The Benefits of Alternative Dispute Resolution in Common Interest Development Disputes
Baum, Christopher, St. John's Law Review
Feuding with one's neighbor is an American tradition.1 Robert Frost aptly expressed this sentiment in his famous line, "Good fences make good neighbours."2 People take their living situation seriously, and they become irritated when their neighbors interfere with their rights or invade their privacy. Small disputes can often fester into hatred and strife. Moreover, once the relationship between neighbors has soured, it can be difficult or impossible to repair. These problems worsen when neighbors live close to one another. In common interest developments, such as condominiums ("condos") and cooperatives ("co-ops"), neighbors share walls, elevators, lawns, and common areas. These close quarters make the potential for discord between neighbors more likely among them than among owners of single family homes who do not share these common areas.
Like relationships between neighbors, tenants' relationships with their landlords can also be contentious.3 In recent years, the condo or co-op board of directors (the "board") has become a surrogate for the landlord.4 The board handles noise complaints, collects maintenance fees, and enforces a variety of other rules and regulations. The board's paternalistic role may create animosity and resentment in condo or co-op residents, many of whom are forced to comply with rules that they glossed over when they purchased their unit.
More people are living in condos and co-ops than ever before.5 For a variety of reasons, the demand for this type of housing is likely to continue.6 As more people move into common interest developments, the number of disputes and the amount of litigation will continue to increase.7
Because litigation is expensive and time-consuming, both common interest development boards and unit owners suffer when parties bring their disputes to court. Alternative dispute resolution ("ADR") is an important solution. This Article will examine the rise of common interest development ownership, the increase in conflicts in common interest developments, the disadvantages of traditional litigation, the advantages of ADR, and the various forms of ADR in other jurisdictions.
I. THE INCREASE IN CONDO AND CO-OP OWNERSHIP
During the last quarter century, the United States real estate market has seen a dramatic increase in condo and co-op ownership.8 Between 1970 and 2006, the number of common interest developments has expanded from 10,000 communities with 701,000 housing units to 286,000 communities with 23.1 million units.9 Although the increase has occurred across the country, it has been particularly acute in New York City.10 One commentator predicts that in the future the rental market will "all but disappear in every major city."11
Both legal and social changes have caused this increase in condo and co-op ownership. America's aging population is one cause.12 As people get older and their children leave home, they often sell their large houses to avoid significant physical upkeep and mortgage payments.13 Common interest developments usually require less maintenance, which is often provided by the development, and mortgage payments for common interest developments are lower. Moreover, the elderly become increasingly infirm, and nursing homes and assisted living communities are often organized as common interest developments.14
The emergence of the two-income family has also led to an increased demand for common interest developments.15 Leisure time becomes scarcer when both the husband and wife work. After a long day of work, they want to spend time with their families, without the chores and responsibilities of a large singlefamily home. Moreover, they appreciate the amenities that most condos and co-ops offer, such as laundry, dry cleaning, and housekeeping services. Even without these services, people prefer condos and co-ops because they can avoid the maintenance and upkeep traditionally associated with single-family homes.
Other social concerns also explain the increase in condo and co-op ownership. …