Mediation and Arbitration Study for HOAs and Condos

Community Association LegislationSenate Bill 16 was vetoed by Governor Cooper on August 15, 2017, for reasons other than the proposal described below. The proposed study of a mediation and arbitration board by the Legislative Research Commission below is on hold until the legislature votes on whether or not to override the veto.

The General Assembly met yesterday (August 3) to consider several issues remaining from the legislative session. Bills that would impact North Carolina’s homeowner and condominium associations weren’t really on the agenda, but one proposal was adopted that has a provision concerning community associations.

Senate Bill 16: Business & Agency Reg. Reform Act of 2017 didn’t start out as an HOA/condo proposal, but the following sentence was added to the bill over the summer:

The Legislative Research Commission shall study the creation of a mediation and arbitration board that would serve as a mediator and arbitrator of disputes between the owners of property located in a homeowners or property owners association and the governing entities of such homeowners or property owners associations. The Legislative Research Commission shall report its findings and recommendations to the 2018 Regular Session of the 2017 General Assembly when it convenes.

SB 16 must now be signed by the Governor, but proposals on what the Legislative Research Commission will study don’t have to approved by the Governor. So the outcome is likely certain: The Legislative Research Commission will study the creation of a mediation and arbitration board for community association disputes and report back to the 2018 Regular Session.

As a reminder, in 2013 the General Assembly adopted a law concerning voluntary prelitigation mediation for disputes in community associations. The details on that law can be found at this New Voluntary Meditation Law for HOA’s and Condos blog. Mediation by its very nature is mostly voluntary, in that in a mediation the parties retain the right to decide whether or not to agree to any settlement. By way of contrast, in arbtration a third party is given the power to decide the dispute and rule much like a judge.

Coincidentally, the North Carolina Community Associations Institute is in the process of creating a Mediation Program for the resolution of HOA or condo disputes. More details will follow.

As a reminder, the General Assembly is not done yet for 2017. There will be additional short sessions later this month and again in September and by November.

If you have specific questions on any bill, feel free to contact me or another attorney at our firm. If there are developments on any of these legislative proposals, additional information will be posted.

 

Jim Slaughter is a Fellow and past national President of
CAI’s College of Community Association Lawyers and past President
of the NC Chapter of the Community Associations Institute
.