Alcohol and Community Associations: BYOB?

Recently, we’ve been asked our opinion on allowing alcohol in community association common areas–whether through an association sponsored event, casual homeowner get together, or other spontaneous gathering. As you may imagine, this issue raises the hair on the back of the neck of any community association attorney, risk manager or insurance agent.

On one hand an association board wants to be reasonable and promote fun, social events throughout its community. On the other hand, a board must act prudently to ensure the association does not step into unwarranted liability.

There is a wide range regarding this topic—from a complete ban on alcohol in common areas (most conservative), to zero limitations or guidelines regarding serving or consuming alcohol (most liberal). Perhaps the best course is somewhere in between.

Community associations should consider adopting alcohol policies to help limit their liability. Such policies may require:

• An indemnity / hold harmless agreement when renting or utilizing common areas;

• Compliance with all applicable laws, including obtaining a proper liquor license and absolute prohibition on underage drinking;

• Hiring a licensed, bonded and insured caterer with proper licenses (if applicable for the event);

• Alternative transportation (e.g., taxis) made available to guests;

• Person or persons who will not be drinking to be in attendance at all times to be responsible for compliance with pre-approved protocols; and

• Ensure proper insurance and named insured is in place.

The foregoing merely highlights some subjects for a condominium or homeowner association’s alcohol policy. Please contact the team at Barker Martin if you would like assistance formulating a tailored alcohol policy for your association. Until then, bottoms up (safely)!

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