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People ask me all the time, what should our community association do about Covid 19.  Of course, you should follow the laws of your country, state, and local governments.  Most deed restrictions and condominium association bylaws don’t address such things as infectious diseases or pandemics in the common elements.   If you ask an attorney, and I have, many of them, and they don’t really know or want to say, which I can understand.  As a board member for your community association, you are duty bound to use your best judgement in all decisions and make those decisions for the betterment of your community (and not only yourself), and to maintain and improve property values. I stress the latter, maintain and improve property values because in my experience, if the answer to any decision you have to make is yes, it does, then chances are you are making the bets decision for your community and fellow members.  It’s a rule of thumb, a standard, a measure that usually always works.

So if you make a decision about Covid 19 that makes your community safer, where a buyer would find that fact attractive to join your community, then it supports your property values, and shows you have an active, involved, vested and caring board.   That image or representation is a good thing and always adds property value.

But I will say, the most people miss something extremely important and bottom line.  Insurance companies have the last say in just about everything regarding community risk and community liability.  Here’s the deal.  Most people have mortgages.  The lenders require the home owner and the associations they live in to maintain adequate insurance.  Lenders won’t lend to buyers buying into a community association unless that community association has all the insurance needed.  Insurance companies inspect the properties they cover, and if they find anything that is “at risk”, they notify the community its association board and/or manager, and require those issues to be repaired or resolved as soon as possible, or they will terminate their policy.  If the association looses their insurance, the lenders will place coverage for the homeowner and charge them a “fortune” for that policy.   And, if coverage cannot be found due to the outstanding risk in that community, a mortgage company can call the loan due. In short, its a disaster for a homeowner if the association does not do whatever it takes to maintain a master insurance policy for the association, on all levels for all risks.  So, when it comes to Covid 19, ask your insurance agent or insurance company.  Tell them what you are doing, and what decisions you’ve made.  Insurance property inspections are usually made right after the policy renews or starts. You can request one also.  If the insurance company inspects, and finds no risk, then you are at least satisfying the insurance company in that regard, when it comes to actions of your board regarding Covid 19.

The reason this is all so important is this.  If your community association gets sured over a Covid 19 or health related issue, a claim would be made to the insurance company, director and officers liability policy, to defend your association in that law suit.  They would provide an attorney to do that.  They will review the case, inspect the property, interview the board and management, and assess the situation.  If the board and management has not been grossly negligent, they will most likely defend all actions on your behalf.  Your out of pocket cost for that will be your policy deductible, which in most cases is $1,000.  Your association may have to make some repair or improvements (or not), or adopt policies and/pr procedures that would eliminate the risk involved.

So ask your insurance agent for guidance and advice when it comes to Covid 19 decisions.  If you don’t feel you can make a decision, or use best judgement for lack of facts or experience, ask an expert to assist.  In this case your insurance agent is an expert at determining risk, as it relates to insuring your community.  I suppose its a toss up of who is better qualified to assess risk, an attorney or an insurance agent.  Each looks at it from a slightly different perspective.  An attorney will talk to you, especially if they can bill you for their time.  But the advice form your insurance agent will probably be free.  If you have to pay for an inspection or a risk assessment letter, it may be money well spent.  You can argue over a decision to open or close a community pool, clubhouse, exercise room, or common area.  But if your insurance company says you are fine, and not at risk, and even if there is a risk they will defend you and your decisions, then what more comfort do you need that an answer like that.

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