The better solution is the HOA Dept described by Proposed Legislation #2
Corrupt HOA Board Members generally attempt to run the homeowner out of money before ever going to court. This is a common practice even if they know they are unlikely to win. Homeowners must pay for their own attorney and in ADR and Mediation must also pay half of the ADR or Mediation fee. Board Members are at no risk as they can use the collective funds of the HOA or the insurance of the HOA to pay for their attorney fees and mediation costs. ADR and Mediation wastes homeowner money and time and doesn’t create an agreement that is enforceable without going to court anyway.
ADR or mediation costs are not recoverable in a lawsuit even if the homeowners win, and Board Members don’t pay the ADR costs even if they lose, the whole HOA pays. So, win or lose the homeowner is in effect fined and if they win this can often cause a rift between the homeowner in the lawsuit and the other innocent homeowners. The homeowner is at risk of losing their life savings and maybe their home but the Board Members are at no risk. That is an intense imbalance of power in mediation or ADR.
Even if the HOA is required to pay the total cost of the ADR, the fact that the HOA is paying an outside vendor of ADR services, means that ADR organization will get more business if they rule in favor of the HOA. That is an automatic conflict of interest. There can be no neutral parties as ADR or Mediation agencies.
Even if a government created agency is the ADR, why bring in another agency when you need the State HOA Office to enforce it anyway. Make good laws and let the State HOA Office enforce the laws, as described in our #2 Proposed Legislation at https://www.hoareformleaders.com/
During ADR or mediation, the HOA Board and attorney can say anything they want to you including threats, and that information can not be presented in court. This allows the HOA high levels of intimidation in ADR.
In most situations ADR doesn't make sense. If the homeowner has done something that violates the covenant, and all is done fairly and reasonably, they should pay the fine and be done with it. If the HOA Board Members have knowingly violated the laws or the governing documents, the Board Members should pay for the damage they have done and be removed from the Board.
The Board Members should not be given a free chance to threaten and bully the homeowner through ADR or Mediation into agreeing to accept the illegal actions of their Board out of fear of losing their life savings and/or their home. These issues are generally pretty straight forward, either the HOA is following the law or it is not. Why would the HOA be allowed to intimidate the homeowner into paying a smaller fine or to agree to pay for part of the roof repair, if the HOA is in the wrong?
Creating a State HOA Dept as described in our #2 Proposed Legislation is a much better solution. Solutions to HOA problems would be quick and very low cost. The HOAs would pay for the State HOA Office completely so no money would come out of the State Budget. And the process would likely save the State money as these cases would not eat up court time.
The State HOA Office attorneys, as the only thing they would be doing is enforcing HOA laws, will know the HOA laws much better than any ADR administrator. Thus, the decisions will be more fair and law abiding, and much faster and less expensive for all parties. The State HOA Office would save the courts a tremendous amount of time and money. Just like any other regulatory agency situation, the HOA Board Members or the Homeowner could appeal the decision in court. However, we expect this would be a rare occurrence.
See HRLNGs State HOA Office Proposal at HOAReformLeaders.com, scroll down to #2 in the list, and click it to see the detail.