Condo talk: Mediation of association dispute can keep case out of court

Emotions often run high in disputes between an association and a unit owner, or between unit owners. These disputes typically arise from an association’s claim that at owner has violated the declaration, bylaws, or rules and regulations, or an owner’s claim that the board has breached its fiduciary duty or some specific provision of the association’s declaration by the board. Disputes between unit owners can develop, for example, from unit-to-unit “noise disputes” or water leaks.

Over the years, I have witnessed an explosive increase in the number of non-assessment related disputes between an association and unit owners, and between unit owners (that the association gets pulled into). Many of these disputes, if not quickly settled, end up in expensive, protracted, and time-consuming litigation, before judges that are less than embracing of these types of cases. Parties to such legal conflicts in associations should at least consider alternatives to the courthouse.

Alternative dispute resolution is a generic term for any method utilized to resolve a legal dispute other than the traditional litigation process. Alternative dispute resolution is generally initiated voluntarily when discussions between parties fail to result in settlement of the conflict; however, the governing documents of an association may require mediation or arbitration for certain controversies. The two most common forms of alternative dispute resolution are mediation and arbitration. I will focus here on mediation.

Mediation is a relatively informal process in which the parties agree to enlist the assistance of a neutral third party whose task is to assist the parties in their quest for a voluntary settlement. The mediator does not typically express his or her own views on the merits of each party’s position. Rather, the mediator is a facilitator and his/her primary function is to help the parties reach agreement by identifying issues, exploring possible basis for agreement, describing the consequences of not settling, and encouraging each party to consider the interests of the other party.

Mediation, as an alternative to adversarial proceedings legal proceedings, may serve to more quickly resolve disagreements at a lower cost, and preserve long term relationships between neighbors. The latter can be particularly important. The parties to a dispute in an association will likely continue to have some degree of contact with one another after the dispute is resolved. A less formal method of resolving a dispute can decrease the possibility of long-term animosity.

The parties to mediation must be receptive to the input of the mediator, who may suggest that a party make concessions. Mediation works well when the parties are prepared to compromise and are reasonable. The mediation process will only succeed if each party to the conflict works toward its resolution.

Mediation may not be particularly effective if the dispute between the parties is intense, if the parties are looking for an all-or-nothing solution (especially when the allegations are disputed), or if a party is not rationale or reasonable.

The importance of having an experienced, skilled mediator who has an understanding of association issues and law cannot be overstated. Many attorneys and other specialists provide mediation services. A seasoned mediator will attempt to work out an agreement that seeks to resolve the immediate controversy, as well as alleviate tensions between the parties. For this reason, mediation may be particularly useful in an association setting since the parties will likely continue to have a relationship long after the matter in dispute is resolved.

Some association governing documents require mediation for disputes arising out of a violation of the declaration, bylaws, or rules and regulations of the association, and for certain monetary disputes. Mediation provisions can be in the original declaration, or added by way of an amendment. Of course, any dispute not required to be mediated by an association’s governing documents can be mediated by agreement of the parties to the dispute. Mediation is not particularly well-suited for nonpayment of assessment issues. In Illinois, there is already an expedited and summary proceeding to deal with nonpayment of assessments — the forcible entry and detainer action.

There is no guarantee that mediation will provide an advantage over traditional litigation. A careful analysis needs to be made, with the assistance of counsel, to determine if the nature of the dispute and the attitude of the parties are appropriate for mediation. A successful mediation will result in a written, signed enforceable settlement agreement, and compliance, by the parties, faster and at a lower cost than traditional litigation. Failed mediation, whereby the parties then resort to traditional litigation, will only serve to increase the cost and time necessary to resolve conflict. Nonetheless, mediation is certainly an alternative worth considering.

Ÿ David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.