ADR (California)

Alternative Dispute Resolution (ADR) under the California Davis-Stirling Act refers to the formal mediation and arbitration processes established by Civil Code Sections 5925 through 5965 as a mandatory pre-litigation step for disputes between HOA associations and their members. Before filing a civil action related to the enforcement of governing documents, assessment disputes, or other HOA-related claims (excluding small claims court actions and actions for bodily injury or property damage from a tort), the initiating party must serve a Request for Resolution on the opposing party, offering to participate in ADR. The receiving party has 30 days to accept the offer. If ADR is accepted, the parties typically engage in mediation conducted by a neutral third-party mediator who facilitates negotiation toward a voluntary settlement. If mediation does not resolve the dispute, the parties may agree to binding arbitration, where a neutral arbitrator hears the case and renders a final decision. The ADR requirement carries significant financial consequences: if a party refuses a proper Request for Resolution and the dispute proceeds to litigation, the court must consider that refusal when awarding attorney fees and costs — meaning a prevailing party who refused ADR may receive reduced fees, or a losing party who refused ADR may face enhanced fee liability. ADR is distinct from Internal Dispute Resolution (IDR) under Civil Code Section 5900, which is an informal, internal process between the homeowner and the board without a neutral third party. In practice, most HOA disputes follow a progression: IDR first as an informal conversation, then formal ADR (mediation) if IDR fails, and litigation only as a last resort. Board members should maintain clear records of all ADR requests and responses, as these documents become critical evidence in any subsequent litigation regarding attorney fee awards.