Mediate Claims Against Homeowner Associations

   I received an email a few weeks ago from a homeowner who wanted to file suit against his homeowner association. I suggested that he might want to review the CC&Rs which may require an alternate method of dispute resolution, and which usually contain an attorney fee and cost provision. I also advised him of Civil Code section 1354 which provides that in any action to enforce the governing documents of a common interest development — the pevailing party shall be awarded reasonable attorney’s fees and costs.

   I suggested to him that the last thing he wanted to do was to sue his homeowner association – that he should find a way to resolve his dispute short of filing a lawsuit. I suggested mediation as an option. I told him that the association usually comes out the winner in a lawsuit because of the powers granted to it in the governing documents and because of its superior financial strength. I also advised him that an award of substantial attorney’s fees and costs in favor of the association is always a possibility. [See, California Attorney’s Fees.]

   He was unmoved. I was struck by his attitude that lawsuits are “fun” and his statement that he would enjoy the battle. He seemed dead-set on pushing ahead. His whole attitude seemed wrong to me and, because of it, I was unwilling to explore the matter further with him.

   Litigation should be the last resort, not the first. It is always a roll of the dice — particularly when trying to anticipate how much it will cost in terms of time, emotion, and actual attorneys’ fees and costs. Complaints beget cross-complaints and the law of unintended consequences sometimes results in neither side achieving a desired result.

   One of my first questions for any client, when the matter involves a dispute and potential or actual litigation is: “Have you explored settlement?” The response is more important to me than the merits because early on the merits of any case can be illusive. I know my client will have the greatest satisfaction from my representation the sooner the matter resolves upon acceptable terms. The response to that simple four word question, and the resulting discussion which follows, charts my course and is frequently the most important factor governing the amount of my required retainer.