Client Alert: COVID-19 Community Association FAQs - You've Asked, We've Answered
In light of the current state of affairs surrounding COVID-19, community association managers and boards of directors are facing challenges not typically encountered in their day-to-day roles. Our Whiteford professionals have addressed the following questions for our clients in hopes these answers will assist in easing how to deal with this particularly difficult, ever-changing situation.
Are Community Associations eligible for the Paycheck Protection Programs (“PPP”) under the CARES ACT? (new, 4/7/2020)
In order to qualify for a PPP Loan, a community association must be in one of two IRS designated categories: 1) A 501(c)(3) nonprofit charitable organization; or 2) A for-profit entity with under 500 employees. (Other qualifications exist under the CARES ACT, but are generally not applicable to community associations). Most community associations in our area do not qualify for the PPP loans under current guidance. Community associations may be eligible for Economic Injury Disaster Loans (“EIDL”). However, these loans do not offer the same “forgiveness” that PPP loans provide. Please contact your Whiteford attorney for additional information and guidance.
Should Associations close Common Areas? (new, 4/7/2020)
At this time, it is recommended that common amenities such as roof terraces, pools, gyms, business centers, and general common/community rooms be temporarily closed until the danger of the pandemic passes or additional guidance is provided by the CDC and/or local governments. Outdoor Common areas such as playgrounds should also be closed during this time. Associations should not close common laundry rooms as they are necessary for residents’ daily life. However, associations should place signs in these open common areas detailing COVID-19 recommended procedures, such as washing hands and social distancing; and should focus efforts on cleaning commonly touched surfaces in these locations. For elevators, we recommend placing signs stating that residents should limit sharing elevators where possible.
Can Associations limit guests or visitors to residents in a condominium or cooperative building during the pandemic? (new, 4/7/2020)
Associations generally do not have the authority to limit guests of residents in the community. Therefore, we do not recommend creating procedures limiting guest access to buildings at this time. If it appears that a resident is violating a local emergency order issued by the government, such as an order limiting the gathering of groups of 10 or more people, you may contact your local police department. An association’s governing documents may provide additional authority depending on specific situations, so if you have any specific questions, please contact your Whiteford attorney.
Can an Association prohibit short-term rentals during the pandemic? (new, 4/7/2020)
Generally, an Association may continue the enforcement of short-term rental restrictions already contained in the communities governing documents. The Association may also impose additional restrictions on guests utilizing common area facilities and amenities, that are not otherwise closed. In addition, some state, county and municipal governments have imposed short-term rental bans of a specific duration. In those locations, an association may take steps to curtail short-term rentals during the period-of-time established by the local governing body but may not prohibit short term rentals unless otherwise allowed by the governing documents or local law. Community association boards should check their local orders to see if such a ban has been established in their jurisdiction.
Should Board Meetings or Annual Meetings be held during COVID-19? (new, 4/7/2020)
The COVID-19 pandemic has upended most aspects of American life, including how community association business is conducted. The reality is that while Board and Membership meetings may be temporarily postponed, community association Boards and Members will need to meet in the coming weeks and months in order to conduct association business.
While traditional open Board meetings cannot take place in light of the various public health orders and recommendations, keep in mind that most jurisdictions permit use of technology to conduct meetings. In general, in order to comply with open meeting requirements, everyone observing or participating in the Board meetings must be able to simultaneously hear one another during the meetings. In addition, Boards may also be able to take an action outside of meeting, which in many jurisdictions requires a unanimous vote.
Membership meetings cannot be put off indefinitely as such meetings are required to take place at least once a year to elect Board members and in some cases, approve budgets. While virtual membership meetings are more challenging given the potential numbers of people who may attend and proxy voting requirements such as witness requirement, such meetings are possible. the laws in many jurisdictions now permit the use of electronic voting.
No one model works for everyone. Boards should work with their management professionals and attorneys to see what will work for their association in order to comply with meeting requirements while recognizing that the health, safety and wellbeing of Boards, management professionals and community members is paramount and that Board must also adhere to the directives of local, state and federal authorities (such as the CDC) as well as applicable meeting requirements to enable business to be conducted.
Can Associations prohibit construction activity in a condominium or cooperative building, or an owner’s unit during the pandemic? (new, 4/7/2020)
No, unless otherwise stated in the governing documents or if a public health order has been issued prohibiting construction activities, associations do not have the authority to limit construction activity in an owner’s unit. In regards to construction work in the common areas, we recommend that the association limit such construction to necessary maintenance and repairs during the present crisis. Boards may also wish to consider sending notices to residents and owners with the same advice and requesting that noise be kept to a minimum during the day as many residents may be working from home.
Should we consider adjusting our delinquent assessment procedures? (new, 4/7/2020)
Associations should consider adjusting delinquent assessment procedures on a case by case basis. In general, at this time, we recommend suspending foreclosure actions and evictions. Certain jurisdictions have already put orders in place to halt all foreclosures and evictions. Many community associations have instituted late fee waiver policies and assessment deferment policies during the emergency. The right of community associations to institute these policies depends on the language of your local laws and your governing documents. Therefore, before instituting policies adjusting your assessment and collection procedures, please contact your Whiteford attorney.
Should an Association require that residents who are self-quarantining or who become ill disclose this information to the Association?
We recommend that our association clients not seek out this information and maintain the confidentiality of any information its does receive. Community associations are not authorized or obligated to collect or maintain such information. Moreover, residents are not obligated to disclose to a community association whether they have been exposed to or have the COVID-19 virus or for that matter any other health condition. Please note that while there is no express right to privacy in the United States Constitution, the courts, have recognized a constitutional right to privacy, which includes an “individual interest in avoiding disclosure of personal matters.” Whalen v. Roe, 429 U.S. 589, 599-600 (1977). See, e.g., United States v. D.C., 44 F. Supp. 2d 53, 60–61 (D.C. 1999). When such a protected individual interest exists, a court will balance the individual’s privacy right against the governmental interest in disclosure. Whalen, 429 U.S., at 602-604.
As unfair as it sounds, the sad fact is that some people will judge others by a condition or illness. The Center for Disease Control and the U.S. Department of Housing and Urban Development have both published concerns about stigma and discrimination relating to this virus. Please navigate here for more information on this. We thus suggest that, given the rapid global spread of the COVID-19 virus, Boards and management operate going forward with the presumption that there are now people residing in their communities who will (or have already) test positive for COVID-19 and will become ill as they make plans and implement practices to ensure the continuity of operations while protecting the privacy of the residents during these difficult and unsettling times.
We realize that residents are looking for guidance. We suggest that boards consider sending a notice to the residents advising residents that the association does not know whether anyone has been exposed to or is sick with the virus, but that residents should conduct themselves as if there is a resident in the building who has been exposed or is sick and act accordingly. That said, tell about the steps that the association may be taking such as the cleaning of the common areas and other actions. Further, that it is important that residents remain responsible for their own health and safety and that of their family members and not rely upon the Association. Please contact any of the attorneys at Whiteford if we can assist with a letter.
Should the Association continue to provide in-unit service to residents?
The Association must take measures during this time to protect the health and safety of its employees, as well as any contractors. As such, except in cases of an emergency, in-unit services should be suspended until further notice. This is to prevent the transmission of COVID-19 because we now know that just because someone is not showing symptoms, does not mean they have not been exposed. In the event of an emergency, essential personnel or an appropriate contractor may be directed to enter a unit to abate the emergency and provide any necessary mitigation services. Further repairs can be done at a later date once the pandemic subsides. Employees who enter a unit to perform a necessary service should be directed to alert the Board or Management if the employee believes someone in the unit is sick or the employee may have been exposed to COVID-19 while in the unit. The Board or Management will then need to take additional action with regard to the employee. Navigate here
to view our COVID-19 Labor & Employment FAQs.
What actions, if any, should the Association be taking in light of COVID-19?
During this unprecedented time, many are anxious and nervous about what is to come. The Association may be able to ease this anxiety by advising residents of measures it has taken within the community or the building to reduce transmission. These measures could include, but are not limited to, cleaning frequently touched surfaces more often such as door handles, railings, elevator buttons, etc.; posting CDC precautionary guidance in common areas; advising the community that staff have been told not to report to work if they are sick or exhibit symptoms; advising the community that outside vendors have been given similar directives by their employers; and reminding residents of measures they can take to prevent the spread of COVID-19, as well as prepare for how to respond to outbreaks, by going to cdc.gov.
In addition, while the Association has no legal obligation to make sure residents are able to get groceries, drugs, and health care supplies, human nature will dictate otherwise. As such, if the community wants to do something to help others, volunteers within the community can organize themselves, as well as educate others about delivery services that can be used to get essential items. This would be in the nature of community spirit and not dictated by the Association.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.