I was contacted earlier today by a manager whose association had installed a "wifi" system in the community’s clubhouse that would allow residents and their guests to bring their laptops and other mobile devices into the clubhouse and connect to the internet.   A password would be needed to use the wifi system but this password would be given to any resident or guest that requested it.

The manager forwarded me a very recent blog entry from my colleague, Lisa Magill, from the Becker Poliakoff law firm, that raised the issue of whether a community association could be  liable if the wifi connection offered to its residents and guests was used to illegally download content.   Lisa’s entry contained links to several articles, including a report on litigation being filed against thousands of persons for allegedly downloading pornographic movies illegally.

Regular readers of this blog may recall my discussions of how ROCs could potentially violate copyright laws by playing music or showing movies at community events and it appears that associations that offer wifi or other internet services to residents and guests may be entering the same dangerous waters.

While the safest course of action would be for an association to remove the internet service (or not install it in the first place), perhaps there are some steps that ROCs can take to bring the risk of potential liability down to a level that might be acceptable to an association’s board of directors:

• The board of directors can pass a rule requiring that any residents and guests using the community’s internet service do not commit any illegal activities
• The board can also require that no resident or guest be given the password or otherwise be allowed to use the internet service unless and until he or she signs a document agreeing that he or she shall not use the system for any illegal purposes, including downloading any material illegally, and that any such illegal usage shall result in that resident or guest immediately and permanently forfeiting his or her privileges to use the internet service.   This agreement should also contain specific language stating that the resident or guest will indemnify the association for any and all costs, expenses, and damages that the association incurs or suffers as a result of that resident or guest using the service for any illegal purposes.  
• The board should determine whether the resident or guest is required to click on an "I Agree" box prior to accessing the internet on his or her laptop.  If so, the board can have the requirements and agreements set forth in above two paragraphs included on that "sign in" page and the resident or guest will not be allowed to access the internet unless and until he or she clicks on that box.   I would still suggest having each resident and guest sign a "hard copy" of that agreement for the association’s records and the association should maintain that document in a safe place.

Finally, each association should have a discussion with its insurer to determine whether the association’s current policy would protect it in the event of a claim arising from the illegal use of its internet service by a resident or guest. 

We’ll do our best to keep you advised of any further developments in this area.