The Organizational Ombudsman:


Why Every HOA Needs a Dispute Resolution Professional


Jonathan Cayton, Esq. Cayton Cavallaro, PC


Some of the most epic court battles in the American legal system involve neighbor disputes. People who live in close proximity and have conflicting perspectives, priorities, interests, and emotions will inevitably experience some level of conflict, and homeowners associations (HOAs) are not exempt or immune from this reality. Since HOA members will continue to live in their communities as neighbors, it makes sense to look for solutions that resolve conflict, avoid unnecessary litigation, and preserve harmonious community relationships whenever possible.


HOA disputes are frequently related to CC&Rs and other governing documents, so it can be particularly challenging for HOA boards and community managers to resolve issues that do not involve clear-cut violations of HOA rules. It is equally unrealistic to expect passionate and angry homeowners to “work together” without guidance, support, or assistance.


HOAs and their counsel should heed Abraham Lincoln’s sage advice:


“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.”


— Roy P. Basler, The Collected Works of Abraham Lincoln, 1953.


Appropriately, California’s body of HOA law (the Davis-Stirling Act) attempts to regulate, incentivize, and even mandate HOA dispute resolution. Unfortunately, due to myriad factors including a perceived lack of affordable dispute resolution options, this legislation often fails to accomplish its stated goals.


The default Internal Dispute Resolution (IDR) procedure utilized by many HOAs under Civil Code §5915 is often ineffective since no mediator, neutral, or other unbiased dispute resolution professional is involved in the “meet and confer” process. It is also not a confidential process that would encourage frank communication between disputing parties. This IDR procedure frequently results in mere reiteration of the parties’


16 March | April 2022


previously stated positions, severely limiting the possibility of dispute resolution.


Alternative Dispute Resolution (ADR), under Civil Code §5925, theoretically provides a second opportunity for dispute resolution. It is also a prerequisite to most lawsuits and, in theory, incentivizes resolution via a fee-shifting statute which allows the prevailing party in an action to enforce governing documents to recover attorneys’ fees and costs (Civil Code §§5930-5975). Sadly, ADR can paradoxically incentivize litigation by offering parties the hope of recovering attorney’s fees and costs expended from the commencement of ADR through the conclusion of litigation. Thus, ADR can often be merely a “check-the-box” stop on the road to litigation with attorneys’ fees for each party running into the hundreds of thousands of dollars.


However, an often-overlooked IDR option exists within Civil Code §5905, which recommends maximum use of a neutral third party. Utilizing an “organizational ombudsman” to resolve disputes under this statute offers the possibility of saving HOAs considerable time and money in dealing with the tremendous volume of HOA disputes, especially if this option prevents litigation.


Historically, an ombudsman is a government official appointed to investigate maladministration by public authorities, acting as oversight to ensure government power operates in the interest of citizens.


In contrast, private organizational ombudsmen (also known as “designated neutrals”) have evolved to assist private corporations, educational institutions, nonprofits, and even government agencies to resolve issues between internal employees, management, customers, and/or contractors. Organizational ombudsmen are an informal channel of resolution. They do not conduct formal investigations or issue formal findings. Instead, they operate on the principles of independence, impartiality, informality, and confidentiality – acting as a communication facilitator who listens and looks for mutually acceptable solutions.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36