New Jersey residents are now one month into the statewide shutdown, as the COVID-19 pandemic continues to disrupt nearly every aspect of our daily lives. At this time, property managers and boards have developed practices to provide for social distancing and routine cleaning, however there are a host of potential issues on the horizon that communities should be aware of, and prepared for.
As a primary matter, associations need to stay informed of the ongoing executive orders, as well as state, and federal legislation. Relevant laws are being issued on a rapid and ongoing basis. Although Governor Murphy’s most significant Executive Orders, No. 107 and 108, issuing the directive to stay at home, and invalidating conflicting local ordinances, there are a variety of other orders and laws that present issues unique to community associations.
FINANCIAL IMPACT – FLATTEN THE CURVE
Associations should pay particular attention to their accounts receivable during the coming weeks and months. As a primary matter, the loss of employment and economic opportunity will likely be passed directly onto the association. Individuals who have a history of accruing arrears on their monthly maintenance fees will likely become worse, and new balances will develop.
Account balances should be addressed on an individual basis, but associations would be wise, in many instances, to become more aggressive in terms of filing liens. Associations may be well advised to avoid offering deferrals of monthly maintenance fees, due to the anticipation of widespread bankruptcies and foreclosures on the horizon.
In negotiating an account settlement or payment plan, associations can request financial information from the property owner, such as proof of job loss, tax returns, and other financial information to help clarify the unit owner’s financial resources.
ONGOING SOCIAL DISTANCING – PRACTICAL TIPS
By now, most associations have developed protocols for sanitizing common areas. Associations can also adopt reasonable rules to limit access to common elements in order to resolve potential social distancing issues. In most properties with a single family, townhouse, or low-rise format, these concerns are lessened. High-rise properties may need to consider adopting rules that are unique to the building, in order to address social distancing needs.
Social distancing requirements dictate that associations restrict access not only to areas that are required to be closed by law, but also those where social distancing is not possible. Tennis courts, gyms, pools, and related non-essential facilities should be locked and posted as closed.
Meetings should continue to be held, but on a virtual basis. Associations are not absolved from conducting the elections that are ordinarily required to be held, but specific practices should be taken in the voting process to minimize exposure to others.
To the extent that site inspections by property managers are essential, managers should be advised to conduct the inspections from their car, and property owners should be notified that they are not permitted to address issues with their manager in person, even if they are on-site, and to make all inquiries on a virtual basis.
In instances of infection, associations need to use their utmost discretion to not disclose the identities of any individuals who have tested positive for the virus, or the association will be subject to liability for disclosing confidential health information.
If associations have any questions about social distancing protocols, both the CDC and the State of New Jersey provide a variety of helpful guidance, and specific inquiries can be addressed to the state COVID-19 hotline.
SPRING HAS SPRUNG – NOW WHAT?
Without the ability to conduct normal construction projects or capital improvements, associations will need to review and potentially renegotiate contracts with service providers. Any non-essential projects will have to be delayed.
As pools remain closed to the public, the association seek to negotiate a reduction in costs by agreeing to pay for less routine chemical and filtration services, to the extent that it is necessary without opening the pool.
Although landscaping services dealing with the maintenance of lawns and vegetation can continue, even minor construction projects, like the construction of retaining walls, are prohibited. To the extent that contracts include such hardscaping services, or other non-essential construction projects, the terms should be reviewed and renegotiated.
Although the residential real estate season may not be as active as it has been in other years, properties are selling and moving companies have been declared an essential business in New Jersey.While not necessary for every community, some properties may require that associations provide notice to neighbors where movers may come into contact with other residents. For high rise properties, where movers will unavoidably breach social distancing requirements, associations should consider banning the movers’ access to the property.
Associations should reconsider or modify any projects whereby the utilization of a contractor may present a social distancing issue due to the project’s access requirements.
Mentioned in this article are just a few of the unique issues that associations will face in the coming weeks and months, as the shutdown is predicted to continue well into the summer. In addition to reviewing guidelines presented by the CDC, State, and Federal government, you may contact any of our community association practitioners with your unique questions, as we continue to serve our clients during these times of crisis.