By Bill Wichert

Law360 (June 16, 2021, 3:52 PM EDT) -- A New Jersey Assembly committee on Wednesday advanced legislation that would prohibit lawsuits over the spread of COVID-19 at real estate developments, providing immunity that supporters said would ease the fears of community associations that they could be dragged into court after reopening their amenities.

Nearly two weeks after the state Senate unanimously passed a nearly identical bill, the Assembly Community Development and Affairs Committee approved a version that would shield associations and similar entities from such litigation, except in cases involving "a crime, actual fraud, actual malice, gross negligence, recklessness, or willful misconduct."

One of the committee members, Assemblywoman Annette Chaparro, D-Hudson, indicated during its Zoom hearing that such protection was needed for condo associations that are fearful of opening their amenities.

"It's very important that we pass this, especially for the summer days that are coming," Chaparro said. "A lot of them have pools and areas for their residents to enjoy."

Assemblywoman Serena DiMaso, R-Monmouth, echoed the need for the legislation. Referring to residents, DiMaso added, "They're paying homeowners association fees for items they can't use."

The legislative moves come as Gov. Phil Murphy has largely lifted coronavirus-related restrictions amid improving public health conditions. The outbreak has led to more than 23,000 deaths and devastated businesses in the state, but the number of COVID-19 cases has declined as more New Jerseyans have gotten vaccinated.

Throughout the pandemic, state lawmakers have considered different types of immunity from COVID-19 suits, with varying degrees of movement. While immunity for medical facilities and health care workers has been approved, bills aimed at shielding businesses from such liability have stalled.

But the immunity proposal for real estate developments has picked up speed in recent weeks.

According to the version that cleared the Senate on June 3 in a 36-0 vote, "any illness, injury, death, or other damages arising from, or related to, an exposure to, or transmission of, COVID-19 on the premises of a planned real estate development shall not give rise to any cause of action."

That version states that the immunity "shall not apply to acts or omissions constituting a crime, actual fraud, actual malice, gross negligence, recklessness, or willful misconduct."

During Wednesday's hearing, committee members unanimously approved a series of amendments to the legislation, including that the immunity is available as long as certain warning signs are placed at entrances to communal spaces and that immunity would not impact potential workers' compensation claims, according to remarks during the hearing.

The provisions of the bill also would expire as of Jan. 1 under the proposed amendments, according to the remarks.

Attorney George C. Greatrex Jr. of Hill Wallack LLP, speaking on behalf of the Community Associations Institute, told the committee that community associations across the state are mostly nonprofit corporations run by their residents on a volunteer basis.

Over the past 15 months, their main concern has been "the fear of opening their cherished amenities — whether it's pools, clubhouses, playgrounds, bocce courts, you name it — and the fear of uninsured claims for COVID damages," Greatrex said.

"The problem simply is that there is no insurance coverage for these types of claims," Greatrex said. "No matter how hard they try to be safe in their opening, they know they're risking lawsuits that could literally bankrupt them."

The legislation "will in fact provide that protection to them and the comfort that they know that they can open their amenities without fear of being sued for those uninsured claims," he added.

--Editing by Kelly Duncan.

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