Resolving disputes before going to court

Someone once said, "Conflict represents an opportunity." Many interpret this to mean an opportunity to outsource the resolution to a judge or jury. However, a whole realm of conflict resolution lies before taking a claim to court. This article discusses some tips and techniques for resolving a dispute before going to court.

Sometimes, a dispute arises regarding the interpretation and/or application of specific governing document provisions. For example, an ambiguity may exist within covenants on whether occupants of a house are members of the homeowners association and therefore able to vote in board elections. Before going to court, the owners within the neighborhood may resolve the issue themselves by amending the covenants to expressly provide for who gets to vote. In the event an amendment is not practical or possible, then the dispute may be sent to court for a declaratory ruling.

Other times, the association or owners have already paid for some form of conflict resolution. For example, if my neighbor has a dog that barks incessantly, a city ordinance may cover such an issue, and I have paid through sales or property taxes for government to assist me.

Speaking of barking dogs, fences, parked cars, and whole host of other issues, the very first step in any conflict resolution is for the parties directly influencing and influenced by the matter to speak plainly and personally to one another. Recognizing that life happens all the time, circumstances may be explained in this initial conversation. Understanding may be reached that was not apparent before speaking with one another. Simply talking with one another, even after folks have hardened their positions and vilified the other party, has an almost miraculous effect on moving a conflict closer to resolution.

Now come some bulleted tips for conflict resolution:

• Think about the heart of the issue and how the other person might respond to your requests prior to speaking to the person.
• There is a difference between availing yourself of wise counsel and gossip; seek the former and avoid the latter.
• Sometimes involving a neutral third party, like a mediator, can assist parties in the resolution of their dispute.
• Legal fees and court costs add up. You and your adversary may be able to use those dollars for a resolution rather than seeking recovery of them in court.

I know, "Easier said than done." It may be that your words do not come out the way you wanted or practiced them. It may be that your attempts at settling your dispute with your neighbor aren't met with the same enthusiasm you expected. However, remember that there are no magic words for settling a dispute. As long as you and the other party remain in control of the dispute (i.e., you haven't yet submitted the claim to a court), the parties remain in control of the resolution. And who doesn't like control?

2010 Neighborhood Alliance Basic Legal Issues for HOAs slides

Here are the power point slides for the 2010 Neighborhood Alliance Basic Legal Issues for HOAs presentation: Download NA Basic Legal Issues For Homeowners Associations Workshop - 2010 - June and July

Matthew L. Winton, community association lawyer.

Oklahoma State Association of Parliamentarians 2010 Seminar - Slides

Download 2010 - Oklahoma Parliamentarian Workshop for the slides of my 2010 Oklahoma State Association of Parliamentarians presentation on Oklahoma condominium and homeowner associations, corporate law, and parliamentary procedure.

Thanks to Rod Davidson, professional registered parliamentarian and 2010 president of OSAP, for a great educational weekend.

When green meets the black letter…

In recent years, society has seen an increased interest in the "green movement."Loosely defined, the green movement seeks to incorporate more sustainable and Earth-friendly building and living practices into daily life. How does this comport with established guidelines for living within common interest communities?

For example, one aspect of green living may be to eschew the machine dryer for a clothesline. Yet, many if not a significant majority of real property covenants on file restrict clotheslines. What about edible landscaping? Perhaps such landscaping design doesn't meet the community's standard for yard maintenance. How are we to reconcile the urge to live more softly within the common interest community framework?

Of course, the community may amend their governing documents to expressly allow certain sustainable practices. But, governing document amendment projects may be difficult or impossible depending on the interest level among the owners. In some areas, legislation is being adopted to "trump" restrictive covenants, such as laws expressly allowing solar panels and private wind generators to be installed on lots within community associations. Some owners simply ignore covenants risking lawsuit – see for example the story of one Flower Mound, Texas couple who did just that (the link isn't to recommend this course or endorse either the owner or HOA, or any comments to the story).

For further thoughts on this topic, several blog articles exist: how to help your condo board go green; green your HOA; integrating solar installations.

Matthew L. Winton, Esq.

Practicing community association law since 2000

Slides for 2010 Edmond Neighborhood Alliance Summit

If you want a prior look or will be unable to attend the ENA Summit on February 27, 2010 at the Edmond Multi-Activity Center (the MAC), here are the slides [Download ENA Legal Seminar - 2010] for my breakout session.

Matthew L. Winton, Esq. - Oklahoma condominium and homeowner association lawyer

Leadership Training Available through Central Oklahoma Neighborhood Alliance

Neighborhood Alliance (NA), an Oklahoma City based nonprofit resource for community associations offers free leadership courses. Space is limited and much sought after, so get your application completed here or register online. From the NA website at www.nacok.org:

Neighborhood Alliance is accepting applications for their 2010 "Neighborhood Leaders for Today" leadership course.  This 8 week course begins on Thursday, February 25, 2010 and meets from 6pm -9pm every Thursday evening through April 15 (graduation).  The schedule also includes two Saturdays, TBD, 9-4pm.  The class is free of charge and is limited to only 30 participants.

This one-of-a-kind leadership program is designed to give citizens the tools they need to create, promote and sustain productive citizen-based neighborhood associations and to help create sustainable community improvement projects.  Utilizing over 30 community leaders as guest speakers, the class will learn the basics of grant writing, organizing crime patrol and crime watch programs, how to navigate City Hall, parliamentary procedures, establishing membership drives, effective communications, and team building.

Edmond Neighborhood Alliance 2010 Summit

On February 27, 2010 at the MAC in Edmond, Oklahoma the Edmond Neighborhood Alliance will host their annual summit. Attorney Matthew L. Winton of the law firm Vaughn, Winton & Clark^pllc will be presenting information at one of the break-out sessions regarding: real property covenants, changes in FHA rules, community association taxation and the law.

A link to an Edmond Sun article on the summit is here. More information regarding Matt Winton and his legal practice is found here.

New FHA loan rules for Oklahoma unit ownership estates (condominiums)

One result of the recent real estate troubles has been a heightened scrutiny of condominium loans. A result of this scrutiny is FHA revising, and re-revising, and putting on hold the rules that apply to approval of mortgages for condominium developments. Under the proposed rules, all FHA approvals for condo projects will expire every two years. Another aspect is some percentage limitation of FHA loans within the development, although the actual percentage doesn't seem to be fixed as yet. Also, the new rules will contain some minimum owner-occupancy requirement, which will be good news to many in projects that have started down the path of investor-controlled developments.

For a review of the initial rule, and then the subsequent rule, see Mortgagee Letter 2009-46A and Mortgagee Letter 2009-46B.

Matthew L. Winton, Oklahoma community association lawyer.

If your community association operates a swimming pool or spa, you should already know about the Virginia Graeme Baker Pool and Spa Safety Act

If your community association does operate a swimming pool or spa and you are not aware of the federal Virginia Graeme Baker Pool and Spa Act, you need to familiarize yourself with the Act and its mandatory requirements. The Virginia Graeme Baker Pool and Spa Act (named after former secretary of state James Baker's granddaughter who drowned because of a spa drain in 2002) was adopted in 2007 and is effective for all "public" pools and spas December 19, 2008. The Act includes condominium, homeowner association, and neighborhood swimming pools within the definition of public. The pool/spa must be compliant with the act before opening. Essentially, the Act requires existing pools to be retrofitted with certain drain anti-entrapment devices, and new pools must be constructed with such devices. The Act specifies the minimum requirements.

Should a pool/spa open in violation of the Act, severe civil penalties may be levied against the community association. Contact a qualified pool technician versed in the requirements of this Act before opening your community association pool this season.

Matthew L. Winton, community association attorney

Handouts for February 21, 2009 Edmond Summit – HOA Legal Issues Breakout sessions

On February 21, 2009 from 8:30 a.m. to noon, Edmond Neighborhood Alliance will be hosting their annual Edmond Summit at the MAC at Mitch Park in Edmond, Oklahoma, which is co-sponsored by the City of Edmond and Edmond Economic Development Authority. I will present two 40-minute breakout sessions on community association issues. Time will be saved for audience questions and we will discuss topics such as:

• Amending governing documents

• Conflict resolution

• Collecting assessments

• How to enforce structural and use restrictions

Handouts for the two breakout sessions may be viewed here.

Matthew L. Winton, Esq.

Vaughn, Winton & Clarkpllc

3233 East Memorial Rd., Suite 103

Edmond, Oklahoma 73013

mlw@vwlaw.net

405.478.4818 office

405.478.4819 fax

HOA Websites and Communications Services

For Oklahoma community associations looking for a web development/presence and communications service, Joy and Judy with okhoa.org provide such services. From their website:

"A website is like having a receptionist that never goes home, who doesn’t need time off, who doesn’t expect overtime pay, who will give out consistent, accurate information 24/7, professionally represents you to the public, never loses his/her patience, always a smile, and does this for an unbelievably low salary!

OK Hoa will provide you with a dynamic website that does this and much more!"

A link to their website is provided here.

Matthew L. Winton, Oklahoma homeowner association lawyer.

Vaughn, Winton & Clark, PLLC - Oklahoma attorneys

Developer transition article

For those interested or approaching the issue of transition time in a real estate development/homeowners association/condominium association, this 51 page article provides a wealth of information and examples.

Matthew L. Winton, Oklahoma homeowner association lawyer

Does an HOA board have to comply with the Fair Debt Collections Practices Act?

The topic of the Fair Debt Collections Practices Act came up at the recent OBA webcast on Oklahoma homeowner association law. Specifically, the question was:

Q - Do HOA boards have to comply with the Fair Debt Collections Practices Act?

A - The FDCPA is found at 15 USCA 1692 et. seq. By definition, a board member or officer of an HOA collecting the HOA's own debt is not a "debt collector" under the FDCPA. 15 USCA 1692(a). However, if for some reason the HOA sought to collect its own debt under an assumed name which would tend to make a consumer believe a third party sought to collect a debt, the HOA could be defined as a "debt collector" under the FDCPA - why an HOA would ever do this is beyond me.

Matthew L. Winton, Oklahoma homeowner association lawyer

Undefined terms in covenants

During the recent OBA webcast on Oklahoma homeowner association law, I was asked the following question:

Q - If the governing documents do not offer a definition of a particular term, such as "outbuilding," where would one go to find such a definition?

A - It may be that the context of the word used in the governing document suffices to remove any ambiguity in the intent of the drafter. Of course, governing documents should not only define key terms, but also use such definitions consistently throughout the patchwork of governing documents.

Courts will often look to Black's Law Dictionary or Webster's Dictionary for the plain meaning of words. If these efforts fail, it may be that there exists an ambiguity in the governing document, which must be resolved by resort to determining the drafter's intent, which may be satisfied by testimony or an affidavit from the developer or the drafting attorney.

Matthew L. Winton, Oklahoma 

Creation versus Organization of an HOA

This seems to be a popular issue this week. At both the OBA webcast this past Wednesday and at today's luncheon for the Central Oklahoma Association of Legal Assistants, I was asked about when an HOA is created.

A - It is my opinion that an HOA is created when "creation language" is filed of record with the county clerk. For example, the plat to an addition may provide for common areas and contain a plat restriction like, "All common areas shall be maintained by the property owners association. Each person owning a lot shall be a member of the association." While this language would be what I call barebones, I believe it sufficient to put a buyer on notice that there is an association in existence and that owners must be members of the association.

60 OS 852 uses the term "formed" for the association. It requires the association to be "formed" by the filing of a document specifying the obligations of owners to the association in a filed, acknowledged document with the county clerk. A plat or covenants filed with the county clerk containing specific membership and administration language serves this purpose.

Matthew L. Winton, Oklahoma homeowner association lawyer.

Foreclosure on attorneys fee judgment

During the recent OBA webcast on Oklahoma homeowner association law, I was asked the following question:

Q - If an HOA has sued an owner and received a judgment for attorney's fees, can the HOA file a lien and foreclose on that lien?

A - Generally, no. Unless the governing documents provide that fees and costs of the Association are lienable charges, the HOA must collect its judgment against the owner just as it would collect any other judgment. Homestead (presuming the owner lived on the property) would prevent the HOA from executing on the judgment. However, if the judgment was against an owner and the owner's property within the HOA was a rental, then the HOA could go after the property free from homestead protection.

The HOA could seek collection of its judgment through the typical courses of collection: hearing on assets, wage garnishment, and bank garnishment.

Matthew L. Winton, Oklahoma property owners association lawyer.

Resurrecting expired covenants

During the recent OBA webcast on Oklahoma homeowner association law, I was asked the following question:

Q - If a set of covenants for an older neighborhood has expired, how can the residents create new covenants to control structural restrictions in the future?

A - It may be that the covenants did not actually expire. Check the covenants for language such as, "These covenants shall run with the land for a period of 20 years, after which time they shall extend for successive 10 year periods." This language does not cause expiration, but rather continuation without interruption except if a certain percentage of owners amend the covenants.

If the covenants have in fact expired or terminated, the owners within the addition will have to vote to create a new set of covenants. These covenants will have to be approved by each owner whose property will be subject to those covenants. Their approval should be designated in writing before a notary and be filed in the local county clerk's office along with the new set of covenants.

Matthew L. Winton, Oklahoma property owners association attorney.

Real property covenants as contracts

During the recent OBA webcast on Oklahoma homeowner association law, I was asked the following question:

Q - Please explain more about how covenants are treated as contracts.

A - Courts have for a while determined that real property covenants are not void for public policy, do not violate the Constitution, and will generally be upheld as being supported by consideration. For a discussion of this, see, Lyons v. Wallen, 1942 OK 415 (HOWEVER - two points about the Lyons case and its similar strain of race cases: 1) the mere existence of  real property covenants limiting ownership based on race is thoroughly and utterly repugnant to me, and 2) thankfully, these cases have each been overruled by Shelley v. Kraemer). While the subject matter of race restrictions is a dead issue, the language in Lyons regarding the interpretation of real property covenants as contracts is alive and well. Parrish v. Flinn, 1996 OK CIV APP 104, para. 13.

Matthew L. Winton, Oklahoma homeowner association lawyer

Interest on assessments; attorney's fees

During the recent OBA webcast on Oklahoma homeowner association law, I was asked the following questions:

Q - A governing document says that interest may be charged for delinquent assessments, but does not specify an amount. What amount can be charged.

A - If the governing document is silent on an interest rate but does state that one may be charged on delinquent assessments, the default interest rate for written contracts is 6%. 15 OS 266

Q - Can attorney's fees be tacked on the amount claimed owed for late assessments in a demand letter before litigation or added to a lien when there is no litigation and attorneys fees are not provided for in the governing document?

A - If the declaration is silent on the issue of the HOA collecting attorneys fees as costs of collection, and no other governing document cites the ability of the HOA to collect these expenses, it is unlikely the HOA may properly collect these costs without them being liquidated by a court.

Matthew L. Winton, Oklahoma homeowner association law attorney

FHA and Reasonable Modifications

To assist board members and owners with navigating the sometimes confusing web of the Fair Housing Act, the Department of Justice has issued the technical bulletin you can download here: Download reasonable_modifications_mar08.pdf

The bulletin is helpful in outlining community association/owner responsibilities in reasonable modification scenarios.

Matthew L. Winton, Oklahoma condominium and homeowner association attorney.