Use Community Room Agreement to Make Residents Responsible for Damage and Injury

A site’s community room is an ideal place for residents to throw parties or hold resident association meetings. But use of this amenity can cause problems. If residents or their guests act irresponsibly, they may damage the community room and its furnishings. And if someone’s injured while using the community room, your site could be held liable.

To avoid these problems, make residents who use the community room sign an agreement that sets certain rules they must follow and makes them responsible for damage to the room and injury to guests. This type of agreement won’t guarantee an end to rowdy behavior. But emphasizing to residents in a formal agreement the fact that they and their guests must act responsibly will help reduce the chances that something will go wrong. And the agreement will help you get residents to pay for repairing any damage to the community room and help protect your site against liability for injuries. We’ll give you six key items your agreement should cover.

Information on Event

The agreement should identify the resident by name and unit number and state the date, time, and duration of the rental, the type of event, and the number of guests expected. This way, you’ll know ahead of time what to expect and can make sure that you don’t run into crowd problems or violate local fire laws. For example, you can’t permit the resident to invite more guests than the community room’s legal occupancy limit allows.

Resident’s Responsibilities

The agreement should spell out exactly what the resident’s responsibilities are. Your agreement should:

Set out responsibilities for damages. Specify that the resident agrees to be responsible for the cost of repairs and replacement if the community room or its contents are damaged. To be clear about exactly what items the resident is responsible for, attach an inventory of the community room’s equipment, furniture, fixtures, and other appliances, and refer to it in the agreement. Be sure to indicate the condition of each item on the list. Then, to prevent disputes over the existence of damage, encourage the resident to note any preexisting damage you failed to spot. When the event ends, the resident will be able to check that each item on the list is in good shape.

Set conditions for use. Make clear that the resident will use the community room only for the purpose he or she has specified. And make sure the resident agrees to be present at the function and be responsible for the conduct of the guests. It’s important that the person who signs the agreement and is familiar with the rules supervise the event and keep an eye on guests.

Set rules for behavior. Use the agreement to set other rules, such as keeping noise and disturbances to a minimum, complying with applicable smoking regulations, and not allowing minors to drink alcoholic beverages. And make the resident responsible for seeing that guests follow these rules.

Require guest list. Get the resident’s promise to give you a guest list before the date of the event. This will keep you informed of who is at the site, in case of problems, and help you ensure that you don’t exceed the occupancy limit set by the fire department. Make sure that the guest list includes all party planners, entertainers, and caterers.

For some events, particularly resident association meetings, requiring a guest list isn’t always practical. Resident organizers don’t necessarily know who plans to attend resident association meetings. So don’t require guest lists for these groups. But you still should ask for an estimated attendance number to get an idea of the size of the crowd.

Details on Fees and Deposits

The HUD Handbook spells out the types of charges assisted owners and managers can require from residents without getting HUD approval first. For instance, you may charge residents for any damage to common areas, but the HUD lease gives residents up to 30 days to pay these charges. You can also charge fees for “special management services” The handbook mentions lockout calls and extra keys as examples of these services [HUD Handbook 4350.3, par. 6-25(D)(1)]. But the handbook requires HUD approval for all other fees. Therefore, you should run any fees and deposits you intend to charge by your local HUD office before you start charging residents for use of the community room. In addition, be sure to charge all residents the same fees and deposits to avoid fair housing and other HUD compliance problems. If you don’t, you could be subject to penalties or suspension from HUD program participation.

With regard to resident organizations, according to HUD’s Management Agent Handbook, sites subject to budget-based rent reviews cannot charge resident organizations a fee for the use of a community room. However, for all other assisted sites, owners and managers may charge the same fees to any resident association that wants to use the community room only if a fee is normally charged for the use of the community room [HUD Handbook 4381.5, par. 4.6(b)(3)(b)].

Conditions for Return of Deposit

Tell residents exactly what they must do to get their deposit back. Our agreement sets a number of conditions that must be met before management will return a deposit, including:

• The community room and the items listed on the inventory list must not be damaged;
• The resident must have cleaned the community room and returned it to its original condition immediately after the event; and
• The resident must have returned the community room key to the management office by noon of the day after the event.

Reimbursement for Damages and Repairs

Tell residents that you’ll deduct the cost of damages and repairs from the deposit. And make residents pay for any extra damage. To make sure you get the right to restore the community room to its original condition, specify that you’ll deduct the cost to repair or replace damaged items, regardless of what they originally cost. Unless you specify that residents are responsible for the replacement cost, residents might refuse to pay more than you originally paid for the damaged property, leaving you on the hook for the difference.

Indemnification Clause

If someone gets hurt during a party in the community room or one of the guests damages other residents’ property by breaking into cars in the parking lot, it’s likely the injured person or aggrieved neighbor will sue the site and not the resident or guest who caused the injury or damage. Therefore, you need to do what you can to protect your site from liability for this damage or injury.

To do this, your agreement should require the resident to indemnify the site’s owner and managing agent and their principals and agents against any claims of damage or injury that result from the use of the community room. Indemnification means that the resident agrees to defend the site against any lawsuits and pay the cost of damage and injury if the site is sued.

Some states such as Massachusetts and New York won’t enforce an indemnification clause in an agreement if that clause forces a resident to indemnify an owner for the owner’s negligence. This means, for example, that you can’t avoid liability and hold the resident responsible if someone trips over a broken floor tile or gets hurt when a chair owned by the site collapses. These are defects that are the owner’s responsibility.

Our clause limits the resident’s liability to injury or damage arising out of the resident’s negligence or the negligence of any of the resident’s “agents, employees, visitors, guests, invitees, and contractors.” Ask your attorney whether this indemnification clause is enforceable in your state.