Overview
Disputes between California homeowners and their HOAs can be resolved in several different ways. Some conflicts can be addressed informally through Internal Dispute Resolution (IDR), while others must go through Alternative Dispute Resolution (ADR) before a lawsuit can be filed. ADR under the Davis–Stirling Act almost always means mediation, unless the CC&Rs specifically impose arbitration. Depending on the type of claim and the relief sought, homeowners may also find themselves in small claims court or in a “real” lawsuit in the superior court. Understanding the differences between these forums, and when each might be appropriate, can help you avoid missteps, wasted costs, and unnecessary delays.
California HOA disputes are often funneled into either mediation or arbitration. While people sometimes use these terms interchangeably, they are very different. Mediation is a non-binding settlement conference with a neutral mediator, while arbitration is a private trial that results in a decision by an arbitrator, which is usually binding. In everyday legal practice, the phrase “ADR,” which is short for Alternative Dispute Resolution, includes both mediation and arbitration. But under Civil Code 5930 (which is part of the Davis–Stirling Act), ADR almost always refers to mediation unless your CC&Rs specifically require arbitration.
And if your CC&Rs do not contain a mandatory arbitration provision, you should never voluntarily agree to arbitration unless you’ve consulted with an experienced attorney with expertise in HOA law, such as the attorneys at my law firm, MBK Chapman.
For context on when mediation is mandatory, see my Fact Sheet on “California HOA Mediation: When ADR Is Mandatory Under Civil Code 5930.”
Key Points
Although mediation and arbitration are often mentioned together under the umbrella of “ADR,” they operate in very different ways. Here are the essential distinctions homeowners should understand.
- Mediation and arbitration are both considered ADR, but they function very differently. Treating them as equivalent is a mistake because they have very different consequences for homeowners.
- Mediation = facilitated settlement talks before a neutral (often a retired judge or attorney). There are no witnesses, no evidence rules, no judge or jury, nobody being sworn in to testify under oath, and each side pays its share of the mediator and their own attorneys. Think of mediation as a structured settlement conference. You don’t have to deal with depositions, rulings, and there is no decision-maker. Any resolution you and your HOA might reach will be completely voluntary and by agreement only.
- Arbitration = a private trial process. It is only mandatory when the CC&Rs require the parties to engage in arbitration. The arbitrator acts as judge and jury, reviews evidence, hears sworn testimony, and issues a decision. There may or may not be discovery (e.g., depositions or interrogatories), depending on the rules the parties agreed to in the CC&Rs. Arbitration effectively substitutes for court. There is a “trial,” and the arbitrator’s award will be confirmed in the superior court as a real judgment. The procedures regarding how the arbitration will be conducted are dictated by your governing documents and the rules of the agency the parties use to conduct their arbitration.
- Binding vs. non-binding arbitration: (1) binding arbitration = decision is final, virtually no right to appeal; and (2) non-binding arbitration = a party can reject the decision and proceed in court as if the arbitration never happened. This is rare in the HOA context. Since most HOA arbitration provisions are binding, losing typically ends the dispute with almost no right to any appellate relief.
- Arbitration in HOA disputes only occurs if the governing documents (CC&Rs) include a mandatory arbitration clause. Otherwise, the default ADR under Davis–Stirling is mediation. If arbitration is not contractually required, do not agree to it if your HOA requests it unless you and your attorney discuss specific strategic reasons to agree to arbitrate. Mediation preserves flexibility and your right to proceed in court.
These differences matter because mediation is almost always the default under Davis–Stirling, while arbitration only arises if your CC&Rs require it. Knowing the contrast ensures you don’t confuse two processes that have completely different outcomes.
For additional facts regarding the differences between mediation, arbitration, and other types of litigation, see my Fact Sheet on “HOA Dispute Resolution in California: Mediation, Arbitration, and Litigation Explained.”
About MBK Chapman Fact Sheets
Homeowners searching for answers online will often come across “articles” that appear to be authoritative, but are actually designed as nothing more than search-engine marketing dumps. These pieces emphasize keyword inclusion rather than providing clear, related, and accurate analysis. Unfortunately, this approach can leave homeowners more confused than informed.
At MBK Chapman, our Fact Sheets, which are part of our HOA Law Library, are deliberately concise, statute-based, and are designed as quick-reference guides to help California homeowners understand key HOA laws at a glance.
Our Articles, by contrast, are designed for deeper analysis, context, and strategies that go beyond the quick-reference points covered in the Fact Sheets. Unlike much of what appears online, our Articles are not written by AI, and they contain nuanced discussion, real-world examples, and actual analysis of complex issues related to the daily lives of HOA members in California. In short, our Articles prioritize function and clarity over SEO word-dumping.