Attendance in a conference call counts as if a condo board director were physically present in the … [+]
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In an age when our society is practicing social distancing to stop the spread of the new coronavirus, the ensuing crisis is raising concerns among the more than 73 million Americans who call community associations home.
Living in close quarters at the communities – commonly known as homeowners associations, condominiums and housing cooperatives – presents new challenges for homeowners, board members, community managers and business partners who need to tread carefully as they attempt to navigate through this uncharted territory.
Community association board members should consult with their professional partners, including community managers and attorneys, on how best to handle preparing for and reacting to COVID-19 within their communities.
This guidance from the Community Associations Institute aims to help associations understand how to help prevent the transmission of COVID-19 within their communities.
Implement an emergency plan. CAI recommends that community associations review or establish an emergency plan in consultation with legal counsel, insurance and risk management experts, and their managers.
This plan could address whether it’s possible to conduct association business remotely, how to handle common areas and amenities, anti-discrimination compliance, wage and hour laws if the associations employs staff, and communication with residents.
Meetings and events. Community associations should check with the state or local health officials to determine if guidance or restrictions are in place regarding group gatherings. Generally, there are several methods by which association members or association boards transact business in the absence of everyone gathering at the same time and location—some form of written consent, electronic meetings or a vote outside a physical meeting.
Community associations should contact their attorneys and review state statutes and governing documents to determine what is feasible.
Common areas and amenities. Community associations control the common areas, and owners are responsible for their private property. If the virus becomes widespread, communities may want to consider the following actions:
- Extensive cleaning, disinfecting or wiping down of common areas and common-area surfaces
- Postponing or canceling community events and meetings
- Closing common areas and amenities such as gyms, clubhouses, and pools
- Installing hand sanitizer dispensers or wipes on common areas for owner and guest use
- Share CDC fact sheets. The U.S. Department of Housing and Urban Development is part of the White House Coronavirus Task Force. HUD is encouraging housing providers, including community associations, to share relevant CDC fact sheets with individuals, families and staff members.
Community associations are reminded that their responses to residents regarding the coronavirus must be compliant under the Fair Housing Act and related regulations.
Wage and hour laws. If a community association employs staff, it should review how and whether it will compensate employees in the event of an interruption to normal business operations.
Communication is key. Whatever a community decides to do regarding meetings, events, common areas, amenities and other measures regarding COVID-19, it should clearly and consistently communicate with residents. Consider using a newsletter, website, email, social media or bulletin board to inform and educate.
CAI has produced a resource page and video to help community associations adapt and respond to issues surrounding COVID-19 and the unique decisions and solutions they face ahead.
The organization is encouraging members, chapters and the community associations industry in general to follow the latest guidance and updates issued by the Centers for Disease Control and Prevention. CAI is offering general precautionary guidance from officials and adding some common-sense guidelines for the industry.
Here are frequently asked questions related to the coronavirus pandemic with replies by professionals focused on community association law.
Q: Can we close our gym, business center or other shared facility because of COVID-19?
A: The answer is yes. As the number of COVID-19 cases increases nationwide, many boards are faced with a difficult business decision — should we (and can we) close common facilities? Indeed, most governing documents provide clear authority to the board to “operate, manage, and supervise” common facilities, which could include suspending their operations.
If the board believes that closing a gym, business center or community room is in the interest of the health and safety of residents to minimize the spread of disease, this is arguably a defensible, sensible business decision under the governing documents. If a board makes this kind of decision, we recommend making the rationale clear in a written communication to the members.
Wil Washington, a partner at Chadwick, Washington, Moriarty, Elmore & Bunn, PC in Fairfax, Va., and a fellow in CAI’s College of Community Association Lawyers
Q: Can community associations legally prohibit guests from entering the community during this time?
A: I am recommending that my clients prohibit all non-essential guests from entering their communities at this time to minimize their residents’ exposure to COVID-19. Caretakers and immediate family members of residents would be excluded from that prohibition.
Donna DiMaggio Berger, a shareholder at Becker in Fort Lauderdale, Florida, and a fellow in CAI’s College of Community Association Lawyers
Q: Would associations be justified in holding their board meetings via conference calls as emergency meetings due to the declared pandemic and then ratifying those actions after the health issues are over?
A: Probably not. Older board members with underlying medical conditions are justifiably concerned about possible exposure to the coronavirus. There are steps they can take to minimize their risk and still fulfill their duties as directors.
Conference phone. Concerned directors can attend meetings electronically via telephone, provided they can hear all other directors in the meeting and all other directors can hear them. This is easily accomplished with a conference phone. Attendance in this manner counts as if the director were physically present in the meeting.
The entire board. If all directors wish to attend a board meeting by telephone, they can do so. However, notice of open meetings must identify at least one physical location with a conference phone where homeowners can attend the meeting and listen to the board conduct business. (Civ. Code §4090(b).) The statute does not require any of the directors to be physically present at the meeting location – only a representative of the board such as the manager.
What if the management company has suspended all meeting attendance for their managers due to the coronavirus? If no other representative can be found to set up the conference phone, can the meeting still be held as an emergency meeting?
Unfortunately, this does not meet the definition of an emergency. An emergency is defined as “circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice” to the membership.
Fortunately, technology has reached the point where a call-in number can be published along with the agenda so members who wish to attend can also call into the meeting. All attendees except the board should mute their phones and only listen to the meeting. Except for open forum, members cannot participate in the board’s meeting.
For associations where there may be a large number of attendees, boards should consult with a technology expert to determine which call-in service best serves their needs.
Adrian J. Adams, managing partner at Adams | Stirling PLC in Los Angeles
Q: Can community associations prohibit owners from undertaking renovation projects so they can prevent contractors and other workers from entering the property?
A: Contractors should be prohibited from entering the community unless emergency repairs are needed in a unit or on the common elements. Realtor open houses or showings should not be permitted. There are other people who have a legal right to enter the community such as process servers or census takers. Those people can be required to wear protective gear before entering.
Donna DiMaggio Berger, a shareholder at Becker in Fort Lauderdale, Florida, and a fellow in CAI’s College of Community Association Lawyers
Q: How should boards respond if they learn that a resident tested positive for the coronavirus? Do they have an obligation to inform residents? Is there liability for the board if it does not?
A: This raises conflicting interests: a person’s privacy about their medical condition and the membership’s safety.
Authorized disclosure. If the person with the coronavirus authorizes full disclosure, the board can disclose the person’s name to the membership. This allows residents who had contact with the person to immediately self-quarantine and get tested for the virus. Before doing so, I encourage two precautionary steps for boards.
First, the authorization should be in a written communication from the person or the person’s attorney. It should never be based on hearsay and rumors. Second, the disclosure should be limited to members and residents. Particular vendors who may have had contact with the person could also be alerted. The board should not broadcast the information outside of the community.
No authorization. If the infected person tells the board in confidence that he contracted the coronavirus and does not want anyone to know, the board may still have a duty to notify the membership. However, it would do so without disclosing the person’s name. The board would simply report, “A resident has reported testing positive for the coronavirus.”
A disclosure, however limited, alerts residents to take extra precautions to protect themselves. In addition to giving notice, the board should contact the Centers for Disease Control and Prevention. The CDC has the power to make additional disclosures, trace contacts, quarantine individuals and take other actions it deems medically necessary.
Self-quarantine. What if the person does not have the coronavirus? He is simply self-quarantining as a precaution. If that is all he is doing, I don’t believe the board has an obligation to notify the membership. There is always the potential for liability if a board becomes aware of a threat to their community and does nothing. If, as a result of the failure to disclose, members fall ill and some die from the illness, lawsuits will likely follow. Accordingly, silence may not be the best course of action.
Recommendation: As volunteers, boards are allowed to seek expert advice. When confronted with issues involving the coronavirus, directors should not make decisions based solely on recommendations in a newsletter, whether mine or someone else’s. They should contact legal counsel and the CDC for guidance.
Adrian J. Adams, managing partner at Adams | Stirling PLC in Los Angeles
Q: Now that we are in crisis mode, how do we handle owners who are losing their jobs/income? Don’t really want to see people losing their homes due to this crisis. What if the HOA can’t pay its bills?
A: The crisis will end at some point (hopefully soon) and businesses will restart. I recommend boards place a lien on delinquent properties to protect the association’s interests, but suspend all foreclosure activity. Once people return to work, you can work out payment plans with delinquent owners.
Permanent job loss. The more difficult scenario will be those persons who permanently lose their jobs. They will be looking for new jobs once the economy re-engages. How long do you wait for them to find work? What if they can’t?
When you get to that point, you will need to discuss options with legal counsel and decide how best to proceed.
Drop in HOA revenue. If delinquencies impact cash flow, associations still need to pay their bills. If boards need to, they can borrow from reserves. Without a vote of the membership, boards are allowed to borrow from reserves to meet short-term cash flow problems. (Civ. Code §5515(a).)
Monies borrowed from the reserves must be repaid to the reserve fund within one year of the date of the initial transfer, except that the board may, after giving the same notice required for considering a transfer, and, upon making a finding supported by documentation that a temporary delay would be in the best interests of the association, temporarily delay the repayment. (Civ. Code §5515(d).)
Adrian J. Adams, managing partner at Adams | Stirling PLC in Los Angeles