Seasonal

To Drink or Not to Drink

With the holiday season upon us, communi­ty event planning will soon be in full swing, and many boards of directors will face the issue of whether to permit or serve alcoholic beverages at com­munity-hosted events. Holiday parties are popular events as they can help strengthen community ties and provide an excellent opportunity for neighbors to meet one an­other. When it comes to alcoholic beverag­es, there is no doubt that the safest course for an association is to abstain from serving them. The more directly the association is involved in serving alcoholic beverages, the greater the potential liability exposure. Sim­ply put—no alcohol, no liability. But where is the fun in that?

Despite (or in spite of) these words of cau­tion, it is inevitable that some community associations will ignore the advice of counsel and will proceed with hosting boozy com­munity events.

It is important that boards understand the risks involved whenever an association serves or permits the consumption of alcoholic beverages on the common areas and to understand precautions that can be taken to ensure a successful event while limiting risk to the association and its members.

Liability and Insurance
Virginia and Maryland are non-dram shop states, meaning there is no statute that plac­es liability on a person or entity that serves alcoholic beverages to an individual who, because of his or her alcohol consumption, causes injury to a third-party or to proper­ty. Likewise, D.C. does not have a dram shop statute either; however, the D.C. courts im­pose a heightened standard of care on en­tities engaged in serving alcohol to others. D.C. Code Section 25-781, prohibits the sale or delivery of alcoholic beverages to persons less than 21 years of age and to any intoxi­cated person or person who appears to be intoxicated.

If a community association is sued, it may ultimately avoid liability, but it may still have to endure potentially costly litigation. The association can avoid over-serving attendees by implementing responsible controls de­signed to limit consumption, such as impos­ing a two-drink limit and limiting the type of alcoholic beverages served to beer and wine. Additionally, the hiring of professional bar­tenders for community events can help an association manage various aspects of alco­holic beverage service.

In addition to limiting consumption, boards should contact the association’s insurance provider to understand whether there is cov­erage for incidents that may occur at events hosted by the association or that take place on the common areas where alcohol is con­sumed. The association may be able to ob­tain additional coverage on the association’s commercial general liability policy for in­juries or damage caused by an intoxicated person who consumed alcohol at the com­munity’s event. If professional bartenders are hired, the association should make sure it is named as an additional insured for the event in addition to having its own coverage in place.

Licensure Requirements
Next, boards should be aware that an event license may be required by their jurisdic­tion’s respective alcoholic beverage control board for a community event at which alco­hol will be served or consumed. Licensure requirements vary depending on the type of event and type of alcoholic beverages being served at the event.

The Virginia Alcoholic Beverage Control Board (“ABC”) is responsible for adminis­tering the state’s ABC laws. Virginia associa­tions are encouraged to contact the ABC to inquire about licensure requirements before each planned event. Please note that Virgin­ia Code Section 4.1-200(10) provides that no license will be required for private parties limited in attendance to the members of a common interest com­munity and their guests provided the following requirements are met: (i) the alcoholic beverages are not being sold, (ii) the event is held on private proper­ty, such as the common areas regular­ly utilized for private parties, and (iii) such party is not open to the public. Under the Virginia Code, Section 4.1-209, associations must obtain a license from the ABC for community-spon­sored events where alcohol will be sold to attendees.

In Maryland, the sale and service of al­coholic beverages is regulated by local government. Accordingly, Maryland associations are encouraged to contact their local city or county government to determine whether a license is required prior to hosting an event where alcohol will be served by the association or con­sumed on the common areas.
In D.C., the appropriate authority to contact prior to serving alcohol is the Alcoholic Beverage Regulation Ad­ministration (“ABRA”) to determine whether an event license is required. Similar to the law in Virginia, a license may not be required for events hosted by D.C. associations where: (i) alco­holic beverages are not being sold, (2) consumption occurs on private prop­erty, and (4) the event is not open to the public.

Prohibition on Underage Drinking
Virginia, Maryland, and D.C. prohibit the sale of alcohol to minors and the knowing service of alcohol to minors. All three jurisdictions also prohibit the consumption of alcoholic beverages by minors, which can prove challeng­ing to manage at events where minors are welcome to attend. It is imperative for associations to ensure that minors do not consume alcohol at communi­ty-sponsored events regardless of who may have provided it to them.
One way associations can guard against the occurrence of underage drinking is to schedule events at times when minor children are less likely to attend, such as at night. Please note that the association should not, how­ever, limit attendance at communi­ty-sponsored events to residents who are age 21 and older because such events could be construed to violate fair housing laws. Another way to pre­vent the service of alcohol to minors is to card all attendees and issue wrist­bands for identification.

The safest course for all community as­sociations is not to allow the consump­tion of alcoholic beverages at any event hosted by the association or at any event that takes place on the common areas. By planning responsibly, com­plying with all state and local laws, and ensuring the right insurance coverage is in place, an association’s potential li­ability will be limited for injury or damage that occurs as the result of the consumption of alcohol at an associ­ation event.

By Susan L. Truskey, ESQ.
Susie is an attorney at Whiteford, Taylor & Preston, LLP. Her practice is devot­ed to the representation of condominium and community association clients throughout Virginia and the District of Columbia. She has been named a “Ris­ing Star” by the Washington Metropolitan Chapter Community Associations Institute and currently co-chairs the Chapter’s Quorum Editorial Committee.

 

 

 

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