Association Insights Seasonal

So, COVID Happened…Now What?

Now, we keep calm and carry on as generations of humans since recorded history have carried on, through plagues, pestilence, and pandemics, with conceivably less resources to contain them than those with which we are currently equipped.  The idea is to be reformative and enterprising and prepare for future jolting events that could similarly inject disruptions in our industry.

At the risk of sounding flippant and/or insouciant, the post-pandemic world of the second decade of the 21st Century would arguably be no more chaotic or consequential than the post-pandemic era which gave Sparta dominion over Athens, however short-lived, in the aftermath of the Peloponnesian Wars!

Scholars have posited that had Athenian solders not been weakened by what was later suspected to be typhoid fever (purportedly the earliest recorded pandemic in history, 430 B.C.; it passed through three African nations and crossed over the Athenian walls), Sparta would never have defeated Athens, and democracy would have remained the preferred form of government in nations throughout Europe, Asia, and what we today know to be the Middle East.  Imagine the world we would have inherited.

Citizens of nation states would have had the option to determine the outcome of their future through purely democratic means. Tyranny of the upper class would never have seen the light of day in kingdoms and fiefdoms that dominated and persecuted huge sections of their population for the betterment of the formers’ descendants.  The words King, Queen, Princes, Princess, Duke, Duchess, Viscount, Emperor, Tzar, etcetera’s would probably have been absent in the lexicon of most languages if we consider the fact that these three regions (Europe, the Middle East, and Asia) impacted the history of mankind in incomparably immutable ways, since.

Throughout history, plagues and pandemics have inextricably been linked with altering the course of human civilization. This time with COVID-19, no different.

There is a common thread that binds pandemics … they’ve got CONSEQUENCES.

They are consequential to economies, to the social fabric of nation states, the body politic, and geographical regions. The manifestation of the aftermath of pandemics are divergent and reflect the era.  However, they are alike in demonstrating the resiliency of humans to stay focused on researching, ascertaining, and ultimately defeating whatever ails. That is how we have survived as a species, and that is why we shall this too.

Granted, upon realization that the novel corona virus was an epidemic of enormous proportions, the whole world went into a chaotic tailspin. Primarily because 60 days elapsed before the general world public understood the deadliness of the disease. But also, because there was the recognition that most governments were ill prepared to quickly decipher and/or manage the spread, much less how to effectively communicate the gravity of the disease or the potency and manner of the human-to-human transmission.

The scramble by the World Health Organization to inject a coherent warning message of the pernicious nature of the corona virus dithered on the virus’ origins and whether it was an epidemic or a pandemic.  The uncertainty from the scientific establishment of what was to later become obvious, helped little, as Italy and Spain quickly became an apparent uncontrollable epicenter of contagion in Europe.

Consequently, intercontinental, and national air travel got suspended. Governments, the world over, shuttered their borders, leaving several families separated. Refugees discovered that survival no longer meant fleeing to safer territories.  They were now left to confront an even more dire and more deadly enemy, invisible and fatal, with no viable escape or relief from well-meaning benefactors.

Chief operating officers clambered to device new standard operating procedures for virtual work schedules as staff got caught behind shuttered borders and shelter-in-place orders. Employers and employees were left in limbo lamenting how to implement Occupational Safety and Health Administration labor safety regulations, whilst determining which personnel could or could not be designated “essential.”

Preventative, common sense protocol of mask-wearing became no longer a public health and safety discussion in our nation.  All these, happening within the first two and the half months of 2020.  By mid-March 2020, panic had palpably concretized. It was no longer the lone case or two in the State of Washington.

COVID-19 had come to America and case numbers of infected persons skyrocketed in the densely populated and frequently visited cities of the east and west coasts; and so, did the death toll.  Then everything closed as Americans made a run for the grocery stores, preparing for uncertainty made worse by the contradictory messages from the scientific community and our elected officials.

Loved ones got sick, and sicker still; and many, way too many, sadly passed away. Pandemics have consequences.

The reverberations of this disease rumbled the foundation of businesses, affecting most every sector of the economy in varied and unpredictable ways.

The community association industry, a microcosm of the nation writ large, was not immune to the operational, economic, and social consequences.  The longevity of its repercussions will truly be determined when the novel corona virus becomes less fatal or eradicated.  Notwithstanding, the unequaled rapidity of the vaccine development has aided in relieving the anxiety numerous associations experienced.   Solutions to remedy any future stress should parallel the trailblazing benefits of the vaccine development by employing innovative and progressive methods to lessen the impact of any future disruptions.

Some of the contemplated solutions are already being implemented with positive results, accelerated by two major factors: i.) temporary jurisdictional edicts by local officials to curb the contagion in their specific localities; and ii.) concern by boards, management companies and business partners to protect staff from contracting the virus at work.

Staff, deemed non-essential by local officials, were permitted the flexibility of teleworking.  Changes to jurisdictional statutes legitimized virtual meetings and electronic voting in associations; inevitably rendering board, committee, and membership meetings effortlessly accessible to a larger segment of unit owners in community associations. They also made it less challenging for management staff to attend meetings given the flexibility of remote participation. The antecedent notion of “management by presence” in the community association industry has all but disappeared. If nothing else, COVID has demonstrated that with appropriate technological equipment and planning, community managers and admin staff can adequately and effectively perform their duties from any location. Management companies and some business partners could reduce overhead costs by downsizing office space given the effectiveness of telework. Associations also benefit. An unscientific poll of managers in the DC, Maryland and Virginia Metro Area suggests increased productivity by virtue of remote work because staff have fewer interruptions; are less stressed; have limited travel to occasional commutes; and have created work schedules geared towards completing tasks, rather than “showing up.” Nevertheless, financial, and operational challenges persist in our industry.

Affected associations struggle with loss of income from escalating owner delinquencies due to shutdowns in the greater American economy. In-unit services suspended because residents refuse to allow entry, understandably terrified to contract the disease. Boards are hesitant to obligate staff to enter units to perform non-emergency repair requests, because they are equally terrified employees might get infected. Mask-wearing, booties and gloves are mandated for contractors entering buildings and units and will probably inure post-pandemic as standard practice. This has placed undue financial burden on contractor budgets which, naturally, will be included as pass-throughs on contract, further negatively impacting the coffers of financially struggling associations.  Pandemics have consequences.

Management companies, managers, and industry partners ought to device an alternative method for communities experiencing such revenue deficiencies if it can be established that they result from owner source of income loss. Especially for those communities with fewer than a hundred units.

In some of these communities the owner revenue source loss could account for a quarter or third of the total membership, pushing them to the brink of insolvency.

The contemplation here is that, if an association’s revenue plummets because a sizeable majority of its members have been terminated and/or furloughed, it is not unexpected that essential maintenance could, and in many cases, may be deferred.  If there is a modicum of certainty that the revenue base will return post-pandemic and upon general societal normalcy, contractors, management companies and boards could agree on effectuating the crucial repairs for a gradation payment plan or contractor financing.

Decidedly, this recommendation envisages the existence of a trusted and inveterate contractual relationship hinged on the trustworthiness of the stakeholders.  It is by no means recommending that Peter be robbed to pay Paul, since several contractors are also facing financial difficulties from reduced contracts. It is rather guaranteeing payment at a future date on a continuing profitable relationship.

Management companies could consider early disbursements on monthly contract invoices rather than the typical 30-day turn around to keep struggling vendors afloat in anticipation of the expected economic recovery.

The community association insurance sector has contributed to publishing safety procedures to limit association liability under current policy endorsements only as it relates to workers compensation.  A more vigorous contribution would be endorsements for pandemic coverage post-pandemic, akin to terrorism coverage after 9-11. This could be in the form of loss of revenue inclusions for Associations equal to loss of revenue coverages for rental property, under predefined and acceptable protocol.

CAI Legislative Action Committees could mount a lobbying effort to permanently codify regulatory relief implemented during COVID, such as online applications and issuance of permits. What about lobbying for tax relief for local businesses that retain employees during disasters?  Are these beneficial, workable solutions?

The community association industry adapted nimbly, implementing solutions to protect residents, practitioners, and partners, showing incredible agility to swiftly adjust to changing pandemic conditions. Implementing solutions that had been resisted for decades.  Post-pandemic, the industry should employ meaningful, albeit unorthodox, smart procedures for continued readiness. COVID demonstrated that the industry is capable of rapid, bold, and revolutionary solutions. This thought process should continue in heralding different, better, more progressive ways to function in our industry. Admittedly, it would be company, association, business partner specific. The thread that binds, as in all pandemics, is that consequential bold, pioneering solutions will catapult our industry into the future and beyond.

By Ekoke J. Tambe, AMS, PCAM

Ekoke commenced her career in the community association industry in May of 1991, managing condos and converting tenant associations into Coops in the District of Columbia. Her involvement with the Washington Metro Chapter of CAI is long and storied having served as Chair of the then PR Media Committee, under whose chairmanship was birth WMCCAI’s partnership with the Ronald McDonald House.  A recipient of the Rising Star Award, Ekoke has served in various Committees, educational panels, and volunteered at functions, all to promote professionalism and best practices standards of the community association industry.  Her continued involvement and dedication to our industry is demonstrated by current service on three WMCCAI Committees, and one sub-Committee.  A rabid Penn State fan, she is employed as the General Manager of a 302-unit luxury condo in Southwest DC.

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