Q. Does binding alternative dispute resolution (ADR) override condo docs? If the ADR changes the shared common ground expenses, do the members of the association have to vote on the changes? Do the condo docs have to be changed to reflect the decision of the arbitrator?
—Seeking Agreement
A. “In weighing an ADR order against an association’s governing documents, my first response is that there really should not be a contradiction between the two,” says Gary M. Daddario, partner in the Braintree, Massachusetts firm, Marcus, Errico, Emmer & Brooks.
“An association’s governing documents are recorded and are considered by courts to be covenants running with the land. Courts also consider anyone accepting a deed to a unit within an association to have constructive knowledge of the provisions in the documents whether they actually read them or not. This is because purchasing a unit in an association is a voluntary decision and a potential buyer is free in the course of their due diligence to review the governing documents which, by virtue of being recorded, are public documents.
“Since governing documents are covenants running with the land and both governing boards and owners are legally required to comply with them, an ADR process should not result in an order that conflicts with them. Rather, an ADR order should simply assist with proper enforcement of the provisions at issue.
“Now, if it is the case that the dispute was over the proper interpretation of language in the governing documents, because different parties argued that it could be interpreted in different ways, then the ADR order may have selected an interpretation and clarified the language of the documents. In this case, the ADR order should be complied with unless and until the association does otherwise amend their governing documents.
“Going forward, if the requisite percentage of the voting interest passes an amendment to the governing documents, then this language would control notwithstanding the prior ADR order. So, if an ADR order is presenting a true dilemma for an association, one path to resolution would be to amend the governing documents to include some clear language on the issue.”
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