The Decision to Serve Alcohol Will Never Be Dry: Things to Consider Before Serving Alcohol at Your Next Community Event
By: Chad Rinard, Esq.
With spring upon us, community gatherings are popular events for associations to introduce neighbors to each other, conduct annual meetings, or pass that amendment to governing documents that requires the presence of members who may be otherwise difficult to assemble. As a neighbor and homeowner myself, the answer on whether to serve alcohol at a social gathering is a resounding: “Yes, please.” As a lawyer, however, it is much easier to object: “Perhaps not.” On one hand, there is no doubt that the safest course for an association is simply to resist the service of alcohol. No alcohol, no liability. On the other hand, the appeal of serving a cold beer or a glass of wine can be a well-deserved complement when there is a desire to bring neighbors together or build community spirit. The option to serve alcohol, coupled with a willingness to do so, does not need to be dismissed entirely however, and can be navigated to mitigate the risk of liability for those associations that find the consumption of alcohol, in moderation, a desirable complement to their gatherings.
The consideration of whether to serve alcohol at a community event encompasses numerous issues which tend to fall within three categories: the risk of liability to the association for damage caused by those that consume alcohol; the strict prohibition against service to a minor; and any licensure necessary to serve alcohol, which is highly dependent upon the details of the event.
The first category, potential association liability for damage caused by those that consumed alcohol, is perhaps the scariest. The jurisdiction where your association is located is important for this issue. For example, Virginia and Maryland are part of a dwindling minority of states that are “non-dram shop states.” Neither state has a statute that places liability on a party that serves alcohol to individuals who, because of their alcohol consumption, causes injury to another, another's property, or themselves. Conversely, Delaware and D.C. prohibit the sale or delivery of alcohol to an intoxicated person, or any person who appears to be intoxicated. Depending on where your association is located, there may or may not be a similar standard in which an association is potentially liable for the intoxication of one of its members, which makes the risk of continuing to serve anyone who appears to be having the time of his or her life entirely unappealing, and to be watched closely.
That is not to say that alcohol, consumed in moderation, cannot be a positive addition to a gathering. If an association decides to serve alcohol, it has discretion to limit the places where the alcohol is served and consumed. Consumption in and near the community pool is highly discouraged. Consumption contained in community clubhouses, to grassy common areas and within walking distance to owners' homes is more ideal.
Next, Virginia, D.C., Delaware, and Maryland prohibit the sale of alcohol to minors. This prohibition is not surprising, but service of alcohol to exclude the consumption by minors at events to which they are welcomed may be more challenging than it seems. Virginia, D.C., Delaware, and Maryland prohibit the knowing service or consumption of alcohol by minors. Therefore, it is paramount for an association to ensure at any event at which there are minors and alcohol that minors are prohibited from the consumption of alcohol regardless of whom provided it to them. It is best to have anyone at an event with alcohol to be carded before consumption is allowed, and given wrist bands for identification. Bartenders may also be hired to limit service to those who may be permissibly served. Finally, well in advance of any event at which alcohol is served or expected to be consumed, an association is urged to contact its insurance carrier to understand whether there is coverage for any incident that occurs at an event at which alcohol is served. It is a common exclusion to insurance policies to preclude coverage for incidents that happen at community events at which alcohol is sold. Association are encouraged to become knowledgeable of the risk of liability and potential lack of coverage that the service or consumption of alcohol may present.
Lastly, associations should be aware that a license may be required to serve or sell alcohol at a community event. In Virginia, no license is required as long as an association adheres to the following: (1) the alcoholic beverages must not be charged for in any way; (2) consumption of alcoholic beverages is limited to common areas regularly utilized for private parties; and (3) the meeting or party is not open to the public. Even if the above is satisfied, there are exceptions, such as when beverages will be sold or a fee is paid to attend the event, then a license is required to be obtained by the association. Before an event at which alcohol is to be served, it is best for a Virginia association to contact the Alcohol Beverage Control Board to determine whether a license is required.
In D.C., a license may not be required for an event that is closed to the public and where alcohol is provided gratuitously for on-premises consumption on that premises. Notwithstanding the foregoing, if the operator of the premises provides entertainment, food, or nonalcoholic beverages or rents out the facility for compensation, a license is required. A D.C. association therefore should confirm with the Alcoholic Beverage Regulation Administration whether an event license is required at an event which will include alcohol.
In Delaware, a group gathering license is required to serve or sell alcohol at a community event. The form for application to the Delaware Office of Alcoholic Beverage Control is available online at the State of Delaware's website. The form notes that all applicable Delaware Code provisions governing the service and sale of alcohol apply, in that, the persons in charge must still be mindful of not selling alcohol to individuals who “appear” intoxicated or are minors. The group gathering license also has an associated fee, which is explained in the form and in the applicable Delaware Code provisions.Maryland tends to delegate rules about the sale and service of alcoholic beverages to local government. Accordingly, any association located in Maryland should contact its local city or county government to determine any licensing requirements prior to hosting an event where alcohol will be served.
The decision on whether to serve alcohol at a community event will never be easy. Associations and their managers should know any requirements for licensure, or exemptions to coverage under the association's insurance policy for incidents that arise from serving or the consumption of alcohol. Service of alcohol should be restricted so that the consumption of alcohol by a minor is completely prohibited, and service to any adult who appears intoxicated is deterred. It is appropriate to stop service to avoid overconsumption and limit the risk of injury to guests and others. Legal counsel is highly encouraged and recommended to assess the various details of your association's event and ensure the necessary approvals and restrictions are in place both before and during the event. In the meantime, “Cheers!”