With dozens—and sometimes hundreds—of people living in a community governed by neighbors, acquaintances and friends, it should be no surprise that disputes occur in condo buildings from time to time.
The possibility of disagreements among residents, boards and even vendors is there, and when those disagreements arise, the specter of litigation can loom large over the affected parties, creating worries on costs, both financial and in terms of time, as well as concerns of bad feelings and an uncomfortable environment for the community as a whole. There are plenty of reasons to find other ways to settle disputes before getting lawyered up and going to court.
Fortunately, alternative dispute resolution (often called simply ADR) offers two options—mediation and arbitration—for settling and moving on from issues. Both are effective and can help shareholders, unit owners and boards resolve thorny issues without either party ever setting foot before a judge. In fact, New Jersey's Condominium Act requires that boards offer mediation as an alternative before the feuding residents or resident and board head to court…more on that later.
Common Points of Contention
Although any incident can spark a conflict in a close-knit co-op or condo community, some things happen more frequently than others. “Disputes arise with shareholders versus shareholders and shareholders versus owners,” says Jeffrey T. Zaino, Esq., vice president for the American Arbitration Association, based in New York. “The most common [conflicts] are shareholder versus owners for problems in their condo.”
The issues at the root of these conflicts vary widely. They can include “disagreement over an action the board has taken—redoing the lobby or hallways is a particularly contentious example,” says attorney Phyllis Weisberg, a partner with the law firm of Montgomery McCracken Walker & Rhoads LLP, with offices in New York, New Jersey, Delaware, and Pennsylvania. “(Or) the board’s failure to resolve a dispute one shareholder has with another shareholder, such as over noise, governance issues, failure to make certain repairs, or disapproval of a planned alteration.”