Page 6 - New England Condominium May 2021

6 NEW ENGLAND CONDOMINIUM
-MAY 2021
NEWENGLANDCONDO.COM
Liability, Cost, & Reopening Amenities
The Summer of COVID-19, Round 2
BY A J SIDRANSKY
Last spring, amidst the panic and confu-
sion of the burgeoning pandemic, condo-
minium, co-op, and HOA communities were
faced with the difficult task of deciding what
to do about their shared amenities. Gyms,
pools, clubhouses, and other popular ameni-
ties were closed as a hedge against infection
by a little-known enemy—though commu-
nity leaders and boards of directors hoped
at the time that the closures would be tem-
porary. The thinking was that as more was
known about the virus and its transmission,
and then as the pandemic waned, a return to
normalcy would await us.
Now, a full year into the worst public
health crisis in over a century, we seem to
be faced with conditions not much differ-
ent from back then. While our knowledge
about the virus is certainly greater, and
mass vaccinations are underway through-
out the United States, we’re still facing a
second summer of COVID-19—now with
new factors of increased costs and liability,
continued misunderstanding of the short-,
medium-, and long-term realities of CO-
VID-19, and perhaps most difficult of all
to maneuver: politics.
At the heart of the matter is whether
boards and residents are comfortable with
reopening, and what the basis for their de-
cision to do so or not is. “Most adoption
of rules for reopening gyms are born out
of Department of Health and Governors’
office recommendations and regulations,”
says Dan Wollman, CEO of Gumley Haft,
a real estate management firm in New
York City. “In those buildings where we
have opened or are planning to open gyms,
we are suggesting a ‘one person, one fam-
ily,’ policy. In New York, the Department
of Health does a virtual inspection, start-
ing with your building canopy to confirm
your address. They then render a decision
of whether or not you can reopen based on
a video tour. It takes some time. With re-
spect to other amenities—for instance, we
have one building with an open-air space
on a garage roof with benches, trees, and
walkways—rules were promulgated by
board members with our counsel, using
reasonable common sense based on how
one can catch COVID-19. For example,
they instituted time limits and sign-ups to
use the space.”
Liability
Perhaps the greatest impediment to com-
munities reopening their amenities—even in
full compliance with CDC and other health
department recommendations—is the fear
of liability. Surveys of insurance providers
and brokers have indicated that insurers have
taken a position against most if not all CO-
VID-19 claims, stating that viral infections
and whatever results from them are excluded
under existing coverage and policies. Insurers
refusing to entertain any claims potentially
moves liability to associations, corporations,
and even individual board members—a risk
many are loath to take on. Hence, there is a
high likelihood that many community ame-
nities will simply remain closed this spring
and summer.
Joe Balzamo is the COO of AR Manage-
ment, a property management firm located
in New Jersey. According to him, “One of the
biggest problems right now in terms of open-
ing amenities is that insurance companies
don’t cover viruses, etc., as part of their cover-
age. The impact is simple: if someone gets sick
and sues the association, there’s no ability for
the insurer to validate the litigation. Associa-
tions would own the litigation and the claim.
All the risk is on the association.”
Glen Masullo, president and managing
partner with Preferred Community Man-
agement Services located in Somerset, New
Jersey, concurs. “A major block to unilaterally
opening pools and other community ame-
nities is legal issues. Insurance doesn’t cover
these claims currently. Members of the board,
association, and even vendors can be sued
personally. As concerns this coming season,”
continues Masullo, “the insurance issue hasn’t
gone away.”
“There are always liability concerns,” says
Scott Piekarsky, an attorney with Phillips
Nizer in New Jersey. “People may get injured
due to the pandemic through infection. We
have these concerns again this year—people
getting ill, and the ramifications of that. Aside
from health and safety and legal compliance,
one big issue is what insurance companies
will cover. A condominium association is a
business, and boards have a fiduciary duty
to protect the members. We are hearing
now that if someone gets COVID and sues
the association, insurance will not defend or
indemnify. No defense and no payout, until
this is adjudicated. Coverage litigation actu-
ally started last summer, and I think we’ll see
an increase in cases—we’re seeing it now, and
eventually we may have a category of cases
called ‘COVID-19 cases’ being filed in the
courts.”
Cost
Another serious issue facing boards if they
decide to reopen their amenities is the cost in-
volved with doing it. Various agencies at the
state and local levels have established rules
for social distancing, masking, and cleaning;
some even have requirements for extra clean-
ing staff and personnel to observe and main-
tain crowd control within the amenity area.
Such rules may make it impossible for some
communities to foot the additional costs in-
volved with reopening.
Stephen DiNocco, a principal with Affin-
ity Realty and Property Management, located
in Massachusetts, recounts that last year the
board of health that governs some of his com-
munities “made such difficult rules that many
communities couldn’t open.” In one case, he
says, “the property had more than 1,000 resi-
dents, but the regulations didn’t permit more
than 20 people in the pool at one time. After
one use of the bathroom, it had to be cleaned
and disinfected. The children’s pool wasn’t
permitted to be used at all. Many boards are
saying it’s just not financially practical to re-
open. Too much additional personnel for su-
pervision and logistics—they can’t afford the
extra staff.”
Understanding the Realities of
COVID-19
Another factor in planning for the sum-
mer and the future in general is the way board
members and residents of condominium as-
sociations and co-op corporations under-
stand and view the crisis. Is it long-term, or
will it end and life return to pre-pandemic
reality?
The facts on this are still unclear, but
there is a growing consensus in the medical
and scientific communities that COVID-19
will be with us for a long time, if not forever.
While the national vaccination campaign is
underway, increasing evidence points to this
virus looking a lot more like the flu (reemerg-
ing with varying severity each season) than
something like polio (eradicated completely
after vaccination of the general population).
It’s unlikely that vaccination for COVID-19
will be ‘one and done.’ Some of the current
vaccines require two doses, and with talk of
new variants daily, experts are increasingly
suggesting a booster shot will be needed,
most likely on an annual basis.
According to DiNocco, “One thing that
has been in the back of people’s minds is that
this is a temporary situation, and will end. So
they ask themselves, ‘How much effort should
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