Arbitration

Arbitration is a more formal alternative to mediation in which an arbitrator (or panel of arbitrators) hears evidence and arguments from both sides and renders a decision. Binding arbitration produces a decision that is enforceable in court and cannot be appealed except on very narrow grounds (fraud, arbitrator bias, exceeding authority). Non-binding arbitration produces a recommendation that either party can reject and then proceed to court. Many HOA governing documents contain mandatory arbitration clauses for disputes above a dollar threshold. Arbitration is private — the proceedings and outcome are not public record — which is both an advantage (privacy) and a concern (no public precedent).

If your governing documents require binding arbitration, you may give up your right to a jury trial. Read the arbitration clause carefully before purchasing in a community, as it materially affects your legal rights if a dispute arises.