Two Important Bills Impacting Indiana Community Associations
On February 18, 2021, Indiana Governor Holcomb signed into law two separate bills that are very beneficial to Indiana homeowners associations and condominiums. They take effect immediately. One pertains to COVID-19 immunity, and the other eliminates an onerous requirement for documents like liens and covenants that are filed with a county recorder.
Senate Enrolled Act No. 1 provides immunity from liability for COVID-19 related claims that might otherwise be brought against a wide variety of organizations. As used in the statute, the term “person” includes “associations” and “nonprofit corporations”. Thus, homeowners associations and condominium associations are clearly covered. The statute states in part that an association or nonprofit corporation:
“is immune from civil tort liability for damages arising from COVID-19: (1) on the premises owned or operated by the person; (2) on any premises on which the person or an employee or agent of the person provided property or services to another person; or (3) during an activity managed, organized, or sponsored by the person.”
The three categories listed cover a wide variety of property management functions as well as services that many community associations routinely provide for the benefit of their members. This is indeed good news because the bill will make it much harder for an owner, resident or guest to bring a lawsuit against an association claiming the he or she contracted COVID-19 because of something the association did or failed to do.
However, Senate Enrolled Act No. 1 does not grant blanket immunity. The law does not grant immunity to an association or nonprofit corporation “whose actions or omissions constitute gross negligence or willful or wanton misconduct (including fraud and intentionally tortious acts) as proved by clear and convincing evidence.” Under these standards, it would be very difficult for someone to claim successfully that a homeowners association or community association somehow caused an owner, resident or guest to contract COVID-19 as a result of attending an association function or using the association’s amenities or other portions of common area that is owned or managed by the association.
House Enrolled Act No. 1056 reverses an unintentional mistake when a law went into effect on July 1, 2020. Because of one word that was changed in an existing statute, the legal effect for Indiana community associations was that for any document filed with a county recorder, it had to be signed not only by an officer of the association, but also by a “disinterested witness”. Both parties had to sign the document in front of a Notary Public at the same time. This made it very difficult for the execution and recording of liens against the property owned by delinquent owners as well as documents like amendments to covenants. With the passage of House Enrolled Act No. 1056, Indiana now goes back to the traditional method of signing such documents. This will alleviate the inconvenience of arranging for a “disinterested witness”.
Other bills that would impact Indiana community associations are working their way through the legislative process, but the two bills described above are the first to be enacted.
