Guidance for Governing Your Condominium or Homeowners Association in a Post COVID-19 World
April 28, 2020
By Marilyn Le Lodico,Esquire
Condominium and Homeowners Associations are facing a new landscape of challenges to navigate in a Post COVID-19 world. As our communities start to open back up, leaders of Associations must reexamine their operations to make plans to accommodate on-going COVID-19 concerns. The following article does not provide legal advice but is meant to provide general guidance for Associations within Pennsylvania and their members to address COVID-19 concerns, keep their communities safe, and ensure Association actions are properly authorized.
Identify Strategies and Confirm Authority to Accommodate On-Going Social Restrictions and Safety Concerns of the Condominium or Homeowners Association Community
As of the date this article, all of Pennsylvania is under the Governor’s Stay At Home Orders but the Governor has announced plans for gradually reopening society and lifting the Orders. The plans include a transitional phase with limits on group sizes for gatherings. Even after the government-imposed restrictions are lifted, individuals who have a high risk for severe illness will likely continue to be on guard. Therefore, Associations must plan to adjust their operations to comply with on-going social restrictions and address the safety concerns of the members in the community.
Limit Gatherings in Common Areas to Comply with Government Orders and Protect Members’ Safety
Condominium and Homeowners Association communities possess common areas that typically benefit all unit owners and members. Common areas can be amenities such as recreational rooms, green spaces, gyms, pools, walking paths, and driveways. The rules regarding members’ rights with respect to common areas are set forth in an Association’s Declaration, which is a public document that confirms certain property rights of the members.
Associations should notify its members of temporary restrictions on gatherings within common areas in order to comply with the Pennsylvania Governor’s Stay At Home Orders. Organizations and individuals who fail to comply with the Pennsylvania Governor’s Stay At Home Orders will be subject to penalties that can include fines and imprisonment. The authority of an Association to place restrictions on common areas during this crisis arises from its duty to comply with the Orders issued by the Governor and Secretary of the Department of Health Orders and the state laws that empower those offices. This means an Association can restrict access to common areas and effectively override language in the Association’s Declaration, only to the extent necessary to comply with government orders and state law.
Some Associations may be interested in continuing certain restrictions in common areas even after the Orders on large gatherings are lifted, perhaps due to a high number of members who are at risk of severe complications from the Coronavirus. If a Condominium and Homeowners Association wishes to continue restrictions to common areas after the Governor lifts the Stay At Home Orders, such actions will need to be properly authorized and in compliance with the Declaration. Associations should consult legal counsel if there is interest in prolonging restrictions to common areas after the Stay At Home Orders and restrictions on gatherings are lifted, to confirm the proper procedure to implement such measures.
Permit Members to Participate and Vote in Meetings Remotely
Participation and voting during meetings are the most critical rights of members in a homeowners or condominium association. It is how members protect the value of their properties and protect their access to the community amenities.
Associations should allow members to participate remotely through the use of technology such as video conferencing or conference calls or through a voting proxy, where a voting member delegates a representative to vote on his or her behalf. Associations will need to examine their governing documents to confirm such measures are approved methods of meeting participation and voting and make amendments to the documents if necessary. An Association’s governing documents are its Declaration and Bylaws. The Bylaws are used to set forth the rules for how the executive board of the Association should operate and how executive board members are elected. Associations must make sure the Declaration permits methods of remote participation and voting in meetings by members. The Bylaws may also address the issue of how members may participate and vote in meetings but it is not required.
If your Association needs to amend its governing documents to accommodate remote means of participation and voting in meetings, contact the Association’s legal counsel to confirm the amendment procedure given the language in the governing documents and applicable law. Such amendments could specify a procedure for how members would notify the executive board in advance of using a remote method of participation or voting and if video conference or telephone conferencing is being used, the specific applications that are permitted, such as Zoom or Skype.
Members of the executive board should also be permitted to participate in board meetings remotely using technology or through a voting proxy. This would be authorized through the Association’s Bylaws. The procedure to amend the Bylaws will be based on the language in the governing documents and applicable law. Again, Associations should consult legal counsel to confirm the procedure for Bylaw amendments.
Acknowledge the Financial Effects of the Crisis on the Association Community
The measures imposed to slow the spread of the Coronavirus have been devastating on the economy, resulting in historic numbers of individuals out of work. Associations will need to prepare for members in the community to be affected financially due to this crisis.
Plan for Delinquent Payments and Consult Legal Counsel before Commencing Collections
Associations will need to examine their budgets and planned expenditures, taking into consideration a possible drop in assessment payments. Associations should consult legal counsel to ensure any collection practices for unpaid assessments are in compliance with state law. Associations have an advantage over some creditors due to their ability to lien the unit of a member for the member’s unpaid assessments and will need to consult legal counsel to ensure proper procedure is followed to protect the Association’s interest. There have been various governmental efforts on the state and federal level to assist homeowners who are unable to meet the expenses tied to their real property. It is critical for Associations to consult legal counsel and stay up to date on any new governmental measures that may affect their ability to collect on unpaid assessments or bring a collection action in court.
Considerations for Charitable Giving in the Association Community
There may be interest among Association members to participate in some type of charitable giving in the community due to the needs created by the Coronavirus crisis. The Association will likely need to separately solicit for and create a separate fund for such expenditures rather than using Association reserves. The Association’s reserves were likely accrued from annual assessments, which must be used for certain purposes as specified under the Declaration like maintenance of the common areas. Reserve funds that are restricted by the Declaration cannot be used for ad hoc charitable giving. The Association’s legal counsel will be able to provide more specific advice to the community on its options.
Rothman Gordon’s Real Estate Practice Group attorneys are available to answer your questions regarding your Condominium or Homeowners Association. Contact us online or call (412) 338-1100.