Q&A: Determining Guidelines to Limit Liability

Q Our condo building has a lot attached with parking for six cars. On the far side  of the lot there is a garden and a playground. We have a member who has requested to use the garden, playground and parking lot for a  party. Cars will be coming in and out during the party, so while I don't want  to be unreasonable, I feel it's dangerous to have people in the same area. Are  there any guidelines about this issue that might help our association come to  an agreement?  

 —Legally Liable  

A “Although there are no specific guidelines, the bylaws might contain information  under use of common property that may be helpful,” says Edward Mackoul, CIC, president of the New York-based insurance firm Mackoul & Associates, Inc. “Since the property is not intended for this use, if it has to be done, the board  should block off the parking area and not allow any cars to enter. Combine  people unfamiliar with the property, cars being driven in a small area and  possible alcohol consumption, and you have a recipe for disaster. The parking  area can be segregated with cones, tape, signage or rope.  

 “In addition, there should be written guidelines between the condominium and unit  owner specifying the hours of the party, the number of guests attending,  whether alcohol is being served, etc. Because insurance carriers providing homeowners insurance for condominium unit  owners generally will not add the condominium as an additional insured onto the  homeowners policy, the unit owner hosting the party should be required to take  out a special events insurance policy for that night. This special events  insurance policy can be endorsed to include the condominium as an additional  insured and a certificate of insurance reflecting the condominium's additional  insured status should be provided to the board well before the party is allowed  to begin. Lastly, the unit owner should sign a waiver of indemnification  releasing the condominium and holding them harmless for any injuries or  liabilities resulting from the party.  

 “The board must be prepared that if they allow this one unit owner to use these  areas for a party, that they are setting a precedent for the future, as others  will want to use it as well.”  

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