by Rosemary A. Macero and Christy L. Hepburn

For most of us, the thought of a disagreement or dispute with another person, especially with a neighbor, another unit owner or the Association management, causes us to break out in a cold sweat. The thought of returning home, after a long day at work, only to be reminded of problems at your condominium, makes your home a source of constant irritation, anger and frustration, instead being a peaceful and secure place for you and your family. Unfortunately, these disagreements and disputes do arise between neighbors and unit owners for a variety of reasons. Whether it is an issue like noise, odor, a barking dog or property maintenance and repairs, late common area payments, rule enforcement or a contractor who walks out on an incomplete job, calling an attorney every time there is a disagreement or dispute and taking it to Court is just not realistic and is downright expensive. If the disagreement can not be worked out between the parties, before the situation deteriorates, Mediation and/or Arbitration are more cost effective and efficient ways to solve the problem.

What is Mediation and why should I consider it to solve my disagreement with my neighbor or my Association? Mediation is the use of a third party, not to decide the disagreement or dispute, but to assist the parties in finding a mutually agreeable solution to the problem. Mediation is basically an informal meeting organized for the parties to air the problem and then with the assistance of a neutral third party, acting as the Mediator, the parties find a common ground to resolve the problem. After the airing of the positions, the Mediator meets privately with each party and assists the party in determining agreed upon points, which may become the basis for a mutually agreeable solution. As long as both parties are sincere in their desire to achieve a resolution, can compromise and act in good faith, disagreements can be resolved. No one wins and no one loses. Both parties compromise their position in order to achieve a solution.

Mediation is the best way to come up with an agreed upon solution instead of an imposed solution. The information shared at the mediation and the statements of the parties are made in confidence and cannot be used by either party if the problem is not resolved. The Mediator and the confidences made at mediation are protected from later disclosure by state law. This confidentiality is designed to provide a forum with an exchange of issues and ideas so that the parties can come up with a creative solution which both can agree to and live with.

There is no decision by the Mediator. The parties must agre on the compromise. If the parties are unable to reach a solution or settlement through mediation, they still can arbitrate and/or litigate to obtain a decision and there is winner and loser in the disagreement. As long as the parties agree to mediate and participate in the mediation in good faith, there is nothing that prevents a compromised result. The parties design the solution.

What happens if both parties are too stubborn or too convinced that each is completely right and the other is completely wrong. If there can be no compromise, the parties need a decision. To get a decision, the parties generally have to go to Court, which means hiring lawyers, spending money and taking the risk that their position is wrong and the other side is right. We all know that it takes a long time to get your day in Court and the longer it takes the more it costs. Arbitration can provide a cost effective and quicker decision to the disagreement or dispute.

What is Arbitration and how do I get one? Arbitration is a private out of court process which the parties must agree to enter to decide the dispute. Unit owners and/or trustees can deal with condominium disputes more quickly and more cost effectively in arbitration. Unless the disputes arises out of a contract which obligates the parties to arbitrate, instead of pursuing the claims in Court, such as financial brokerage contracts, contracts with general contractors and insurance policies, all of which commonly contain an “arbitration clause”, the parties must agree to arbitrate. Although most condominium documents to not contain an arbitration clause, the parties to a dispute can agree between themselves to submit the dispute to arbitrator instead of a Court. If the parties agree to arbitration, the parties should sign a document agreeing to arbitrate the dispute between them.

If you are a unit owner or a trustee of a condominium association, arbitration of the dispute can reduce the expenses associated with attorneys’ fees arising from a potential long and drawn-out litigation process. Arbitration is not the same as a court case, but it will produce a decision. The parties present their dispute and their side of the dispute to one or more neutral third parties. Unlike a mediation, in which the neutral third party is helping the parties to get a compromise solution agreed upon by the parties, the Arbitrator hears the evidence presented by the parties (the documents, the statements of the parties and witnesses) and the Arbitrator makes a decision as to who wins and who loses. It is a final decision of the dispute and the parties have agreed in writing in advance of the arbitration to live with the decision and to abide by the decision of the Arbitrator, who is the final decision maker in that process. Simply put, outside of the Courts, arbitration is the most traditional form of binding dispute resolution.

The arbitration process is similar to a court hearing in that the Arbitrator will “conduct” a contested hearing between the parties to the dispute. The arbitration process is often described as trying your case seated at a conference table. The party with the complaint or dispute presents its position, including witnesses and documents, to the Arbitrator. The other side then has an opportunity to present its position. The Arbitrator can permit each party to question the other and the other side’s witnesses. When each party has completed its presentation, the Arbitrator takes all of the information and the statements of the witnesses (in court this is referred to as testimony) and the documents, and makes a decision. Since the parties have agreed to abide by the Arbitrator’s decision, if the losing party fails to carry out the decision within the time period required, the winning party can have a Court enforce the decision. The case filed to enforce the Arbitrator’ decision does not involve or permit the case to be retried or new information to be presented. Unless there is fraud or some provable wrongdoing by the Arbitrator, the Court will enforce the decision of the Arbitrator.

Where do you find an Arbitrator and what are the rules of Arbitration? There are many private organizations which offer arbitration services, including the Condominium Association Institute, which has an arbitration program in place. These private groups maintain lists of available Arbitrators so that an impartial Arbitrator can be selected from the list. Some arbitration organizations have standing rules which apply to the arbitration process.

Choosing an Arbitrator can be the most important step in the arbitration process. It is important to choose an impartial Arbitrator who may bring some knowledge to the decision making process. The selection of a knowledgeable, neutral Arbitrator will enhance the prospect of a fair and just outcome. Lawyers are commonly selected as Arbitrators. In condominium disputes, the parties could choose an impartial Arbitrator who is a property manager, an individual who serves or served as a Trustee (not at their Association) or even an individual who is or has been a unit owner in a similar size or type association, since each of these individuals may also bring a knowledge of condominium issues to the dispute, which will permit a logical and impartial decision to be made. What is most important is that you choose an impartial and unbiased third party with the ability to act fairly and has some knowledge base to be competent to arbitrate the matter in dispute.

One of the more important decisions that the parties will make if they agree to arbitrate is how many Arbitrators will hear the case. In a case of a modest monetary size, the cost effective advantage of arbitration may be undermined by the use of three Arbitrators, since each of the Arbitrators will need to be paid by the parties. So, in effect, the savings and the speed of the process, can be jeopardized if the parties opt for a three Arbitrator panel, because the dispute size will remain the same, but the costs of the Arbitrators and the scheduling will be more difficult by the addition of each additional Arbitrator. You may wonder why the option of two Arbitrators is not presented. Two Arbitrators creates the possibility of a split decision and that defeats the purpose of the process, which is to get a decision of the dispute.

There are many potential advantages to arbitration. The advantages to arbitrating a dispute include: less stringent and less formal rules of evidence, less expensive and faster than the Court and control the issues to be decided. There is no mandatory pre-arbitration exchange of information or other time consuming and expensive devices, such as depositions, unless of course the parties agree that some early document exchange or depositions should happened to shorten the presentation of the dispute. Additionally, the arbitration proceedings and award are often private, as opposed to a Court proceeding. This privacy can permit more sensitive issues to be handled without documents or details being available to the public.

Living in a community association presents challenges and benefits, which can be different than those commonly associated with single family homes. There is a real premium on cooperation and compromise with ones neighbors, unit owners and trustees. Reasonable people should always be able to fashion a reasonable compromise, but sometimes the assistance of an impartial third party is useful as a Mediator to help fashion a compromise between the parties. If a decision is necessary, an Arbitrator to decide the dispute is a logical and cost effective process which will permit the parties to put the unpleasantness behind them and get a quick and impartial decision of the dispute. Your home is your castle don’t let it become a prison, mediate or arbitrate your condo disputes.

Rosemary A. Macero and Christy L. Hepburn are attorneys with Macero & Associates, P.C., in Boston, Massachusetts. Macero & Associates, P.C. represents various Condominium Associations, trustees and unit owners in connection with disputes and in the Courts. Attorney Macero is an Arbitrator with the Better Business Bureau.