Chapter 8 - § 8.5 • ALTERNATIVE DISPUTE RESOLUTION

• Jurisdiction: Colorado

§ 8.5 • ALTERNATIVE DISPUTE RESOLUTION

The CCIOA favors alternative dispute resolution, but does not actually require it. The Act "encourages" common interest communities to adopt protocols that make use of mediation or arbitration as alternatives to, or preconditions on, filing complaints between unit owners and associations in situations that do not involve "imminent threat to the peace, health, or safety of the community."¹²² Further, the Colorado General Assembly specifically endorses and encourages associations, unit owners, managers, declarants, and all others who are parties to disputes arising under the CCIOA to agree to make use of all available public or private resources for alternative dispute resolution.¹²³ To facilitate that desire, associations have to adopt a written policy with procedures for addressing disputes arising between the association and unit owners and make a copy of the policy available to unit owners on request.¹²⁴

The CCIOA provides that any controversy between an association and unit owner arising out of its provisions may be submitted to mediation by agreement of the parties before any legal proceeding is begun,¹²⁵ but either party to the mediation may terminate it without prejudice.¹²⁶ If a mediation agreement is reached, it may be presented to the court as a stipulation. If either party subsequently violates that stipulation, the other party may apply immediately to the court for relief.¹²⁷ Finally, the declaration, bylaws, or rules of the association may specify circumstances in which disputes must be resolved by binding arbitration¹²⁸ or by another means of alternative dispute resolution under the Dispute Resolution Act.¹²⁹

The specific language of a declaration clause on arbitration will usually determine whether a dispute has to be submitted to arbitration. For example, a declaration provided that all claims arising out of or relating to the interpretation, application, or enforcement of the declaration, or the rights, obligations, and duties of any party bound under it had to be arbitrated unless resolved through mediation. The issue in dispute was whether unit owners were entitled to assigned parking pursuant to sales literature and documents provided to them. The plaintiff unit owner contended the arbitration clause did not apply because the claims did not arise out of or relate to the declaration. The court did not agree. The use of the phrases "arising out of" and "relating to" was evidence of the intent that...