Overview
Most HOA disputes between California homeowners and their HOAs (or fellow homeowners) never reach a courtroom. The Davis-Stirling Act encourages homeowners and associations to attempt to resolve disagreements without having to file a lawsuit, either through Internal Dispute Resolution (IDR) or Alternative Dispute Resolution (ADR).
IDR is an informal, face-to-face meeting between the homeowner and the board to discuss the dispute and explore settlement options. Either side may request IDR, but only the association is legally required to participate if a homeowner requests it. IDR is free, and it’s mandatory when a homeowner properly demands it (Civil Code 5915).
If IDR fails or isn’t productive, the next step is ADR. Under Civil Code 5930, ADR is mandatory on both sides if the dispute involves enforcement of the governing documents, and (i) the only claims are for declaratory, injunctive, and/or writ relief, or (ii) the suit consists of one or more of those claims, along with monetary relief of no more than $12,500.
For a quick-guide on this issue, see my Fact Sheet, “California HOA Mediation: When ADR Is Mandatory Under Civil Code 5930.”
Key Points
Here’s what every California homeowner needs to know about the legal pathways for resolving HOA conflicts before they turn into full-scale litigation.
- The purpose of pre-litigation settlement. The Davis-Stirling Act encourages homeowners and HOAs to resolve disputes before resorting to the courts, saving time, expense, and unnecessary conflict.
- IDR. IDR is an informal, face-to-face meeting between a homeowner and members of the board to discuss the dispute and explore potential settlement. Either side may request IDR, but only the association is required to participate when a homeowner properly demands it (Civil Code 5915). The process is free, and any agreement reached must be in writing and signed by both parties to be binding.
- ADR. If IDR fails or isn’t productive (or the homeowner opts not to bother), the next step is ADR. Under Civil Code 5930, ADR is mandatory before filing certain types of enforcement actions involving the governing documents. These include: (i) claims for declaratory, injunctive, or writ relief; and (ii) claims combining one or more of those remedies with monetary relief of no more than $12,500.
- What “ADR” means in practice. In the Davis-Stirling context, ADR almost always means mediation. Mediation is an informal, confidential settlement discussion facilitated by a neutral professional, often a retired judge or experienced attorney. There are no witnesses, no evidence, no rulings, and no obligation to settle. Either side may leave at any time or refuse to negotiate. Each side participating in mediation pays half of the mediator’s fees, and if they have their own attorneys, they each pay for their own attorneys as well.
- Consequences for skipping ADR when it’s required. Failure to comply with an ADR demand when ADR is required by the Davis-Stirling Act has consequence (which is why HOAs rarely reject a properly prepared ADR demand). First, when mediation is required and a party refuses to participate, there can be real consequences. Civil Code 5960 authorizes the court to consider that refusal when deciding how much to award in attorney’s fees and costs (which Civil Code section 5975(c) requires the court to award to the prevailing party in an enforcement action). A refusal to mediate when required can result in the judge significantly, though not completely, reducing the prevailing party’s right to recover attorney’s fees if that party failed to participate in ADR when it was required under the Davis-Stirling Act. Another consequence of failing to engage in mandatory ADR (under Civil Code 5930) is Civil Code 5950, which requires the party filing suit to include, with the initial pleading, a certificate stating that ADR has been completed or that the other side refused to participate. If that certificate is missing, the defendant can demur and ask the court to dismiss the case for non-compliance. In practical terms, this means that even if you are the plaintiff and you fail to offer ADR, or you refuse to participate when the HOA offered it, your case could be derailed before the court ever reaches the merits. Although the derailment might only be temporary, because you could complete ADR and then refile, you will still have wasted time and money unnecessarily.
- ADR is almost always a good idea even if it’s not required. Even when mediation isn’t legally required, however, we almost always recommend it. The reasons are straightforward:
- Mediation is orders of magnitude less expensive than litigation.
- Using the legal processes that I developed when I pioneered this niche area of the law, my firm’s settlement rate at the pre-litigation stage increased to well over 50%. That fact, coupled with a strategic benefit that most homeowners don’t think about, makes ADR an excellent investment in terms of money and time.
- What are those strategic benefits? We can often negotiate remedies that a court could never order, even if you were to win at trial. For example, we have successfully negotiated the removal of abusive or disruptive directors, sometimes permanently and sometimes for a set period of time, as part of resolving a dispute via a settlement agreement negotiated during the pre-litigation ADR process. This is not a remedy a judge or jury could grant in a typical enforcement lawsuit unless there was an explicit statutory basis for that person’s inability to serve. Courts generally don’t interfere with an HOA’s “democratic process.” But in settlement, the parties can agree to anything that’s lawful and mutually acceptable. That kind of flexibility, combined with the cost savings and higher likelihood of early resolution, makes ADR a good investment in most situations. Plus, if the case doesn’t settle, and instead proceeds to trial, under the Davis-Stirling Act, the prevailing party will be entitled to their pre-litigation attorneys’ fees, so they’ll be able to recoup the money spent during the ADR process.
- Settlement agreements. Any settlement reached in IDR or mediation must be documented in a written agreement signed by both parties. A well-drafted settlement should:
- Identify the issues being resolved and how they are resolved.
- Specify timelines for each party’s performance.
- Clarify any issues excluded from settlement.
- Address attorneys’ fees (waived for negotiation; prevailing-party clause for breach).
- Include an integration clause confirming it is the full agreement.
- Include a general release and a Civil Code 1542 waiver.
- Avoid binding arbitration provisions unless the governing documents already require them.
- The role of legal counsel. Once IDR fails, homeowners should retain qualified HOA-counsel before participating in ADR. Attorneys not only ensure that the ADR demand, which has statutory requirements attached to it, is prepare correctly, but also that the settlement terms are enforceable, properly drafted, and protect against future disputes. My firm’s attorneys are highly qualified HOA experts and we’ve helped thousands of clients resolve their disputes through the ADR process.
- Advantages of resolving disputes before litigation. Early settlement through IDR or mediation can save substantial legal costs, shorten resolution time, preserve privacy, and maintain community stability.
When handled correctly, pre-litigation resolution allows homeowners to protect their rights while avoiding the financial and emotional toll of litigation.
FAQs
Am I required to participate in IDR before filing a lawsuit?
No. There is no statute requiring homeowners to participate in IDR before filing suit. Only the HOA is required to participate when properly requested by a homeowner under Civil Code 5915.
When is ADR mandatory before litigation?
ADR is mandatory before filing certain enforcement actions involving the governing documents when: (i) the claims seek declaratory, injunctive, or writ relief; or (ii) the claims combine one or more of those remedies with monetary relief of $12,500 or less (Civil Code 5930).
What happens during mediation?
Mediation is a voluntary, confidential discussion before a neutral facilitator (often a retired judge or attorney). No witnesses, evidence, or rulings are involved. Each side may walk away at any time, and nothing said can be used later in court. Typically, the mediator will float between the rooms where each party is waiting to try to facilitate meaningful resolution of the dispute.
Do I need an attorney for IDR or mediation?
Although there is no statute stating that you have a right to have an HOA attorney present during IDR, if your HOA refuses to allow it, our advice is to skip IDR and proceed directly with ADR. For ADR or mediation, I strongly recommend that you have competent counsel representing you to ensure that the ADR demand is properly prepared and if a settlement is reached, that its terms area fair and enforceable. You should never sign a document waiving any rights without having a qualified attorney advising you.
What should a written settlement agreement include?
At the very least, a settlement agreement should: (i) identify the specific issues/dispute being resolved and how they are resolved (including required timelines for each party to perform); (ii) include clear timelines for each party’s actions; (iii) specify any issues excluded from settlement; (iv) address attorneys’ fees, including waiver for negotiation and prevailing-party recovery for breach; (v) contain an integration clause confirming it is the full agreement; (vi) include a general release and Civil Code 1542 waiver; and (v) exclude any binding arbitration provision unless already required by the governing documents.
What happens if mediation fails or the HOA refuses to participate?
If the dispute involves an enforcement action described in Civil Code 5930, the homeowner may proceed to litigation after showing that ADR was offered or refused. Failure to comply with an ADR demand when ADR is required by the Davis-Stirling Act has consequence (which is why HOAs rarely reject a properly prepared ADR demand). I spelled out some of those consequences above.
Do you recommend ADR even where it’s not required by Civil Code 5930?
Yes. As was explained above, we can often negotiate remedies that a court could never order, even if you were to win at trial. Plus, ADR is so much quicker and less expensive than a lawsuit, that if there’s even a reasonable chance that all (or even some) of the issues in dispute can be resolved in ADR, then it’s worth it to try.
About MBK Chapman Fact Sheets
Homeowners searching for answers online will often come across articles that appear authoritative, but are actually written as search-engine marketing content rather than by an experienced HOA lawyer. These pieces tend to prioritize keyword density over clarity, accuracy, or legal context, which often leaves homeowners more confused than informed.
At MBK Chapman, our Fact Sheets are part of our HOA Law Library and are written by Michael Kushner, an HOA lawyer with decades of hands-on experience representing California homeowners. In fact, Michael Kushner is the HOA lawyer who pioneered the systems and strategies used by some of California’s most successful homeowner-side HOA law firms.
Each Fact Sheet is deliberately concise, statute-based, and designed as a quick-reference guide to help homeowners understand key HOA laws and enforcement rules at a glance.
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