Ira Brad Matetsky in Board Operations on July 28, 2020
Four months after the pandemic descended, New York City co-op and condo boards – like all Americans – can be forgiven for feeling coronavirus fatigue. But there’s no rest for the weary. As the city moves through its phased reopenings, boards need to shift from their initial concern over safety precautions and begin addressing two looming challenges: protecting themselves from legal liability; and getting back to routine governance matters that have been largely put on hold.
All businesses that have reopened were required to adopt a COVID-19 safety plan and file an affirmation of compliance with the state. The safety plan must be posted in the workplace, distributed to employees and, most importantly, it must be complied with. Any employer or business that has not yet adopted a safety plan should do so at once. Co-ops or condos that do not yet have a written safety plan in place should consult with their legal counsel or managing agent regarding what is required. The Real Estate Board of New York, Local 32B-J of the Service Employees International Union and the Realty Advisory Board have also adopted joint guidelines for boards and landlords. These are updated from time to time and posted on the REBNY website.
Failure to take reasonable steps to protect employees and residents from the virus may constitute unsafe working conditions in violation of federal, state or local laws. In at least two cases outside New York, labor unions went to court and obtained injunctions against owners who were operating workplaces without acceptable safety precautions. In addition, a co-op or condo board that fails to document and follow proper precautions could face litigation if someone contracts the virus on their property. With the guidelines, sample forms, and professional advice available in New York, there is no reason to run these risks. Boards must protect people from the virus and themselves from legal liability.
Case in point: with apartment alterations resuming in many buildings, outside workers are once again entering common areas and individual apartments. If they have not already done so, co-op and condo boards should adopt modified forms of alteration agreements, which will require that in addition to the other usual requirements, health and safety measures be put in place to mitigate the risk of spreading the virus. Similar precautions should also be in place with respect to move-ins and move-outs and for other situations in which non-residents are again being allowed access to the premises. Legal counsel can help tailor the right policies for a specific building’s circumstances. As always, it is important to document the board’s decision-making in the board meeting minutes.
Boards also need to make sure that management complies with federal, state, and local sick-time laws and regulations affecting building employees. This is especially important with respect to employees who may contract the virus, come into contact with someone who has contracted it, or have virus-related family responsibilities.
Which brings us to the numerous challenges that have been put on hold while boards have been consumed by the pandemic. For example, boards are still required to keep records of any transactions involving potential conflicts of interest for inclusion in the annual disclosure report. And boards must determine whether and how to conduct an annual meeting at a time when an ordinary, in-person shareholder meeting is not possible, especially for larger co-ops and condos. Virtual annual meetings are now allowed under the Business Corporation Law, and many co-op boards are making the leap.
Perhaps most important, it appears that the COVID-19 crisis will not result in any extension of the timetable for meeting building carbon emission thresholds under Local Law 97, known as the Climate Mobilization Act. Fines will be imposed beginning in 2024 for non-compliant buildings, then more stringent thresholds arrive in 2030. Pandemic or no pandemic, now is the time to start planning for ways to retrofit buildings to comply with this far-reaching law. For boards that may have put these and other non-virus-related matters to one side while dealing with the emergency, it is time to focus on them again. No rest for the weary, indeed.
Ira Brad Matetsky is a partner at law firm Ganfer Shore Leeds & Zauderer.
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