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.
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.