Alternative dispute resolution methods, including mediation, have become increasingly popular to resolve matters outside of the courtroom. Mediation provides a forum for parties to meet face-to-face and resolve their own dispute. The Orange County Courts have long encouraged that parties seek to mediate and attempt to reach terms of settlement before proceeding in a lawsuit. In fact, since 2012, for all mortgage foreclosure of homestead properties, it was required that the parties participate in the Orange County Bar Association’s (“OCBA”) mediation program. As of April 12, 2018, the Chief Judge for Orange County Frederick Lauten has extended that to homeowners association and condominium association lien foreclosure actions.

This requirement is well-intentioned, as it allows the defendant owners the opportunity to seek to resolve their delinquency before the attorneys fees escalate. Mediation provides a more efficient use of limited judicial resources and helps ease the burden on the court system. Their goal was to promote communication, facilitation, self-determination of the parties, procedural flexibility, and fairness.

The question is how will that affect your community association? There are positives and negatives. By participating in mediation, there is a likelihood that you will be able to get direct contact and be able to negotiate payment plans sooner with owners. The downside though is that we are required now to 1) give the owner 40 days to respond to our offer to attend mediation, and 2) pay an additional $100.00 fee up front to the OCBA regardless of whether we ultimately participate in mediation. Moreover, in the event that mediation is accepted, we would then be also required to pay an additional $150.00 fee to the mediator.

Unfortunately, the biggest impact you will likely see is the additional cost, both money and time, that you will likely incur.  Since we have opened in 2013, we have only requested a $600.00 cost deposit from our clients to proceed to litigation, despite the increasing costs of electronic filing, electronic recording, service of process, title searches, etc., because we did not want these third-party costs to be too large of a deterrent to your pursuing legal action. However, due to this recent change, we will have to make an adjustment to our deposit requests accordingly and will notify you immediately once a decision has been made.

Keep in mind also that mediation will require attendance in person of either the manager, who has been authorized to negotiate and accept settlement offers on the Association’s behalf, or a board member, who likewise has been given authority. We would recommend that any such decision be made at a board meeting prior to the scheduled mediation, and a written resolution adopted designating such person as the authority that will attend the mediation.

If you have any questions about Orange County’s Amended Administrative Order dated April 12, 2018 or wish to receive a copy of the same, please contact our Client Relations Manager, Nanda Ramsaywack, at nanda@dhnattorneys.com.

Mediation Required for Lien Foreclosures in Orange County

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