On to Alternative Dispute Resolution

Things are getting more interesting now; the discussion has moved to whether or not mediation works.

A few lawyers are saying that it never works; most lawyers are in jurisdictions where mediation is mandatory. Benny Kass is speaking favorably of the process; he laments only that mediation comes at the end of the case. There seems to be a consensus in the room that if mediation fails, it is often due to poor choice of a mediator.

On to leasing restrictions… Once again, participants are talking about “rental prohibition regret” — the situation where partially vacant associations are wishing that they could allow rentals, in order to stop or slow foreclosures, or provide for some income that might allow for the payment of assessments. A panelist who will remain unnamed is suggesting, with a chorus of “boos” that “A board doesn’t necessarily have to follow its bylaws.” The contention is that the times warrant the action. Jim Strichartz is suggesting that boards should seek adoption of temporary moratoriums on enforcement. Another participant reminded that any such hardship should be conditioned upon continued payment of assessments.

Similarly (as discussed yesterday), what about the age-restricted communities? First and foremost, associations are reminded not to lose their exemption status in connection with the granting of such hardship exemptions.

Another suggestion: Can a board exercise its business judgment, in light of financial difficulties, not to pursue enforcement of violations during the financial crisis? Most panelists (and I) think that’s a rather scary proposition, because it might lead to widespread violations, which could lead to waiver of the provision.

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