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Homeowners’ Association Litigation

Our firm has represented homeowners and homeowners’ associations in numerous matters for years. One of the things we have learned is that there are few places with more petty politics than homeowners’ associations. A recent case from one of the Houston Court of Appeals demonstrates that point nicely.

In the lawsuit, the HOA claimed that the homeowners were not adequately concealing their trash cans. The case went to mediation in 2002, and the parties settled their claims. The settlement agreement had four main provisions: (1) the HOA would pay the homeowners some amount of money; (2) the HOA would plant additional shrubs that matched existing shrubs to help conceal the trash cans; (3) the HOA would pay the homeowners up to $100 for a planting box to use to conceal the homeowners’ trash cans; and (4) the homeowners agreed to conceal their trash cans behind the landscaping. The settlement agreement also had an arbitration clause.

But that was not enough. The parties still could not agree whether the homeowners were adequately concealing their trash cans. In October 2003, the HOA filed a petition to start the arbitration process. The claim went through arbitration, and the arbitrator ruled in favor of the HOA. The HOA then filed a suit to enforce the arbitration agreement. The court affirmed the agreement, but also added $5,386.83 in attorneys’ fees and costs for the HOA. The homeowners’ appealed. The case was finally resolved on July 20, 2006, four years after the dispute started.

Admittedly, this case is atypical. But it demonstrates several important points. First, it confirms how small disputes can escalate. These parties undoubtedly spent tens of thousands of dollars on a dispute involving an estimated $500 in plants. Second, it can be an important lesson on arbitration. Even after the arbitrator made an award, the HOA was required to file suit to enforce the award and still went through the appellate process. Arbitration is not the panacea that many would like consumers to think it is. Finally, it can be a lesson on how not to proceed. We pride ourselves on being problems solvers and our ability to help clients avoid putting themselves in these positions in the first place.

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