New York: Impact of COVID-19 on Homeowner Associations
While COVID-19 continues to keep us quarantined, several executive orders have been issued that directly impact our daily operations, specifically as regards real estate and homeowner associations:
Executive Order 202.8, Effective Through April 19, 2020
Tolls all time limits for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding under all applicable laws, rules, and regulations. This tolling applies to all actions or special proceedings that would otherwise be commenced by the New York Attorney General, as well as private-party disputes involving real estate securities; and
Except those that provide “essential services,” all businesses and not-for-profit entities in New York must reduce in-person workforce’s by 100% no later than March 22 at 8:00 p.m. The Governor has already publicly stated that this applies to the in-person showing of apartments.
The Governor has since issued Executive Order No. 202.14 which extends the tolling date from Executive Order 202.8 through May 7, 2020. At this time, it is unclear whether those dates will be extended further as NY Courts are beginning to hear non-essential matters electronically (via Skype) and have said that they will begin to issue decisions on matters that have been fully submitted. Notably CPLR 2219(a) provides that an order determining a motion shall be made within sixty days. Should a court fail to comply with this rule, any party to the action can commence an article 78 proceeding to compel the judge to file a decision, however in light of the tolling provision of the executive order, there have been numerous questions raised regarding the timing of the stated tolling. That notwithstanding, as NY practitioners, most, if not all of us have not received a court order/decision since early March.
As cases of COVID-19 increase here in the US, a number of questions from condominium boards are being raised. Two of the most common are:
What should we do to protect the condominium and its members?
What is our responsibility for the clubhouse, pool, workout area, playground, plumbing, HVAC system?”
While condo boards should be vigilant, there are limits on what can be done to fight the virus. While the situation should be taken seriously, there’s much that isn’t yet known. Early theories posited that the virus might have been transmitted in cruise ships and apartment buildings through HVAC circulation or plumbing systems, but nothing has been proven. Several recent cases have no clear origin, leaving the medical community with little ability to provide direction on prevention methods.
As NY continues to be a “hot spot” for the virus, with an ever increasing number of cases (although the curve is starting to even out), we are beginning to see claims alleging that homeowner associations are responsible to mitigate the spread because they control the condominium’s common areas. Based on those allegations, we anticipate seeing the following increased obligations needing to be undertaken by homeowner association boards, and failure to do so, may lead to liability (and not just for COVID-19 but for other contagious illnesses, as well):
More frequent, and extensive cleaning, disinfecting, and wiping down of common areas and common area surfaces.
Gatherings in the common areas, whether a membership meeting or educational event, may need to be postponed or canceled.
Public common areas such as gyms, clubhouses, and pools, may need to be temporarily closed.
Limiting access to common laundry rooms/facilities
Controls and/or limitations on the number of people that can access elevators at one time
The association may wish to consider the installation of hand sanitizer dispensers or wipes in common areas for owner and guest use. (notwithstanding the fact that the cost of sanitizer gels has tripled and product is being rationed in some areas.)
Additionally, depending on the course of the virus, and as more information becomes available, homeowner associations may take affirmative steps to discuss with facilities professionals whether any changes are necessary to the equipment serving the common areas over which the association has control, such as the plumbing or HVAC systems in the clubhouse (or possibly the entire building in the case of high-rises.) Consideration must be given to the fact that these upgrades may be prohibitively expensive, and that at present, there is nothing to suggest this would help stem the spread of coronavirus. Additionally, as regards the funding of same, associations must consider whether to spend down their reserve funds, increase the common charges or levy an assessment and what percentage of the board and/or owners would be necessary to approve such expenditures. We also note that consideration must be given to provisions requiring votes of all owners for certain upgrades/changes
Incredibly, there is evidence that at least one dog has contracted the coronavirus. Based on the need to implement additional precautions, associations may need to consider pet restrictions.
Regardless of the outcome, liability and responsibility will fall along lines of ownership, specifically what is the association’s responsibility (common areas) vs. what is the unit owner’s responsibility question. While certainly buildings and associations can and should stay aware and be proactive, at the end of the day, owners will likely be most responsible for their own health and safety.
At Shendell & Pollock we remain readily available to answer all of your COVID-19 related concerns, questions and claims. To discuss this alert further, please contact Gary R. Shendell at email@example.com and Ilana Hanau at firstname.lastname@example.org .
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