Coronavirus immunity for residential real estate developments in New Jersey

Residential real estate developments that reopen their amenities amid improving public health would benefit from COVID-19 immunity under legislation that is making its way through the New Jersey legislature.

New Jersey has lifted most restrictions related to COVID-19 as the number of COVID-19 cases in the state declines and more people are receiving vaccines. State lawmakers previously approved immunity from COVID-19 prosecution for medical facilities and healthcare workers, but legislation to protect companies from such liability has started to gain traction.

In mid-June, a New Jersey assembly committee introduced a bill that would protect community associations and similar entities from lawsuits related to the spread of COVID-19, except in cases of “crime, actual fraud , actual malice, gross negligence, recklessness, or willful misconduct. The action of the Committee on Community Development and Assembly Affairs clearly shows the approval of a series of amendments to an almost identical bill that the state Senate had passed.

In early June, the state Senate unanimously approved a bill under which “any illness, injury, death or other damage resulting from or related to exposure or transmission of COVID-19 on the premises of a real project, real estate development cannot give rise to any cause of action. The Senate version provided that immunity would not apply to “acts or omissions constituting a crime, actual fraud, actual malice, gross negligence, recklessness or willful misconduct.”

By unanimously approving the changes to the Senate bill, members of the Assembly committee responded to industry advocates who pressed for the legislation to address concerns that the reopening of clubs, playgrounds and swimming pools could lead to an increase in COVID-19 damage claims. Industry watchers note that insurance coverage is generally not available for such claims and that the resulting litigation would likely bankrupt many New Jersey community associations, most of which are companies to non-profit run by residents on a voluntary basis.

Committee members indicated that for immunity to apply, warning signs would be required at the entrance to common areas. In addition, the immunity could not affect the compensation claims of potential workers.

The legislation is pending. As amended by the New Jersey Assembly committee, the provisions of the bill would expire on January 1, 2022.

Jackson Lewis PC © 2021Revue nationale de droit, volume XI, number 176


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