We all know that associations sometimes find themselves in disputes. These disputes might include disagreements between associations, vendors, developers, owners or others.

Community associations are not unique in that disputes can vary from the relatively small and insignificant argument to high stakes litigation which can affect an association and its owners for years to come. The reality is that most disputes, large and small, get resolved by agreement.

Resolution of a dispute typically includes a written agreement memorializing the resolution. Over the years, we have seen too many instances where associations unnecessarily agree to give overly broad releases in settlement of claims.

You should not, under any circumstances, simply agree to settlement language based on an opposing party’s assertion that it is standard or typical language.

For example, let’s assume an association is in a dispute with its developer regarding parking spaces or unpaid assessments. If this association agrees to a settlement that includes a release of “any and all claims,” the Association runs the risk of waiving claims that have nothing to do with either the parking spaces or unpaid assessments. By releasing “any and all claims” they could have released claims against the developer for anything and everything that might go wrong in the future. It would be a real disaster and injustice if a court were to find that the Association was barred from recovery of thousands, hundreds of thousands or even millions of dollars to repair construction defects because the Association previously released their developer from “any and all claims” to settle a minor parking issue.

The same is true with other contractors and vendors. Release language should be reasonably narrow to prevent the Association from waiving claims beyond the scope of a given dispute. The scope of the release should take into account the nature and extent of potential future liability of both the Association and the other party. For example, if there is a dispute with a plumber regarding one aspect of its work; should the association release “any and all” claims against that plumber? Probably not, and certainly not without first understanding the potential consequences. In order to make sure you understand the potential consequences of signing a release, you should always consult with the Association’s attorney.

The attorneys at Barker Martin can help make sure your associations do not inadvertently release more than they intend to release. Feel free to call if you have additional needs or questions.