaints that boards have refused to hold meetings or permit inspection of records) but, in reality, no one in the field consulted by this author has ever heard of the AG actually doing more than simply passing an owner’s objection on to HOA operations and requesting a response."

https://echo-ca.org/article/what-happens-when-boards-violate-davis-stirling-act/

LizD3 (California)
Posts: 200
Posted:
Thanks, James. Very helpful!

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