HOW TO SET UP AN ALTERNATIVE DISPUTE RESOLUTION …

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CAI DIY ADR HOW TO SET UP AN ALTERNATIVE DISPUTE RESOLUTION PROGRAM

Tobey OxholmJust Resolutions ADR

Gouldsboro, PAwww.JustResolutionsNEPa.com

[email protected] ~ 215.783.2329

Outline

• Goal for Today’s Program

• The New Law and Who It Applies To

• What HB 595’s All About

• DR vs ADR

• What Would Satisfy HB 595?

• Beyond 595

• ADR 4.0

• Decisions to be Made

• Q&A

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Goal for Today’s Program

You will learn what you need to know about ADR and leave with an ADR procedure that you can recommend to your community association that should satisfy the new law {HB 595/Act 17 of 2018}

Who Does The New Law Apply To?

Any planned community/condominium/co‐op “established after the effective date of this section shall adopt bylaws in compliance with this section.”

Effective date of Act 17 of 2018:

July 4, 2018

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Thanks for coming!

Not entirely …

One important global change:

§ 5412. Effect of violations on rights of action.

If a declarant or any other person subject to this subpart violates any provision of this subpart or any provisions of the declaration or bylaws, any person or class of persons adversely affected by the violation has a claim for appropriate relief. Punitive damages may be awarded in the case of a willful violation of the subpart and, if appropriate, the prevailing party may be entitled to an award of costs and reasonable attorney fees.

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… and one new Definition

"Unit owner in good standing." A unit owner who is current in payment of assessments and fines, unless the assessments or fines are directly related to a complaint filed with the Bureau of Consumer Protection in the Office of Attorney General regarding section 5308 (relating to meetings), 5309 (relating to quorums), 5310 (relating to voting; proxies) or 5316 (relating to association records).

ADR under the amended UPCA § 5322

(a) General rule.‐‐A unit owner in good standing may file a complaint with the Bureau of Consumer Protection in the Office of the Attorney General in the event of a violation by the declarant or the association of sections 5308 (relating to meetings), 5309 (relating to quorums) and 5310 (relating to voting; proxies) [and 5316 (relating to association records)]

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When Complaints Can Be Filed With the AG

(b) Condition.‐‐If an alternative dispute resolution procedure is available to the unit owner under the association's declaration, bylaws, rules or regulations, a complaint may not be filed by a unit owner with the Bureau of Consumer Protection until the earlier of:

(1) the unit owner exhausting the [ADR] procedure without a resolution…; or

(2) at least 100 days have passed since the unit owner commenced the [ADR] procedure and the unit owner and association having not reached a resolution.

(c) Immediate filing.‐‐A complaint may be filed by a unit owner with the Bureau of Consumer Protection immediately if:

(1) an [ADR procedure] is not available …; or

(2) the association refuses [ADR]

Reminder

§5321(c)

Nothing in this section shall be construed to affect or impair the right of a unit owner, declarant or association to pursue a private cause of action or seek other relief, as authorized by law.

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What HB 595’s All About

DR vs ADR

So …

what, exactly, is ADR?

… and what is DR?

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DR

What “Going to Court” Really Looks Like

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Going to Court (The Clients’ Perspective)

Going to Court (Your Treasurer’s Perspective)

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Going to Court (Your Manager’s Perspective)

Definition #2

HB 595 Definition of ADR

"Alternative dispute resolution." A procedure for settling a dispute by means other than litigation, such as arbitration or mediation.

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ADR as Risk Management

Origins of DR

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ADR AOL

Other ADR

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ADR: Good Enough For World Championships

One ADR Alternative for HB 595

In your Bylaws:

Any dispute arising out of or relating to Title 68, section 5308 (relating to meetings), section 5309 (relating to quorums), section 5310 (relating to voting; proxies) or section 5316 (relating to association records) shall be settled by flipping a coin, with the unit owner calling heads or tails and the Association president doing the flipping.

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ADR Alternative #2 for HB 595

In your Bylaws:

Any dispute arising out of or relating to Title 68, section 5308 (relating to meetings), section 5309 (relating to quorums), section 5310 (relating to voting; proxies) or section 5316 (relating to association records) shall be settled by [mediation] [arbitration].

Definition ##3 and 4

Arbitration – “The hearing and determining of a dispute or the settling of differences between parties by a person or persons chosen or agreed to by them.” –dictionary.com

Mediation ‐ “The deliberate and knowing use of a third person by disputing parties to help them reach a resolution of their dispute.” –42 Pa.C.S. § 5949

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Results of Arbitrations and Mediations

Arbitrations Mediations

Another ADR Option

Independent Factfinder

Neutral Factfinder

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HB 595’s Areas of Concern:What Kind of ADR Works Best?

• section 5308 (relating to meetings)

• section 5309 (relating to quorums)

• section 5310 (relating to voting; proxies)

• section 5316 (relating to association records)

Alternative #3 for HB 595

In your Bylaws:

Any dispute arising out of or relating to Title 68, section 5308 (relating to meetings), section 5309 (relating to quorums), section 5310 (relating to voting; proxies) or section 5316 (relating to association records) shall be settled by having Tobey decide.

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ADR Alternative #3A for HB 595

In your Bylaws:

Any dispute arising out of or relating to Title 68, section 5308 (relating to meetings), section 5309 (relating to quorums), section 5310 (relating to voting; proxies) or section 5316 (relating to association records) shall be decided by a neutral factfinder selected by [agreement] [the unit owner] from the Monroe County Bar Association ADR Panel.

Sources of Neutrals

CAI chapters/members ‐and‐ Open Forum

http://www.monroebar.org/index.cfmPublic Resources – “ADR”

American Arbitration Association –arbitration and mediation panels

Association for Conflict Resolution –Greater Philadelphia Chapter

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What Kind of ADR Works Bestin Other Situations?

§5321(b) Procedures.‐‐

(1) The bylaws shall establish procedures for an alternative dispute resolution for disputes between:

(i) two or more unit owners; or

(ii) a unit owner and the association.

(2) Alternative dispute resolution shall be limited to disputes where all parties agree to alternative dispute resolution.

… between 2 or more unit owners…

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ADR Alternative #4.1

In your Bylaws

Alternative Dispute Resolution (ADR)

1. General Rule – In the interests of achieving a just, speedy and inexpensive resolution of the dispute, and except as provided below in sections 2 and 3, before commencing a lawsuit against an Owner or the Association, the Association and any Owner shall make a good faith effort to resolve the dispute by discussing same with the appropriate party or parties, either directly or through mediation; and/or by employing a neutral investigator or arbitrator to render a decision binding upon all parties. Unless otherwise agreed in writing, the facts as found by the factfinder, and the decisions rendered by the arbitrator, shall be binding on the parties in the absence of fraud.


2. HB 595 Complaints. Any dispute arising out of or relating to Title 68, section 5308 (relating to meetings), section 5309 (relating to quorums), section 5310 (relating to voting; proxies) or section 5316 (relating to association records) shall be decided by a neutral factfinder.

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3. Neutrals – The parties shall agree on the person to serve as the neutral factfinder, mediator or arbitrator in the resolution of their dispute. In the absence of agreement, the unit owner shall make the selection from the Monroe County Bar Association ADR Panel.


4. Exceptions. The requirement that the parties first attempt to resolve their dispute by ADR before commencing suit shall not apply:

a. in circumstances requiring immediate or equitable relief, or

b. to disputes related solely to a member's failure to timely pay an association assessment or any fines or fees associated with the levying or collection of an association assessment are not covered under this section.

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Who Pays for the ADR?

§5321(b) Procedures.‐‐

(3) Costs and fees associated with alternative dispute resolution, excluding attorney fees, shall be assessed equally against all parties to a dispute.

Question: When paid?


5. Costs. Costs and fees associated with ADR, excluding attorney fees, shall be assessed equally against all parties to a dispute. Prior to commencement of the ADR, each party shall deposit the sum of $500 with the Community Manager as an advance to cover their pro rata share of the costs of ADR. The Association shall pay the costs of ADR from such funds. Any amount not expended for the ADR shall be promptly returned by the Association to the parties, pro rata, without interest.

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Decisions To Be Made

• When are you willing to use ADR?

• What kind of ADR are you willing to use?

• Is the ADR to be voluntary or mandatory?

• Are the results to be binding or not?

• Should these be in your Declaration, Bylaws, or Rules and Regulations?

… or you can do nothing

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CAI DIY ADR

Questions – and – Discussion

Tobey Oxholm

Just Resolutions ADR

Gouldsboro PA

[email protected]

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HOW TO SET UP AN ALTERNATIVE DISPUTE RESOLUTION …

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