The Rhode Island House will consider a bill next week that may lead to significant increases in your assessments, weaken your association's ability to enforce its rules, all while possibly gratifying those in your community that fail to abide by your governing documents. HB 5097 will have no positive effect on Rhode Island condominium associations. The CAI Rhode Island LAC and New England Chapter respectfully ask that you contact your Representative and ask them to VOTE NO on HB 5097.
Click here to find your Representative and their contact information.
CAI supports effective, efficient and economical ways of resolving disputes within condominiums. Unfortunately, HB 5097 will force ALL associations and unit owners to use arbitration to decide disputes. Further, as drafted the legislation allows the losing party to opt out of the arbitration following a decision by filing a jury claim with the court. It is mandating your association add a non-binding, costly procedure to enforce its documents.
Many associations chose to adopt arbitration provisions. However, this legislation will unconstitutionally (state and possibly U.S.) deny owners and associations the fundamental right to the Court system and force your association to rewrite its private contract.
The bottom line is:
- HB 5097 may increase your assessments: Arbitrators in the states range between $200-400 an hour per party and involve several stages taking at least 15 hours. That means even the garden-variety dispute may cost upwards of $5,000, not including legal expenses, for an arbitrator to render a non-binding decision. Fees in your association's budget will increase and the cost will be borne by all assessment-paying owners. Mandatory non-binding arbitration will only impose another (costly) step in the process of resolving a dispute.
- HB 5097 will cripple your association's ability to enforce its governing documents: The potentially lengthy and costly, non-binding process will deter your board from initiating enforcement of the association's rules.
- HB 5097 provides the opportunity for disgruntled owners to engage the association in a "gotcha" game: The bill could be used as a delay tactic by parties to stall judicial resolution of disputes. The mandatory non-binding process in this bill would force associations that currently require binding arbitration to go through the non-binding process. The additional process will not only delay enforcement but cause additional legal fees and drain association funds.
Please call your Representative and tell them how the bill will affect you and ask for opposition on HB 5097. Click here to find your Representative and their contact information.