Creative Solutions for Difficult Situations
Coop, Condo and HOA Employers can mandate Covid Vaccines in Most Cases
Coop, condo and HOA employers can mandate that most employees be covid vaccinated according to the new pronouncement by the EEOC. However employers can’t violate provisions in the American with Disabilities Act (ADA). They should also adhere to religious exceptions, local and state law, among other considerations. Tread carefully and watch for new Occupational Safety and Health Administration (OSHA) guidelines as to safety measures in the workplace.
Can Boards Require Covid Vaccines?
Over the next year, Covid-19 vaccines will hopefully become readily available to the general public. Boards of community associations will undoubtedly have to decide on vaccines. Can they mandate them of employees? Can they mandate that resident owners be vaccinated? How about tenants? How about property managers and other independent contractors? Will vaccines become a competitive advantage for contractors selling their wares or services because they are 100% vaccinated? Boards will have a lot to consider and ought to get current legal advice before making any business decisions on vaccines. This is a new world that we are experiencing, but there are all sorts of laws that have to be considered and new ones are sure to be enacted as we muddle through.
With respect to employees, the landscape is getting clearer but the answers are still a little cloudy. Soon enough someone will be fired or not hired because they are not vaccinated and we’ll have some case law to guide us. Here’s were we are on employees.
Mandatory vaccinations are not new but have been historically limited to health care and education market segments. While there is no clear legal prohibition on mandatory vaccines in the employment context, these requirements are subject to several legal exceptions, most notably accommodation for disability, religion and pregnancy.
On December 16, 2020, the Equal Employment Opportunity Commission updated its COVID-19 guidance to express the agency’s views on the legal implications of COVID-19 vaccine under the Americans with Disabilities Act (ADA), Title VII and other EEO laws. The EEOC’s guidance is not binding on courts, but it is expected to be highly influential. Key takeaways from the guidance are as follows:
- A vaccine is not a medical examination under the ADA, but pre-vaccination questions answered by an employee as a part of an employer’s vaccination program may be ‘disability-related inquiries’ under the ADA that should be avoided absent business necessity.
- Employers may need to accommodate an employee with a disability who cannot take the vaccine because of that disability.
- Employers may need to accommodate an employee’s sincerely held religious beliefs or pregnancy, if either prevents an employee from taking the vaccine.
To date, the Occupational Safety and Health Administration has not taken a position on whether an employer can require the COVID-19 vaccine or must at least offer it to meet statutory safe workplace obligations.
Then there is the question of unionized employees. What does the Collective Bargaining Agreement in place say. There is no real question that the adoption of mandatory and non-mandatory vaccination programs by unionized employers are a mandatory subject of bargaining. But that does not mean that employers cannot start a vaccination program or require vaccination.
Employers with current union contracts should start by examining the management rights and other provisions of their contract to determine if they are broad enough to waive a union’s right to bargain. Even in the absence of a management right to proceed, most employers can still bargain over vaccine program issues with their unions. Most employers will also benefit from keeping their unions involved even if there is a management right to proceed with a vaccination program, as doing so can assist with employee buy in and avoid grievances (and adverse arbitration results).
Aside from the above, board employers need to consider the fact that while many employees may embrace vaccination without hesitation, a large percentage of people are reportedly skeptical or concerned about side effects or other unknown health implications. As time goes by and we learn from experience in vaccinations and their hopeful positive effect, people will likely be less concerned and apprehensive.
In the end, coop, condo, HOA and other community association boards. have to act in the best interest of their association communities. Making decisions on vaccinations are likely going to be on the board meeting agendas soon enough. Navigating these uncertain times is difficult without experienced professional advice.
Both Landlords and Tenants may be Better Off Working Out Covid Decisions Sooner than Later
Stay, go. Throw them out, keep them. Tenants and landlords will have to decide which route they want to go in these challenging economic times. The Covid pandemic has wrecked havoc on the real estate market and may continue to do so for awhile.
Tenants aren’t paying rent because they didn’t plan for these circumstances, or are just looking to renegotiate for better terms. Landlords with those nonpaying tenants are struggling as well. Some are over leveraged themselves with big loans to pay, taxes, other operating expenses, etc. that continue on irrespective of whether the tenants are paying. Without rent being paid, however, landlords risk default on their own obligations which can be crippling.
When disputes happen, there is always the landlord-tenant courts, but the pandemic has negatively impacted the court system as well. With a flood of nonpayment and eviction cases on hold when the court’s closed at the beginning of the year, there is an extreme backlog of cases and courts are still not open for in person appearances in many places, making virtual appearances the new norm. Judges, as well as the attorney bar, are slowly figuring things out, but cannot be relied upon as a quick fix to the economic and other woes of landlords and tenants.
We are seeing a lot of compromise across the negotiation tables. The parties are negotiating away rights. Sometimes deferring rent so that it will eventually become due, and in other cases, forgiving rent obligations. Tenants who want to stay in business, especially ones with personal guaranties backing their leases which are harder to run away from, are compromising as well. Sometimes, just turning over the keys to the landlord to allow for a new rental with a paying tenant is the best course of action. In those instances, landlords may recover possession but filling the space with a financially capable replacement is sometimes daunting; especially now.
As we progress through this pandemic, there is likely going to be a ripple effect on the economy from non-paying tenants and landlords who both aren’t willing to budge. Landlords who can’t easily get possession and still have to carry their debt and other business obligations, sometimes have to give in a bit in order to keep the tenants in business in hopes that they can start paying again. The word bankruptcy is being thrown around a lot these days, sometimes as a negotiating point by tenants. The risk of tenant bankruptcies is real and at the end the landlords are still left holding the bag of their own financial obligations.
Appreciating all of this, tenants and landlords are best to try to work out their differences early on and perhaps share the pain in renegotiation deals if it makes sense or negotiating early exists by a tenant if that makes more sense. Addressing the issues up front rather than kicking the can down the road to see what happens may be in everyones best interest. In the end, if too many cans are kicked it is going to get even more difficult to achieve a swift economic recovery which is in the best interest of both landlords and tenants.
Paycheck Protection Program seemingly opened up to Cooperatives but maybe not Condos – Call your Bank to be Sure ASAP
PPP loans for coops may have finally arrived. Call your bank asap. Unclear regarding whether condos are qualified as well. Condos should call their banks as well just in case.
Read more in a Habitat article here.
Arbitration – Boards and Owners See it through Different Lenses
Many bylaws include an arbitration provision. Something like, any dispute between the Unit Owners and the Condominium shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association and that the decision in any arbitration shall be binding upon all of the parties thereto and may be entered in any court of appropriate jurisdiction. Complaining unit owners often overlook it and boards may stay away from it. Some argue that an arbitration agreement in the condos governing documents only applies to breaches under the governing documents and not disputes outside the four corners of the documents; however, the usual “any dispute” and “shall be submitted” language in an arbitration provision, is awfully broad and arguably goes beyond the four corners.
That said, there are drawbacks of arbitration. For example, discovery is not a right of the parties (that is, unless the arbitration provision covers discovery. Instead, an arbitrator or even a arbitration panel of several decision makers, decides whether the parties need discovery. Another issue is getting discovery from third parties. Although an arbitrator or panel can subpoena third parties to testify at an arbitration hearing, there is no right to subpoena third parties for pre-arbitration discovery. The third party can simply ignore a subpoena and unlike a court, an arbitrator is essentially powerless to compel compliance.
Some people believe that arbitration is a less expensive approach that a litigation, but that is not always the case. Some arbitrations can be as contentious as litigations and sometimes take longer than a court lawsuit.
Unit owners and boards should consider what their governing documents say about arbitration and if appropriate in a given case, consider arbitration instead of litigation. Consulting with counsel who is experienced in both litigation and arbitration like Colbert Law, is always recommended.
Insulating Yourself from Personal Liability for Your Business
Serendipity Labs Westport Presents
Insulating Yourself from Personal Liability for Your Business
September 23rd, 2020 3:00-3:45PM| Q&AtoFollow
Many people know that in order to protect their personal assets, they need to incorporate their businesses. For example, forming an LLC for their business is a good first step. However, much more is necessary. Owners often fail to appreciate that if they do not observe corporate formalities and operate their businesses in a particular way, their personal assets could be exposed irrespective of the initial incorporation. Attorney Joe Colbert who serves as general, corporate and litigation counsel for many businesses will discuss the exposure points and how to avoid them so your personal assets are protected.
Joseph Colbert has practiced business law for over twenty five years. Among New York?s and Connecticut?s most successful and prominent attorneys, Joe has been identified among the top attorneys in the tri-state area. He is a general practitioner who focuses on the representation of organizations and individuals as general, corporate and litigation counsel. Joe taught as an Adjunct Professor Law for many years and also serves as a mediator and arbitrator. Colbert Law has various practice areas with offices in New York and Connecticut (www.colbertlaw.us).
Register at Link Below:
https:/ / serendipitylabs.zoom.us/ webinar/ register/ WN_pPJzAP0ORtyOIbdEXNrcJQ
Serendipity Labs Westport
55 Post Road W, 2nd Floor | Westport, CT 06880
New York Governor Tolls Statute of Limitations Again
New York Governor Cuomo has been issuing a lot of Executive Orders this year because of the Coronavirus Pandemic. One of the more important ones for aggrieved parties and their attorneys involves statutes of limitations. The time that a complainant has to commence a lawsuit before it is barred is called a statute of limitations. During the Coronavirus Pandemic, states like New York have temporarily stopped (or tolled) statutes of limitations from running. This has been done in a series of Executive Orders by the Governor.
It has been difficult, however, to follow the Governor’s tolling of statutes of limitations in those hodge podge of Executive Orders. There has been little news about it and only a few random articles debating if the tolls will stand up in Court. Creative lawyers will undoubtedly try to argue that the tolls are not constitutional or otherwise legally effective, but they have been essential to lawyers and aggrieved parties. Because courts have been closed and clients and lawyers haven’t been able to meet and confer easily, tolls to maintain the status quo were the right solution. There will be an end to the tolls, but when that will happen is not clear.
The first Order was Executive Order 202.8 on March 20, 2020, tolling to April 19, 2020. Thus, if there was 5 days left on a statute of limitations on March 20th, there would still be 5 days left to sue on April 19th. The Governor clearly stated that:
In accordance with the directive of the Chief Judge of the State to limit court operations to essential matters during the pendency of the COVID-19 health crisis, any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state, including but not limited to the criminal procedure law, the family court act, the civil practice law and rules, the court of claims act, the surrogate’s court procedure act, and the uniform court acts, or by any other statute, local law, ordinance, order, rule, or regulation, or part thereof, is hereby tolled from the date of this executive order until April 19, 2020
About a week and a half before the toll was to expire on April 19th, the Governor issued Executive Order 202.14 on April 7th, giving attorneys a cushion of time to react in case the toll wasn’t extended. That time the toll was extended to 11:59 pm on April 29, 2020. The language of the Order, however, was cryptic, and buried amongst paragraphs and paragraphs of other provisions. Indeed, the Order read:
By virtue of Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), all such Executive Orders shall be continued, provided that the expiration dates of such Executive Orders shall be aligned, such that all in-person business restrictions and workplace restrictions will be effective until 11:59 p.m. on April 29, 2020, unless later extended by a future Executive Order.
As we approached April 29th, on April 16th, the Governor issued Executive Order 202.18, extending the toll again to 11:59 pm on May 15, 2020. The trouble with this Executive Order is that the language again was buried, and the www.governor.ny.gov website, had the wrong link for 202.18 as 202.19, so you couldn’t find it (its still hasn’t been corrected). Executive Order 202.18, provides that:
Executive Order 202.14, which extended the provisions of Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which each closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), is hereby continued, provided that the expiration date of such provisions of such Executive Orders shall be aligned, such that all in-person business restrictions and workplace restrictions will be effective until 11:59 p.m. on May 15, 2020, unless later extended by a future Executive Order. All enforcement mechanisms by state or local governments shall continue to be in full force an effect until May 15, 2020 unless later extended by a future Executive Order
On May 8th, the Governor acted again on the toll, issuing Executive Order 202.29. The new toll was to Sunday, June 7, 2020. Again, buried in the Order, the Governor said:
I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by Section 29-a of Article 2-B of the Executive Law, do hereby continue the suspensions and modifications of law, and any directives, not superseded by a subsequent directive, made by Executive Order 202.15, 202.16, 202.17, 202.18, 202.19, 202.20, and 202.21, for thirty days until June 7, 2020
On Friday June 5th, decisions had to be made by attorneys for clients impacted by the toll. No Executive Order granted another toll arrived and it was not clear whether the toll would be extended again. The Supreme Court in New York opened for electronic filings of new lawsuits, so it was possible that the Governor was not going to extend again. However, court’s like the New York City Small Claims Court do not accept electronic filings yet, so it was not possible to file a new lawsuit there.
On Sunday June 7, 2020, the day that the toll was set to expire under the last Executive Order 202.29 (albeit, it wasn’t clear what time on June 7th it would expire because the last Order did not specify a time), the Governor on Sunday June 7th, issued Executive Order 202.38, extending the toll to Monday July 6, 2020, providing in a cryptic way that could only be deciphered by people following the chain of Executive Orders for months:
I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by Section 29-a of Article 2-B of the Executive Law, do hereby continue the suspensions and modifications of law, and any directives, not superseded by a subsequent directive, made by Executive Order 202 and each successor Executive Order up to and including Executive Order 202.14, as continued as contained in Executive Order 202.27 and 202.28 until July 6, 2020.
Until all of the New York State courts allow commencement of new lawsuits, the toll has to be extended so that the status quo is maintained. Otherwise, statutes of limitations could be missed and claims lost. Lawyers and their clients need to be aware of this important issue and make sure they are protected. As July 6th approaches, my hope is that tolls will no longer be necessary as we have arrived at our new normal.
Lenders are excluding Coops, Condos and HOAs from the Paycheck Protection Program
This is a follow up from our article on April 3rd about the Paycheck Protection Program (“PPP”). Read the article.
Our observation then that it did not seem that the PPP was going to apply to coops, condos and HOAs, is turning out to be true. Some people in the industry still feel that the PPP should apply and are likely going to lobby for a change but for the time being it seems that community associations are excluded.
For example, the National Cooperative Bank’s (NCB) website (https://www.ncb.coop) specifically provides now that “Unfortunately, housing cooperatives, condo associations, and homeowner associations are not eligible for this program.”
Stay tuned for more, but for the time being it seems that managers and boards who were gearing up to apply for their associations will not be able to do so for the time being.
The Treasury Department has not yet officially said that community associations are not eligible for PPP, but as we explained in our article last week, it does not seem that community associations would be eligible. Now that lenders are speaking on this issue, the lobbying for community associations is sure to follow to try to change things. While the PPP may not end up applying to them, other programs may open up for community associations; particularly ones struggling with labor expenses like any small business. We often say that community associations are small businesses which should be governed as such by their boards, the government should acknowledge this reality and open programs to help them.
As previously suggested, if such programs become available, coops, condos and HOAs should get ready now and make sure that their governing documents allow their boards to participate in the programs without first obtaining owner approval. Reviewing your governing documents now to anticipate and address any such hurdle is a good idea because some programs like the PPP have limited funding which may be on a first come, first serve basis. Be ready or you may lose out on a limited opportunity.
What’s a Condo, Coop or HOA Board to do regarding Ongoing or New Contracts in light of COVID-19?
The social and business impacts of Covid-19 were largely unexpected. When community associations entered into agreements that are still ongoing, they didn’t have delay or termination provisions for things like Covid-19. So, what’s a board to do regarding these contracts where the board or the vendor or contract can’t perform because of the impacts of Covid-19? For future contracts, provisions can be added to address concerns with Covid-19. Your counsel should make sure that new contracts protect your association in this new world in which we are living.
The more difficult issue is what to do about those existing contracts. Will the contractor be able to delay the completion of the contract, or even cancel the contract altogether? Is the association able to do the same? In most agreements we try to negotiate in a termination provision which allows a board to terminate for no reason at all. These are commonly referred to as termination for convenience provisions. The contractor may be entitled to charge for out of pocket or other expenses or may even be able to recover a portion of profit for the job, in return for a termination by the board. It really depends on what the contract says. So, the first thing you should do is review the contract and see what it says. If there are notice provisions, make sure you comply with them. If it says notice has to be by certified mail return receipt requested, then make sure you mail notice that way.
Another provision in many contracts is called a “force majeure” or “acts of God” clause. Such clauses generally protect the parties in the event that the contract or a part of the contract cannot be performed due to causes which are outside the control of the parties and could not be avoided by the exercise of due care. The relief that is requested is typically a suspension of the parties’ obligations under the contract during the “force majeure” event and, if the event continues for an extended period, the right to terminate the contract.
In order to obtain this relief, a party to the contract will need to prove that the event that has materially impacted or rendered impossible the performance of the contract, falls within the definition of “force majeure.” Secondly, the party will need to satisfy any notice provisions and other preconditions that specified in the agreement. These preconditions may require that the parties to the contract take reasonable steps to mitigate the losses caused by the event.
Although it may seem that a “force majeure” clause must be applicable with COVID-19, that is not the case. It is a fact intensive analysis and the party on the other side of the contract who doesn’t want to get out of the contract will argue that the clause does not apply. A party looking to implicate the clause should consider both the direct impact that COVID-19 may have had on the contract as a pandemic, as well as the effect that government actions, including travel restrictions, shelter-in-place or stay-at-home orders may have had. In other words, the applicability of the “force majeure” clause in a contract just because of COVID-19 is not a slam dunk argument.
An issue that has come up several times since the pandemic has involved license or access agreements with neighbors. A coop, condo or HOA performing exterior work may have had to access neighboring properties in order to protect them. Neighbors often enter license or access agreements which include time frames for access and penalties for exceeding the time frames. Sometimes, neighbors aren’t that neighborly and try to impose sanctions for exceeding time frames for access. With COVID-19 stop work orders by the government, construction and required access to a neighbor’s property may take much longer than originally anticipated. This can be an issue for the coop, condo or HOA performing the work.
In many cases, neighbors are all in the same boat and if they are good neighbors they will be accommodating and not try to stick it to their neighbors who cannot possibly complete the work within the anticipated time in the agreement. The end result will depend on what was negotiated in the contract before COVID-19 became a household word. What difficult neighbors should be reminded of is that one day they will be looking for their neighbor to be neighborly and perhaps they ought to reconsider being difficult in these trying times. My sense is that Court that may have to address these types of issues down the road will not be very favorable to difficult neighbors in light of the COVID-19 crisis.
Any association that is in the midst of a contract may want to review their options during this crisis. Associations may also be approached by a contractor seeking to delay or even end an ongoing agreement. Pulling out the contract and reviewing your board’s legal options sooner than later is the best approach.
