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BLOG / 03.31.20 /Kenneth R. Jacobs

Coronavirus: State & Federal Updates – Who’s “Essential” Now?

STATE UPDATES

The list of occupations deemed “essential” – which means that employers don’t have to close, and their employees don’t have to remain at home – is being refined daily. Doormen were excluded, only to be reinstated a day later. Landscapers have now been deemed “essential”, to the relief of many suburban communities. Property Managers are also considered essential to maintaining the safety of residents. So most building service personnel remain able to perform their work for the Association.

What about Construction? Initially construction was considered “essential,” without any limits, but as of Friday that changed. Now construction is barred except to protect the health and safety of building occupants, or to maintain infrastructure (roads, bridges, transit facilities) utilities, hospitals or health care facilities, affordable housing, or homeless shelters. Work required to the point of making conditions safe (if immediately stopping a project would leave it in an unsafe condition) is also permitted. Interestingly, a job utilizing only a single worker is not considered “construction work,” and therefore can continue.  Contractors are also expected to maintain “social distancing” to the extent possible.

Banning Gatherings. Executive Order 202.10 is almost five pages long, and devoted almost exclusively to expanding the ability of doctors and medical facilities to treat coronavirus victims. The very last line — almost like an afterthought — states, “Non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations or other social events) are canceled or postponed at this time.” There is no further elaboration.

What “gatherings” are deemed essential? The examples provided are all social and imply larger numbers. Can a Board meet to deal with building policy or operational issues? [We think so.]

How many people constitutes a “gathering?” Does the Board have the right to use this Executive Order to bar all visitors to the building for social purposes, or does this simply supplement a Board’s potential reliance on the “business judgment” rule to limit visitors in order to protect the health and safety of building residents? [More on that in an upcoming Client Alert.]

FEDERAL UPDATES

On Friday the government passed the CARES Act, which grants relief to a huge number of individuals and businesses. All small businesses – including cooperative corporations, condominiums, homeowners associations, property managers, building owners and contractors – should pay particular attention to the Payroll Protection Program, which grants loans and potential loan forgiveness to businesses who have incurred economic hardship due to COVID-19. We will be providing more specific information in a future Client Alert.

The CARES Act also allows multifamily building owners who have loans insured by a federal agency (like HUD), or that are purchased or securitized by FNMA (Fannie Mae) or the Federal Home Loan Mortgage Corporation, to seek forbearance on their mortgages for up to 90 days. Individual co-op and condo unit owners whose mortgages are purchased or securitized by FNMA (Fannie Mae) or the Federal Home Loan Mortgage Corporation may also be able to obtain forbearance for up to 180 days.