New law protects NJ homeowner associations from COVID lawsuits

New Jersey has a new law that’s designed to allow real estate homeowner associations in the Garden State to open their swimming pools, clubhouses and other amenities without fear of getting sued if someone claims they got COVID-19 on the premises.

After many homeowners associations closed their common areas at the start of the pandemic because of COVID fears, legislation, A4979, S3584 was crafted this spring, passed by the Legislature a few weeks ago and then quickly signed into law by Gov. Phil Murphy.

George Greatrex, an attorney for the New Jersey Chapter of the Community Association Institute, and chairman of the Association’s legislative action committee, said the new law is designed to provide immunity from civil liability to a planned real estate development, until the end of this year, for damages arising from a COVID-19 exposure or transmission on the premises.

“My understanding is the vast majority of associations have in fact opened their recreational amenities,” he said.

However, some have not.

He said there are associations that “still do not feel comfortable that the bill itself is going to provide them with the protection that they were looking for.”

Greatrex said out some attorneys believe the language of the bill “is open to interpretation and it’s not as clear as it could be. Frankly I don’t know any law that is as clear as it could be.”

He pointed out even with this law on the books someone who tests positive for COVID “could still have an attorney file a lawsuit against an association, and that means that association would have to defend itself.”

He said the problem is this kind of claim would not be covered by most association’s insurance. “That means they would have to pay for that lawyer out of their own operating funds.”

He said from the very beginning of the effort to craft legislation to shield homeowner associations from possible COVID lawsuits the intent has always been to protect the associations, the board members, property managers and everyone else working on behalf of an association.

“I would feel fairly confident that associations can safely reopen their amenities,” said Greatrex. “But I’m just one lawyer with one interpretation, although I’ve been there from the beginning of the bill and I know what this bill is about.”

The new law spells out homeowner developments should display a warning at the entrance of any communal space, stating they have immunity from civil liability from a COVID claim.

But this immunity would not apply to acts or omissions constituting a crime, actual fraud, actual malice, gross negligence, recklessness, or willful misconduct.

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com