Without a board of directors, a community association would cease to function. Many associations are challenged to find enough volunteers to serve on the board because some owners are fearful of being sued or becoming involved in litigation with a contractor or, more worrisome, a neighbor. Some boards believe they must sue on principle rather than attempt to amicably resolve an issue. I believe that negotiating is the first action that all boards should consider in order to settle association disputes.
Ask any board member, community manager, insurance agent or attorney what the number one legal and financial recommendation is. Without doubt, all will tell you to avoid litigation. Litigation is costly and time consuming. More times than not, neither side ends up getting what it wants. Certainly, there are times when litigation is the only recourse, but I’m convinced that most problems can be resolved through negotiation. After many years of experience in managing community associations, I can personally affirm that negotiation resolves most issues at lower cost and less angst to the association and the owners.
Collecting delinquent assessments is a major problem in most community associations during these difficult economic times. Rather than quickly referring delinquent owners to a collection attorney, first try to negotiate with the owner. Community association boards have the authority to consider and offer payment plans to owners who have clearly displayed a financial burden and a willingness to bring their account current if allowed to stretch out their payments. The board should ensure that a lien is filed of record and that the payment plan agreement is executed in writing by both parties. If everything works out as anticipated, the account becomes current, the board carried out its fiduciary duty to the association, and the delinquent owner greatly appreciates the fact that the board was understanding and compassionate. And, the association did not expend time and money on litigation!
Enforcing an association’s governing documents is another example of first attempting negotiation before resorting to litigation. Successful community associations have clearly written policy resolutions establishing procedures for rules enforcement, including conducting hearings and an appeals process. Many rules violations can be resolved through negotiation. Most homeowners truly appreciate a manager and/or board who will take the time to explain a rule violation and why a citation was issued. Calm, intelligent, nonconfrontational conversation really works. Being fair, reasonable and consistent, and approving variances when appropriate, results in a respectful and rewarding relationship among a community’s residents and volunteer leaders.
These are just a few examples of why it is best to negotiate first and litigate only as a last result. Let’s focus on the kinder, gentler approach and save your association money!!