How does alternative dispute resolution apply to a community association?
Alternative dispute resolution may consist of mediation or arbitration (binding or non-binding). Neither an association nor an owner may file an enforcement action against the other in Superior Court unless the parties have endeavored to submit their dispute to alternative dispute resolution. Alternative dispute resolution applies only to an enforcement action that is solely for declaratory, injunctive or writ relief, or for that relief in conjunction for a claim for monetary damages. Alternative dispute resolution does not apply to a small claims action for $10,000 or less. Alternative dispute resolution does not apply to an assessment dispute.
The process is begun by service of a request for resolution. A request for resolution must contain a brief description of the dispute, a request for alternative dispute resolution and a notice that the party receiving the request for alternative dispute resolution is required to respond within thirty (30) days of receipt or the request will be deemed rejected. If the party upon whom a request for resolution is served is the owner of a separate interest, a copy of the alternative dispute resolution statute must be attached to the request for resolution.
Alternative dispute resolution must be completed within ninety (90) days after acceptance of the request for resolution. The cost for alternative dispute resolution is shared equally by the parties.
At the time of the commencement of the enforcement action, the party commencing the action must file with the initial complaint, a certificate stating that alternative dispute resolution has been completed, one of the parties did not participate in alternative dispute resolution, or preliminary or temporary injunctive relief is necessary. The failure to file such a certificate is grounds for a demurrer or a motion to strike, unless the court finds that dismissal of the action for failure to comply would result in substantial prejudice to one of the parties. In an enforcement action where fees and costs may be awarded, in determining the amount of the award, the court may consider whether a party’s refusal to participate in alternative dispute resolution before commencing the action was reasonable.
See also: Pinnacle Museum Tower Association v. Pinnacle Market Development (2012) 55 Cal. 4th 223, where the homeowner association developer was permitted to enforce the arbitrator provision in the CC&R’s, even though the association was not created when the CC&R’s were recorded; Grossman v. Park Fort Washington Association (2012) 212 Cal. App. 4th 1128, where the court held that attorneys fees and costs of alternative dispute resolution prior to litigation were recoverable costs in litigation; and Ryland Mews Homeowners Association v. Munoz (2015) 234 Cal. App. 4th 705, where the court held that a failure to serve the owner with the alternative dispute resolution statute would not bar claim.
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