On February 1, NMHC joined nearly 600 business groups from across the country in once again calling on Congress to include targeted and temporary COVID liability protections for businesses in the relief package that is currently being negotiated with President Biden. The letter spearheaded by the U.S. Chamber of Commerce and sent to both the House and Senate makes the case that without these common-sense protections, our nation’s economic recovery from the pandemic would be greatly harmed.
NMHC also joined the U.S. Chamber this week in calling upon the Securities and Exchange Commission (SEC) to adopt rules to prevent speculative COVID-related securities litigation. This protection would extend to public multifamily firms.
Like many businesses, apartment operators, despite doing their best to follow applicable guidelines in operations, face the potential of needing to defend against an onslaught of frivolous lawsuits related to operations during the COVID-19 pandemic. These claims will drive up operating costs at a time of great financial stress in the multifamily industry. The prospect of such litigation and associated, exorbitant legal costs, are a deterrent to resuming normal operations and could have devastating consequences for those entities that have already been negatively impacted by the pandemic.
Nationwide, over 1,400 COVID liability and securities class action claims were filed throughout 2020 and expectations are that these lawsuits and claims will grow dramatically. NMHC believes that Congress and the SEC should enact protections to prevent the worsening of the economic damage caused by the pandemic. Policymakers should take a two-pronged legislative and regulatory approach to providing protections. On the legislative front, Congress should quickly enact temporary and targeted liability relief legislation related to the COVID-19 pandemic for businesses that work to follow applicable public health guidelines. For public multifamily firms, the SEC should adopt rules to prevent speculative COVID-related securities litigation, which are often of dubious merit and simply try to leverage the expense of litigation, the monetary exposure, and the reputational harms to companies in order to extract a quick settlement.
NMHC and our allied business groups acknowledge the important role businesses of all kinds have in ensuring the safety of the American public and are advocating that the liability protections should be limited in scope and preserve recourse for those harmed by truly bad actors who engage in egregious misconduct.
While a legislative path forward remains tied to larger COVID relief issues, we are fortunate that bipartisan support emerged for some liability protections late last year and Senate Minority Leader Mitch McConnell (R-KY) remains committed to ensuring that these protections are enacted. Action at the SEC on the U.S. Chambers’ petition and our coalition’s support for regulatory protection remains unclear at this time. However, NMHC will continue to urge Congress and the SEC to act swiftly to address these important protections for the multifamily industry.
For more information on NMHC’s latest COVID-related advocacy efforts, please visit the NMHC COVID hub.
Staff Resource
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