HOA stands for homeowners' association. It is a private organization that consists of members of...
When Nevada homeowners have disputes with their HOAs, they must go through the state’s alternative dispute resolution procedure before they can file claims, and the preferred ADR method is mediation. If an agreement is reached through mediation, it will serve as a document outlining the responsibilities of both parties. If the parties are unable to resolve the dispute through mediation, they can then either go through non-binding arbitration or binding arbitration, or the homeowner can file a claim against the HOA in court.
Alternative Dispute Resolution Procedures
Alternative dispute resolution procedures are required before homeowners can sue their HOAs in court. There are three different alternative dispute resolution methods that are recognized for HOA disputes, including the referee program, mediation, and binding or non-binding arbitration. The referee program is available when both parties agree to participate. They present evidence to the referee, who makes a decision. If a party disagrees with the referee’s decision, a claim can be filed in civil court. Mediation is the default method used in Nevada to resolve disputes with HOAs. In mediation, the parties meet with a mediator, a third-party neutral, and present evidence. The mediator goes between the parties and tries to help them reach a resolution but does not make a decision or judgment about the evidence. If the parties reach an agreement, the dispute will be resolved. If they are unable to reach an agreement, they can choose to take their dispute to binding or non-binding arbitration, or a claim can be filed in civil court.
Arbitration vs. Filing a Civil Claim
If the parties do not reach an agreement in mediation, they can choose to take the dispute to arbitration or to file a civil claim in court. Arbitration is an ADR method that is held outside of court. The parties present evidence to the arbitrator, and the arbitrator renders a decision. If the process is binding, the case will end. If the process is non-binding, a party that disagrees with the decision may file a civil claim in court. People who are unable to resolve their disputes through mediation can also choose to file civil claims in court without going through arbitration. Filing a civil claim may present some advantages when homeowners are on unequal footing with HOAs since the arbitrators may have heard cases for the HOAs in the past. Civil claims are also a matter of public record, and the decisions can be appealed. Binding arbitration decisions are not appealable and are not a matter of public record. Seeking guidance from an experienced HOA general counsel can provide valuable insight when deciding between arbitration and filing a civil claim.
