What Should Associations Do Now?
While state and municipal governments are engaged in ongoing efforts to deal with balancing public health and economic concerns in controlling the COVID-19 pandemic, condominium and homeowner associations have also struggled with balancing concerns about protecting the health of their residents against the necessity, or demand, of residents to use common facilities.
For most associations, clubhouses, pools, tennis courts and fitness centers have been closed for nearly a year while residents continue to pay assessments that are built into association budgets to maintain these facilities. Boards have faced the same backlash as government agencies and officials from residents who demand to use the facilities they are paying for and expected to enjoy when then purchased their homes.
An overriding concern that associations face, which municipal and state entities do not, is the potential liability for COVID claims arising out of the use of common facilities. This issue is underscored by the fact that insurance carriers have almost universally denied coverage for COVID claims under association policies, including the denial of defense of those claims. The exposure that associations potentially face from claims, however difficult they may be to prove, is significant, especially when associations will be forced to bear the full burden of the cost of legal defense. The Association industry in Pennsylvania recently successfully lobbied the state legislature to include Associations as protected entities in the COVID indemnity bill that was passed by the legislature, only to see the bill vetoed by Governor Wolf.
As Spring approaches, the demand by association residents to use common facilities is increasingly loud. Residents, who are facing restrictions against dining out and going to theaters, are resentful that they are unable to enjoy amenities that they are paying for. The ongoing national vaccination effort, while certainly beneficial, has led many to believe that they are protected and that association boards are no longer justified in keeping common facilities closed. Pools and tennis courts are outdoor facilities that many believe should be safe to use. Association boards, however, in exercising their fiduciary duty to their communities, have to continue to face the reality that there is no coverage for COVID claims and they are forced to review CDC and state health department guidelines to divine the risk that opening facilities poses for COVID transmission. Thrown into that mix are the virus variants, which appear to be more easily transmitted, and the politicization of wearing masks. The safest route might be keep all facilities closed but board members must then face the emails and telephone calls from irate neighbors.
Unlike government, every issue in an association is personal.
Rest assured, I am keeping my eye on all developments affecting Associations in the State. I am here to help. Do not hesitate to contact me (215.661.0400 or CWeiner@HRMML.com) with any questions.
Carl N. Weiner, Co-chair of Real Estate Department