FACT SHEET: NEW LAW PROVIDES FOR FAIR HOMEOWNER DISPUTE RESOLUTION
Click here for printable fact sheet: AB 1738 (Chau) Common interest developments: dispute resolution
Background: The Davis-Stirling Common Interest Development Act (“Davis-Stirling Act”) governs the management and operation of common interest developments (CIDs) such as condominium complexes. CIDs are governed by a homeowners association (HOA). Conflicts often arise among homeowners and the HOA board of directors regarding interpretation of the governing documents and operating rules. Established informal dispute resolution (IDR) procedures provide an initial opportunity for homeowners to meet and confer with a HOA board member to resolve any dispute and avoid later litigation.
Old law: There are no provisions in the law specifically permitting either the HOA or the homeowner to be accompanied by another person at an IDR, including an attorney, to provide guidance and to assist in the negotiation process.
Issue: Often, the HOA is represented by legal counsel at the IDR while the homeowner has no legal representation. The homeowner may lack experience and understanding of the HOA documents, thus placing him or her at a disadvantage.
New law: HOAs are required to have fair dispute resolution procedures, including requirements to meet and confer, and allowing parties to be represented by counsel, with advance notice and at their own expense. Homeowners may bring an advocate with them to an IDR session with the HOA board of directors. An advocate for the homeowner can be a fair housing expert, a community mediator, a neighbor who witnessed events, or an attorney paid for by the homeowner.