Page 14 - NJ Cooperator Summer 2020

14 THE NEW JERSEY COOPERATOR —SUMMER 2020 NJCOOPERATOR.COM MACKOUL RISK SOLUTIONS Mackoul Risk Solutions are insurance advisors to over 1,400 condominiums, cooperatives, and HOAs in New Jersey and New York for over 30 years. Our goal is to provide unmatched, quality service by combining the power of digital technology, forward-thinking and a personable, knowledgeable staff. WWW.MACKOUL.COM | 866-MACKOUL | INFO@MACKOUL.COM Visit our website that features various online services including: Request & Print Online Certificates Policy Change Request Video Proposals Client Portal Instant Quote Platform Mackoul School Webinars Claim Reporting INSURANCE MATTERS AND WE KNOW INSURANCE Clickable Coverage WWW.MACKOUL.COM nities (like the gym, for example), prohibit- ing move-ins and move-outs, and stopping fi tness centers, requiring ‘social distancing’ non-essential work and alterations—which in the common areas, restricting deliver- may be unpopular with some.” On the other hand, he continues, “A tion work in common areas and individual board cannot, however, exceed the author- ity granted to it either by statute or its by- laws—though during emergencies, the very mats, acting without having an open meet- authority it is granted permits it to take ing, deferring annual elections and meet- these extraordinary measures.” Sheila Van Duyne, principal of the Van Duyne Law Firm in Reno, Nevada, observes should review their bylaws and governing that “associations and community manage- ment companies are essential businesses— and as such, they continue to operate as ev- eryone is fi guring out how to work around every board be open and communicative the new social distancing requirements that with residents; this allows them to under- now govern our daily lives. Here in Nevada, stand and correspond with the board (via we’ve received several updates and notices electronic means), and helps avoid even the from the Nevada Real Estate Division on appearance of any over-reaching or author- how to best run our associations during itarianism.” this crisis. City, county, and state govern- ments are also issuing frequent updates and to transparency and candor, Hakim says, newsletters on how to continue to operate “Th ere is always a risk that some may feel a functioning business during a pandem- ic. Boards now meet telephonically, or via may sue, whether it is because the board other video conferencing technology. Com- munity managers work in offi ces closed to meeting, eliminated a non-essential service, typical public entry, relying on email and or instituted restrictions that some fi nd phone. Th e work still needs to be done—it overreaching. Obviously, you cannot please just requires diff erent approaches.” Kim adds that “neither the board nor following their own governing documents, management are guarantors of individual or the CDC’s or other government guide- residents’ personal safety, but they do have lines, and advice of counsel, we believe they a duty to act reasonably to avoid foreseeable will generally be protected.” harm. In certain instances, that duty to not act negligently may be similar to the fi du- ciary duty to operate the association in ac- cordance with applicable law and the gov- erning documents, but it’s not exactly the the best thing for us all to do is attempt to same thing. In times of emergency (such as maintain normalcy, if at all possible. Con- now, when a public health crisis has result- ed in both National and State declarations continue to enforce the basic rules of your of emergency, with accompanying restric- tions on both public and private entities), ty going. Th ere are a lot of new technology boards have the authority to exercise their options that can help with these eff orts.” inherent power more broadly than would otherwise apply in ‘normal’ circumstances.” Not that any of that is easy, Kim contin- ues. “Convenience is not even to be con- sidered as a legitimate factor,” he says. “In to take basic steps or fails to adhere to ap- emergencies, you are dealing with compet- ing necessities. Flexibility is key, as well as side of a lawsuit, without knowing wheth- coolheadedness. Panic and extremism can- not be the motivation.” Some Reasonable Actions Even under normal circumstances, a what they should do, and for how long. We board’s decision-making must entail a bal- ance of considerations. During a time such fected, but a board failing to take necessary as the one in which we currently fi nd our- selves, the stakes are raised considerably. A result—possibly counted in the number of board-management team must weigh risks illnesses or deaths, unfortunately. Th is is to the health of their staff and community one of those times where it is far better to as a whole against the necessity of carry- ing out vital tasks and business decisions. Boards and managers must act reasonably, if not well-founded,” says Kim. “In Illinois, with maintenance and cleanliness taking our courts have essentially closed down ex- top priority, along with limiting direct con- tact between the residents, management, and staff . According to Kim, “Restricting or clos- ing down amenities like meeting rooms and ies, suspending any unnecessary construc- units, limiting or prohibiting brokers’ home showings, switching to virtual meeting for- ings are all reasonable responses.” Hakim agrees, and suggests that “boards documents, and should ensure that the residents are following them, as well as any other applicable law. We recommend that Of course, even if a board is committed a board has overstepped its authority and adjourned, rightfully, an annual or other everyone, but to the extent that a board is “HOAs need to make sure our commu- nities are safe, maintained, and fi nancially sound,” adds Van Duyne; that’s their main function and obligation, aft er all. “I think tinue to have your meetings and hearings, association, continue to keep the communi- The Grey Areas Th is crisis is forcing co-op and condo boards and their managing agents to walk a fi ne line, says Hakim. “A board that fails plicable law could fi nd itself on the wrong er its directors’ and offi cers’ insurance would cover such a failure. So far most of our boards have sought legal counsel as to understand that people’s daily lives are af- or preventative steps will have a far worse be safe than sorry.” “Of course, anyone can sue anyone, even HELPING OUT... continued from page 13