As a Community Association attorney, I’ve been on both sides of the fence as it relates to association litigation. Whether I am initiating litigation against others on behalf of the association or defending the association for claims brought by others, the following holds true: litigation is expensive, time-consuming and emotionally draining for those involved. The purpose of this Blog post is to educate community leaders on how to implement best practices in order to avoid litigation.
Association as a Plaintiff
Collections
Let’s face it: unit owner delinquencies are a problem for most associations. Sometimes avoiding litigation in collections is not possible due to chronically non-paying unit owners. But much of the time, litigation can be avoided if the association stays proactive in its efforts to collect overdue assessments.
To begin, every association should implement, and utilize, a practical collections policy that protects the interests of the association while, at the same time, seeks to resolve the arrears without the necessity of litigation. A multi-tiered policy is often the best way to try and collect the arrears while resorting to litigation as a last step. For example, after the account is deemed delinquent (as “delinquent” is defined in the collections policy), a warning/demand for payment letter is sent to the delinquent unit owner by the association, requesting payment within ten days. Should the owner not pay within the allotted time period, a final warning/demand letter is sent to the delinquent unit owner by the association, requesting payment within five days. Should the unit owner again fail to pay, the matter is to be turned over to the association attorney for collection. Depending on what the collections policy provides, the attorney can either send an attorney demand letter (in compliance with the Fair Debt Collection Practices Act) or immediately initiate suit against the delinquent unit owner in order to collect the delinquent account.
Utilizing this type of collections policy thus allows the association to have a “two (or perhaps three) strikes and you’re out” approach when it comes to collections in an attempt to avoid litigation until it becomes absolutely necessary.
Transition and Declarant Issues
The majority of lawsuits filed by an association against a declarant are filed after many months, or even years, of communication and negotiation between the parties. However, the earlier the parties can begin to communicate and attempt to resolve the disputed issues, the better.
For instance, associations often wait until the formal transition process begins to bring up any outstanding issues related to the common elements. While the declarant certainly needs to address valid issues at transition, there is no reason why the association has to wait until the actual transition to request that the declarant correct a deficiency with the common elements. Rather, the association should open the line of communication early in the process to put the declarant on notice of the issue. Sometimes, if it is logistically/economically feasible, a declarant may handle the issues as they occur in order to keep the relationship between the parties “positive” and to avoid having to handle everything all at once at transition (however, depending on the particular declarant, this may not be possible).
Also, with respect to the formal transition, rather than digging in, puffing out their chests and litigating every issue, the parties are encouraged to respectively discuss and negotiate their positions and enter into a “Transition Settlement Agreement” in order to finalize the remaining issues and send each party on its way.
The moral of the story is that while litigation between an association and a declarant is sometimes unavoidable, if the parties effectively communicate early on in the process, agreements may be reached and litigation may actually be avoided.
Contract Disputes
In the association world, most contractual disputes involve a contractor/vendor that the association believes didn’t live up to its end of the bargain. While breach by the other party is sometimes inevitable despite the terms of the contract, an association can seek to avoid litigation if it can craft/revise/amend the contract in such a manner that fosters the ability of the association and the contractor/vendor to resolve the issue and/or terminate the contract with an agreed-upon recourse (i.e., liquidated damages).
It is recommended that the association have its professional property manager review and assist in negotiating contracts on behalf of the association. Managers generally have many years of experience under their belts when it comes to contracts, and they are a tremendous resource for associations.
When it comes to larger (as far as cost), and more technically complicated, contracts, it is advisable to have the association attorney review the contract to ensure that the association is best protected. Many times, onerous and one-sided (and sometimes unenforceable) clauses are present in the contract and these provisions should be removed from the outset. Other times, there are issues pertaining to breach, notice and damages that the attorney must strengthen and/or bolster for the benefit of the association.
At the end of the day, an association can best seek to avoid litigation by being proactively involved in the drafting process prior to execution of the contract. Otherwise, it might be “too late” and litigation may become the only option available to the association.
Enforcement (injunctive relief)
Similar to collections matters, sometimes avoiding litigation in an enforcement matter is not possible due to perpetually non-compliant unit owners and/or due to the nature of the violation at issue. However, litigation can be avoided if the association stays proactive in its efforts to enforce its covenants.
To start, associations should enact reasonable rules and regulations in compliance with their governing documents and enforce same equally and uniformly against all unit owners. Care should be taken to ensure that the proper notice, hearing and appeal requirements are incorporated into the rules and regulations. Doing so not only ensures compliance with the law (i.e., procedural due process), it also provides a mechanism for the association to try and work with the unit owner(s) to voluntarily remedy the violation prior to engaging in litigation in order to force unit owner compliance.
Finally, associations should make every effort to communicate with the non-compliant unit owner(s) throughout the process in an attempt to resolve the violation. Only after every reasonable opportunity has been exhausted, should an association engage in litigation to seek injunctive relief to cure the violation (the author notes that when the alleged violation involves actual or potential damage to property and/or results/may result in physical harm or bodily injury to a person, the association should expedite seeking a remedy and obtain emergency injunctive relief if required).
Association as a Defendant
Personal Injury – Premises Liability
Associations must manage risk appropriately in order to avoid litigation in premises liability matters. Proactive risk management measures include, but are not limited to:
Asking the association general liability insurer to perform a risk management assessment in order to provide recommendations to the association on suggested risk minimization techniques;
Ensuring that various contractors fulfill their duties in a manner that minimizes risk (i.e., snow plow contractors, security guards, lifeguards, landscapers).
Making sure that the association is properly maintaining common elements to eliminate common risks (i.e., broken/uneven sidewalks, potholes, trees and tree limbs);
Having the property manager perform routine inspections of the property;
Enforcing rules and regulations as required in order to avoid risk caused by unit owner violations.
By being proactive about risk minimization, associations will reduce the number of claims that are brought, and in turn, the likelihood of litigation.
Director and Officer (D&O) Liability Actions – Breach of Fiduciary Duty
Litigation brought by unit owners for an alleged breach of fiduciary duty by the association board of directors is a growing phenomenon. In order to avoid these claims, the board should act in good faith, treat all unit owners equally and perform its duties reasonably and with sound business judgment.
While such allegations will invariably be brought by at least one unit owner in every association, the more documentation an association has to substantiate its actions, the better suited it will be when a claim is made. Accordingly, it is imperative that the association keeps minutes of all board decisions, correspondence to/from unit owners, copies of all contracts and accounting statements and audits, among other things.
Finally, the author notes that associations should obtain adequate director and officer liability insurance coverage in order to best protect the board and the association.
Enforcement Issues
Unit owners frequently bring claims against the association for “selective” or “unequal” enforcement, meaning that the association board is allegedly picking and choosing how it wishes to pursue enforcement of the association covenants and/or is selectively deciding which unit owners they will seek to enforce the covenants against (in other words, the association is allegedly using its enumerated powers to “punish” some owners, and let others “slide”).
Associations can avoid litigation for selective enforcement by always acting: (1) in good faith; (2) reasonably; and (3) with sound business judgment. By following the enforcement procedures set forth in the governing documents (including proper notice, hearing and appeal requirements) and enforcing the covenants equally and uniformly against all unit owners, the risk of such claims is reduced.
Finally, it is noted that claims brought for selective enforcement often concurrently involve fiduciary duty claims (discussed above) and/or fair housing/discrimination claims (discussed below).
Defamation
A suit for defamation can arise in an association when a unit owner (or even a board member) alleges that the association defamed (whether through slander or libel, or both) the owner by communicating about the owner in a manner that has harmed the owner. In the author’s home state of Pennsylvania, and in many other states, when bringing an action for defamation, an owner must prove:
The defamatory character of the communication;
Its “publication” by the association;
Its application to the owner;
The understanding of the recipient of its defamatory meaning;
The understanding of the recipient of it as intended to be applied to the owner;
The special harm resulting to the owner from its publication; and
At times, that abuse of a conditionally privileged occasion had occurred.
While many suits for defamation brought by unit owners are baseless in the law, the association still must defend the suit, which is time-consuming and potentially expensive. Associations should therefore seek to act reasonably and avoid making potentially defamatory communications about the owner. Some frequent issues that have brought about defamation complaints are as follows:
Publishing the name of a unit owner whose account is in arrears to all owners either in a newsletter or by posting on a community bulletin board (whether electronic or physical);
Publishing the name of a unit owner whose account is in arrears on an association website, allowing the “world” to view it; and
Publicly discussing a unit owner’s alleged covenant violation at an open board meeting prior to issuing a final determination on the issue.
Finally, if the association has any doubts on how to handle an issue that may lead to a potential defamation claim, it is encouraged that the association contact its counsel for an opinion on the issue.
Contract Disputes
Contractors and vendors with whom an association contracts often bring claims against the association for breach of contract. More often than not, the association believes that the vendor or contractor has not “performed” pursuant to the contract terms (and/or has overcharged) and has therefore breached the contract. The association then withholds payment, which causes the vendor or contractor to sue the association for breach.
The key to avoiding these suits is for the association to act reasonably in how it approaches a contract dispute, including how it handles the above-referenced situation. Rather than simply withholding payment for an alleged breach by the vendor or contractor, which will likely cause the situation to escalate into litigation, the association should seek to communicate with the vendor or contractor in an effort to amicably resolve the dispute. Frequently, these disputes can be negotiated and resolved in a manner that’s beneficial to both parties when compared with the cost, energy and time involved to litigate a breach of contract dispute.
Fair Housing Claims
Title VIII of the Civil Rights Act of 1968 (“Fair Housing Act” or “FHA”), 42 U.S.C. §§3601 – 3631, and its 1974 amendment, made it illegal to threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right, or to advertise or make any statement that indicates a limitation or preference based on a protected class, which includes race, color, national origin, religion or sex (gender).The Fair Housing Amendments Act of 1988 (FHAA) added two more protected classes to the FHA: (1) familial status; and (2) individuals with disabilities. The FHA applies to community associations because the FHA prohibits discrimination, by the association, related to any services and/or facilities the association provides related to the residential housing in the association. 42 U.S.C. §3604(b).
The US Department of Housing and Urban Development (“HUD”) has interpreted the FHA to include two types of discrimination: Disparate Treatment and Disparate Impact (also known as “Discriminatory Effect”). Disparate Treatment involves discrimination due to different treatment, i.e., treating someone differently because of race, color, sex, religion, national origin, familial status or disability. Disparate Impact involves discrimination by different impact, i.e., when a neutral policy or procedure has a disproportionately negative impact on a protected class.
Fair housing claims have been increasing steadily against community associations across the country. The most common fair housing complaints in associations are as follows:
Failure to provide a “reasonable accommodation” for a disability – examples include requests for animals (service and emotional support/companion animals) and parking issues;
Failure to provide a “reasonable modification” for a disability;
Familial status violations.
In order to avoid fair housing claims and litigation, associations should be educated on the law, act reasonably when making determinations and, when handling an accommodation/modification request, review same and issue a fair and reasonable determination in a timely manner.
Finally, the author notes that fair housing issues are discussed in greater detail in the author’s Common Ground magazine article entitled “All’s Fair”, in the July/August 2014 issue.
Alternatives to Litigation (ADR)
Finally, sometimes the only way an association can actually avoid litigation is to agree to submit the dispute to alternative dispute resolution (ADR). This can be binding or non-binding in nature, based on the agreement of the parties. Popular forms of ADR include Mediation (generally heard by a sole Mediator and is more of a “summary” proceeding where the parties and the attorneys submit information to the Mediator (ahead of time and/or at the Mediation) without the need for evidence/actual testimony to be introduced/taken at the Mediation) or Arbitration (frequently heard by a panel of Arbitrators and can include testimony and evidence at the proceeding).
By Edward Hoffman, Jr., Esq., CCAL
An abbreviated version of this Blog post was published in Ed Hoffman’s article in the July/August 2015 issue of Common Ground magazine.
Perhaps you remember the chorus in Dave Mason’s 1977 soft rock hit, “We Just Disagree”:
So let’s leave it alone ‘cause we can’t see eye to eye. There ain’t no good guy, there ain’t no bad guy, There’s only you and me and we just disagree. Ooh-ooh-ooh, oh-oh, oh-oh-oh.
I know, you, the reader, isn’t happy with me as you won’t be able to get the song out of your head (I think it’s actually a pretty good song, by the way) … but, there’s a message here. The message is that residents in community associations won’t always see eye to eye on every issue … and, that’s ok because we simply aren’t wired to agree on every issue. However, sometimes a simple disagreement rises to the level of conflict in an association, which can impact the entire community. As a community association attorney and litigator, I believe the path to reducing conflict in associations begins with proactively and intentionally acting in a manner which will serve to avoid the disagreements, issues and other frustrations that ultimately lead to conflict. This article will outline some best practices that community associations should follow to reduce the likelihood of conflict.
Consistency and Uniformity in Enforcement
In every community association, the Board is charged with the responsibility to enforce the community’s covenants, restrictions and rules & regulations for the benefit of every member/owner in the community. This responsibility is not voluntary; rather, the Board has a fiduciary duty to (1) ensure that the covenants, restrictions and rules & regulations of the community are adhered to/followed by the members/owners; and (2) enforce the covenants, restrictions and rules & regulations against a unit owner who fails to adhere/follow them. Examples of frequently encountered enforcement issues include but are not limited to pools, trash, outdoor elements (architectural control), parking, pets/animals, curtains, outdoor storage, maintenance and playgrounds. Enforcing the governing documents with consistency and uniformity – regardless of the unit owner that is the subject of the enforcement – will greatly reduce the possibility of conflict in the association as well as potential liability for the association. How does an association do this?
Actually enforcing the covenants, restrictions and rules & regulations.
Though it is seemingly ridiculous to have to mention this, every association must actually enforce its own covenants, restrictions and rules and regulations. A failure to do so will lead to cries of inconsistent enforcement by unit owners, which will invariably lead to conflict.
Not playing favorites.
A Board MUST enforce its covenants, restrictions and rules and regulations against Ms. Jones in Unit B1 and Mr. Smith in Unit B2, even if Ms. Jones is the community pariah and Mr. Smith is the kindest person in the entire community. In other words, a Board must not play favorites. Picking and choosing some but not all unit owners as it relates to enforcement will certainly lead to conflict.
Avoiding stupid decisions.
Let’s not sugarcoat it. Community leaders make stupid decisions. Sometimes these stupid decisions lead to inconsistent enforcement of the community’s covenants, restrictions and rules & regulations. The key is either avoiding stupid decisions to begin with, or if that horse has already left the gate, recognizing and reversing course on the stupid decision before it becomes a problem for the association and leads to conflict. Stupid decisions can be avoided by adopting and implementing an enforcement policy which will be applied uniformly and equally to all owners.
Ensuring due process is provided to unit owners before fining.
In the author’s home state of Pennsylvania and many other jurisdictions, the statutes provide an association with the power to levy reasonable fines for violations of the declaration, bylaws and rules and regulations of the association – after notice and an opportunity to be heard is provided to the unit owner. Fining a unit owner and/or engaging in a related enforcement action prior to and/or without providing a unit owner with notice and an opportunity to be heard may lead to a successful lack of due process defense by the allegedly offending/violating owner, and will surely lead to conflict.
Stopping unofficial enforcement.
Unofficial enforcement involves situations where a Board member, committee member or some other person with actual or apparent authority to act on behalf of the association tells a unit owner to do something as it relates to the covenants, restrictions and rules & regulations, but without the consent (vote) of the [entire] Board of Directors. For example, a landscaping committee member unilaterally advises a unit owner to remove a tree because the committee member believes the tree is in violation of the covenants. This is unofficial enforcement because the committee member may be viewed to have authority to tell the unit owner to remove the tree although the committee member, in actuality, had no authority to do so. If a unit owner actually removed the tree as a result of the directive of the committee member, and the tree did not have to come down, conflict would likely be the result. Boards must therefore be cognizant of the propensity for this type of activity to occur and must properly educate and train all community leaders and volunteers to stop unofficial enforcement from occurring. Doing so will serve to reduce conflict in associations.
Good Governance
What does “good governance” in a community association mean, and how can it serve to avoid conflict? Good governance means that the Board makes good decisions for the benefit of the community and that it undertakes this process correctly. To clarify this issue a bit, in Pennsylvania, and similarly in many other jurisdictions, the Business Judgment Rule provides that Board members must make decisions (1) within the scope of their given authority; (2) in good faith; (3) using ordinary care; and (4) in the best interest of the Association (i.e., not in the best interest of the Board Members). The simple process of making decisions correctly will likely serve to reduce conflict, as unit owners will likely be less upset with Board decisions on certain issues and will be less apt to contest Board actions and initiate litigation.
Communication Between Association and Residents – Make Owners Feel Heard
An issue that has always caused strife and conflict between community associations and unit owners involves unit owners feeling and complaining that the Board doesn’t listen to unit owners – in other words, the Board doesn’t allow unit owners to feel heard on association issues, whether big or small. In my practice, I have actively advised and recommended to my clients that the Board should make considerable effort to listen to unit owners on issues – and, sometimes, unit owners bring great perspective and are “right” on the issues they want to be heard on.
In jurisdictions that do not require “open” Board meetings, such as Pennsylvania (absent requirements in the governing documents, of course), my recommendation would be to make some of the Board meetings open to the unit owners to attend. For example, if there is a Board meeting every month, I would suggest that the Board offer to make 25% of the meetings, or three Board meetings a year, open to the unit owners to attend (even if virtual, assuming it is permitted). This would go a long way to having the Board and unit owners actually get to know one another, and will likely lead to reduction in potential conflict between unit owners and the association.
Take Neighbor Against Neighbor Disputes Seriously
We have discussed conflict between the association and unit owners, but what about conflict between unit owners? “Neighbor against neighbor” disputes have been around since people have actually been neighbors to one another and such disputes frequently occur between unit owners in community associations. An association may choose to act as an intermediary between unit owners in order to facilitate harmony, avoid conflict and perhaps reach a potential resolution – and this action may in fact, actually be deemed necessary under HUD’s 2016 Final Rule entitled “Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act”.
To boil it down to its essence as it relates to Hostile Environment Harassment, the Final Rule explains that “the reasonable person standard under which hostile environment harassment is assessed”is“‘[w]hether unwelcome conduct is sufficiently severe or pervasive as to create a hostile environment is evaluated from the perspective of a reasonable person in the aggrieved person’s position.’” In the association world, this means that a run of the mill neighbor against neighbor dispute may also trigger alleged violations of the Fair Housing Act so long as a member of a protected class (i.e., race, color, national origin, religion or sex (gender), familial status and individuals with disabilities) is making the claims against his or her neighbor.
Why is this a problem for associations if it is one unit owner accusing another unit owner of such conduct? An association’s Achilles heel as it relates to this issue is the fact that the Final Rule was revised to clarify that a housing provider (including a community association) is liable under the Fair Housing Act for third-party conduct (including but not limited to the conduct of a unit owner) if the housing provider knew or should have known of the discriminatory conduct, has the power to correct it, and failed to do so. The Final Rule provides that a community association would be liable for negligence for failing to take prompt action to correct and end a discriminatory housing practice by a third-party of which it knows or should have known was occurring.
With respect to dealing with third parties, HUD explains that a community association generally has the power to respond to third-party harassment by imposing conditions authorized by the association’s CC&Rs or by other legal authority. HUD further explains that community associations regularly require residents to comply with CC&Rs and community rules through such mechanisms as notices of violations, threats of fines, and fines. HUD submits that it “understands” that community associations may not always have the ability to deny a unit owner access to his or her dwelling and that the Final Rule “merely requires the community association to take whatever actions it legally can take to end the harassing conduct”. Thus, if a unit owner allegedly harasses another unit owner who is a member of a protected class under the Fair Housing Act, and the unit owner who is the subject of the alleged harassment advises the association of same, the association appears to have a duty to investigate the issue and affirmatively get involved in some manner to try and stop harassing conduct. If the association fails to do so, it may face liability for violating the Fair Housing Act in accord with the Hostile Environment Harassment provisions of the Final Rule, under the third-party liability rule.
Accordingly, if such allegations are made, the association may have a legal obligation to take swift action to enforce its covenants if applicable, or at least offer to get involved and assist in resolving the issue in order to reduce conflict between the unit owners for their benefit and for that of the association.
Govern With Empathy
Real people face real struggles in life. People were, and are, on edge, and many are ready to jump out of their skin. In an association setting, health, employment and other personal struggles impact unit owners’ jobs, which impact their ability to pay assessments. Personal struggles also impact owners’ ability to maintain their properties in accord with the covenants due to financial issues. When speaking to my clients about these issues, I advised that they should govern with empathy and utilize emotional intelligence, in addition to good faith and due diligence, in making decisions during this time period. I often repeated the mantra, “don’t leave empathy at the door when making important decisions”, and many associations took that advice to heart.
I believe that COVID really changed our outlook on what the concept of “community” really is – I also believe that we took “community” for granted. I know I see it, and I believe that you do as well. Community begins at home, and we had a lot of time at home to closely examine this concept in our own lives. We were, and still are, in all of this together. We must realize that we don’t live on an island onto ourselves and we should prioritize creating a safe and peaceful “community” where we treat others as we want to be treated and where we love our neighbors as we love ourselves.
Finally, if Boards govern with some level of empathy during this time period, it will serve to not only avoid conflict now, it’ll set the tone for when we get through this difficult time – and we will likely see a renewed concept of “community” in our associations.
– Edward Hoffman, Jr., Esq., CCAL
* The content for this Blog post is based in part on the prior written work of the author as originally published in the May/June 2021 issue of CAI’s Common Ground Magazine in an article entitled “Peace of the Puzzle”: https://lsc-pagepro.mydigitalpublication.com/publication/?i=702268&ver=html5&p=21
When a board member or community manager hears the phrase “nuisance”, many thoughts come to mind regarding what this means, and how it may impact their association, but, more often than not, most do not know what a nuisance really is and what the association may need to do to deal with a nuisance. The purpose of this post is to properly educate community leaders on nuisance principles and to discuss real-word application to community associations.
What is a Nuisance?
nuisance– noun nui·sance \ˈnü-sən(t)s, ˈnyü-\
Merriam-Webster defines a “nuisance” as “a person, thing, or situation that is annoying or that causes trouble or problems.” (http://www.merriamwebster.com/dictionary/nuisance). Utilizing this definition, basically any person, thing or situation seems as if it could qualify as a nuisance. However, the legal standard for determining if a nuisance exists is not subjective in nature, it is objective and is based on a “reasonable” or “normal” person standard. Thus, if a “reasonable” or “normal” person in the same community (area) would view the activity as offensive, then it could be significant enough to be considered a nuisance.
Public vs. Private Nuisance
A nuisance can be a public nuisance or a private nuisance. A public nuisance generally involves a substantial portion of the population and threatens public health safety or welfare (a current example would be the situation of lead in the water in Flint, Michigan). Public nuisances can lead to criminal charges being filed.
In Pennsylvania, and in many other jurisdictions, a private nuisance is defined as a “nontrespassory invasion of another’s interest in the private use and enjoyment of land.” Golen v. The Union Corporation, 718 A.2d 298 (Pa. Super. 1998); citing Restatement (Second) of Torts, § 821D. The invasion must cause significant harm, which is harm of importance involving more than slight inconvenience. Harford Penn‑Cann Service, Inc. v. Zymbolsky, 549 A.2d 208 (Pa. Super. 1988). In other words, to succeed on a claim for a private nuisance, there must be a real and appreciable interference with the Plaintiff’s use or enjoyment of his land. Id.at 209. Thus, a private nuisance involves an appreciable interference with a person’s reasonable use and enjoyment of his (or her) property but does not include an actual, physical trespass.
In an association setting, “neighbor vs. neighbor” disputes frequently involve issues sounding in private nuisance. The resident or owner bringing a private nuisance claim may bring it up with the association and/or may attempt to seek relief from the court.
Frequent examples of private nuisance include noise, odor, light and dust (smoke is a more recent phenomena). It is noted that obstruction of a “view” does generally not give rise to a cognizable claim for nuisance in many jurisdictions. To wit, the Pennsylvania Supreme Court has held that a property owner cannot assert an actionable tort claim to preserve a view from his property. Cohen v. Perrino, 355 Pa. 455, 457, 50 A.2d 348, 349 (1947). In Cohen, one neighbor erected a brick wall entirely on his land some one and half inches from the other neighbor’s house, which fully obstructed that neighbor’s view from the first floor of his property. The plaintiff in the action contended that the structure was a nuisance that blocked his view and diminished the value of his property. The plaintiff sought removal of the structure. The court held that a property owner is entitled to build a wall entirely upon his own ground, or to build a party wall, that obstructs and closes the windows of an adjoining property owner. Cohenat 457, 349. A property owner enjoys the privilege of building, upon his own land, a structure which obstructs the light, air and view of an adjoining landowner. Maioriello v. Arlotta, 73 A.2d 374, 375 (Pa. 1950) and absent the grant of an express easement, adjoining landowners can erect structures that interfere with the other’s view and no cause of action can arise. Larsen v. Zoning Bd. of Adjustment, 543 Pa 415, 429, 672 A.2d 286, 293 (1996).
Nuisance in Governing Documents
Association governing documents typically contain some language in the restrictive covenants (Declaration) as it relates to nuisance, although it is generally not very specific. An example would be “[n]o noxious or offensive activities or noise shall be carried or allowed, in or upon the Common Elements or in any Unit nor shall anything be done therein either willfully or negligently which may be or become an annoyance or nuisance to the other residents in the community.” While provisions like this are vague, and are still subject to the legal standard(s) required to establish a nuisance, these provisions do provide the association with some guidance as it relates to the association’s responsibilities and requirements as it relates to a proposed nuisance in the community.
Enforcement of Nuisance Issues in Associations
Obviously, if a nuisance involves the Common Elements, an association has the authority to, and should, act to abate the nuisance. In doing so, the association should first look to its covenants in order to abate the nuisance. The association should follow the procedures set forth for enforcement as provided in the governing documents and shall provide the allegedly offending owner with reasonable due process and an opportunity to be heard in an attempt to abate the nuisance administratively prior to going to court for injunctive relief. As with all enforcement actions, the association should investigate the claim(s) and act within its enumerated powers in addressing the issue.
However, when the nuisance does not involve the common elements but instead involves a “neighbor against neighbor” dispute, what is the association’s obligation to get involved, if any? The answer is, it depends on the language in the governing documents and it depends on the nuisance that is being alleged. While owners often believe that the association has omnipresent power to enforce every issue in the association, often times, the association cannot, and should not, get involved. Private nuisance disputes may only be a “neighbor against neighbor” dispute and the association may actually have no legal standing to get involved. Of course, the association may still choose to act as an intermediary between the owners, in order to facilitate harmony and perhaps a potential resolution.
Examples of a Nuisance in an Association Setting
Smoking
Courts have held that smoke constitutes a nuisance under common law principles. See Thomsen v. Greve, 4 Neb. App. 742, 751, 550 N.W.2d 49, 55 (Neb. App. 1996) (“ . . . at least in our society, to have the use and enjoyment of one’s home interfered with by smoke, odor, and similar attacks upon one’s senses is a serious harm.”). In at least one state, Utah, the legislature enacted a statutory provision (Utah Code 78-6-1101(3)) which defines and treats tobacco smoke migration from one unit to another as a nuisance. The statute permits for a [private] right of action for a violation.
Smoke has become an increasingly prevalent private nuisance issue in many communities, seemingly due to a decreasing number of smokers. These complaints can be “neighbor against neighbor” and/or can involve the common elements and the association. Should an association even get involved when it is neighbor against neighbor in a smoking dispute?
Based on a case from Orange County California, the answer appears to be yes. In Chauncey v. Bella Palermo Homeowners’ Association, et al., 3/28/2011, Cal. Super, Case. No. 30-2011-00461681-CU-OR-CJC, a jury found an association negligent for failing to resolve a secondhand smoke dispute between neighbors in a condominium. The plaintiffs alleged that the tenant-neighbors and their visitors smoked “incessantly” on the patio adjacent to the plaintiffs’ condo as well as the adjoining sidewalks in front of their home, with the “constant infiltration and presence of secondhand smoke” entering their condominium through windows and a sliding-glass door which was a nuisance to the family. They alleged that despite their repeated complaints, the homeowners association, management company, tenants and the neighboring condominium’s owner/landlord did not stop the problem.
The Plaintiffs asked the jury to award them $120,000 and after a five-week trial, jurors awarded the family $15,500 in damages ($6,000 for economic damages and $9,500 for emotional distress (the jury found the HOA to be sixty percent responsible for the emotional distress damages, while the management company, the owner and the tenants were held liable to lesser degrees). The jury concluded that the association and the management company failed to ensure the non-smoking family’s right to the “quiet enjoyment” of their own unit. (Source: “Condo owners win secondhand smoke case”, Orange County Register, Marilyn Kalfus, March 12, 2013. http://www.ocregister.com/articles/smoke-499353-association-secondhand.html).
Interestingly, the Bella Palermo Homeowners’ Association governing documents provide, in part, at Section 9.03: “Nuisance. No noxious or offensive trade or activity shall be permitted upon any part of the covered property, nor shall anything be done thereon which shall in any way interfere with the quiet enjoyment of each of the owners of his respective residence.” Thus, while not specific as to the association’s responsibilities, a jury concluded that it was indeed the association’s responsibility to ensure the family’s “quiet enjoyment” of their unit.
Noise
Noise can be very subjective as it relates to whether or not it actually constitutes a nuisance, and it can literally come from every imaginable source, including… a baby. In 2015, some Connecticut condominium owners with a one-year-old son received the following note from their neighbor:
“Please consider buying a parenting book or consult with a child care expert . . . “[y]our baby should not be crying that loudly and for that long. Try more calming techniques, music, turn on a vacuum, rocking chair, go for a walk … anything!”
The note goes on to provide, “[i]f you don’t make changes immediately, you risk being fined by [the homeowners’] association.” The neighbor relied upon Section 4 of the Association’s Rules and Regulations that provides that excessively loud noise that interferes with the rights of neighbors is subject to possible fines.
However, does the Association have any authority to fine owners for a crying baby or to get involved? It turns out the HOA did get involved – a previous noise complaint by the same neighbor actually prodded the HOA to send the parents a warning which warned that they would be fined if the child continued to cry. (Source: http://www.realtor.com/news/trends/neighbor-files-noise-complaint-against-crying-baby)
My advice as an Association Attorney would have been for the Association to not send such a warning due to fair housing issues and other concerns. The fact that an owner lodged a complaint does not mean that the Association needed to get involved and send the parents a note about a crying baby. There are few other examples that would get an entire jury to dislike an Association such as this one.
Hot Topic: Medical Marijuana
While related to the smoking discussion above, due to the “smoke” emanating from the smoking of medical marijuana, this issue involves the legal use of marijuana for medical reasons, not simply recreational use. Accordingly, a unit owner who is prescribed medical marijuana could request a “reasonable accommodation” under the federal Fair Housing Act, 42 U.S.C. §§3601 – 3631, if the marijuana is prescribed to treat a disability. Also, some states have constitutional protections (Colorado) for marijuana use for debilitating conditions and others (Montana) statutorily permit its use for medical reasons. Therefore, associations need to be aware that the use of medical marijuana may be protected and a “nuisance” complaint related to same will need to be properly evaluated and handled with the advice of counsel.
While it is not clear if it involved medical marijuana, an example from New York City from a condominium located at 400 Central Park West involved a Board of Directors who sued residents under a nuisance theory for chronic (pun intended) marijuana smoking where the smoke and odor infiltrated the other areas of the condominium building. (Source: http://nypost.com/2016/03/31/stoner-tenant-is-smoking-out-central-park-west-condo-lawsuit/)
It is noted that Colorado also permits the use of “retail” marijuana that is not associated with medical necessity. Retail marijuana is intended for private, personal use, and such use is only legal in certain locations not open or accessible to the public. Accordingly, while the use of retail marijuana may be permitted in one’s “private” home, the protections associated with said use are not likely as strong as those associated with the use of medical marijuana in a private home and an association’s ability to deal with such an issue as a nuisance may not be as [legally] complicated.
In Summary
Associations need to be cognizant of nuisance issues and must be able to handle them correctly … assuming that they need to get involved. Before acting on a nuisance complaint, an association should elicit the cogent advice of counsel to ensure that any action by the association is both necessary and proper.
Edward Hoffman, Jr., Esq.
* The content for this Blog post is based upon the prior written work of the author as originally published in the September/October 2016 issue of CAI’s Common Ground magazine and in the November/December 2016 issue of the CAI PA-DelVal’s Chapter’s Community Assets magazine.
Inconsistent, or selective, enforcement of covenants, restrictions and rules & regulations by a Community Association is, unfortunately, a frequent occurrence. Community leaders must understand that inconsistent enforcement by an Association for even a minor issue can lead to major liability for an Association. This article will explore some of the issues surrounding inconsistent enforcement and will discuss ways to avoid potential liability for inconsistent enforcement.
Enforcement of Covenants, Restrictions and Rules & Regulations
In any type of common interest community, whether it is a planned community, cooperative or condominium, the Board (Board of Directors, Executive Board or Council) is charged with the responsibility to enforce the community’s covenants, restrictions and rules & regulations for the benefit of every member/owner in the community. This responsibility is not voluntary; rather, the Board has a duty to (1) ensure that the covenants, restrictions and rules & regulations of the community are adhered to/followed by the members/owners; and (2) enforce the covenants, restrictions and rules & regulations against a member/owner who fails to adhere/follow them. Examples of frequently encountered enforcement issues include but are not limited to pools, trash, outdoor elements (architectural control), parking, pets/animals, curtains, outdoor storage, maintenance and playgrounds.
How Does Inconsistent Enforcement Occur?
Inconsistent enforcement can occur in a number of different ways. Frequent causes of inconsistent enforcement will be discussed below, though the list is certainly not exhaustive.
1. Failing to enforce covenants, restrictions and rules & regulations.
When an Association fails to enforce its own covenants, restrictions and rules and regulations, this is, of course, inconsistent enforcement. Associations must follow the provisions set forth in the governing documents uniformly and consistently, all the time. When Boards fail to enforce an Association’s covenants, restrictions and rules and regulations properly, enforcement may become a feckless exercise. In other words, when a Board does not enforce its governing documents uniformly, all of the time, this can weaken and/or kill an enforcement action and prevent an Association from being able to enforce its own governing documents. This could wreak havoc for the governance of an Association.
2. Playing favorites.
A Board cannot choose to enforce its covenants, restrictions and rules and regulations against Mrs. Jones but not against Mr. Smith, even if Mrs. Jones is the community pariah and Mrs. Smith is the nicest, most charitable person in the community. In order to comply with its fiduciary duty to the Association and its members, a Board mustenforce the covenants, restrictions and rules and regulations equally and must not play favorites. Picking and choosing some but not all members as it relates to enforcement action(s) is a sure-fire path to a lawsuit being filed against an Association.
3. Stupid decisions.
Let’s not sugarcoat it. Community leaders make stupid decisions. Sometimes these stupid decisions lead to inconsistent enforcement of the community’s covenants, restrictions and rules & regulations. The key is recognizing, and reversing course, on a stupid decision before it becomes a problem for the association.
If the stupid decision was made in good faith (meaning, it may have been the wrong decision, but it wasn’t made for an improper purpose), then an Association will likely have a valid defense to a lawsuit alleging harm from inconsistent enforcement. Stupid decisions can be avoided by adopting and implementing an enforcement policy which will be applied uniformly and equally to all owners.
4. Lack of due process.
In the author’s home state of Pennsylvania, both the Pennsylvania Uniform Condominium Act (§ 3302(a)(11)) and the Pennsylvania Uniform Planned Community Act (§ 5302(a)(11)) provide an Association with the power to levy reasonable fines for violations of the declaration, bylaws and rules and regulations of the association – after notice and an opportunity to be heardis provided to the owner. Many other jurisdictions have similar requirements. Fining an owner and/or engaging in a related enforcement action prior to and/or without providing an owner with notice and an opportunity to be heard may lead to a successful lack of due process defense by the allegedly offending/violating owner.
It is further noted that many, if not the majority, of the governing documents reviewed by the author in his many years of Association representation have the due process provision reversed, meaning that the documents provide for the fine and/or violation notice to be sent first, and then allow an owner to appeal the fine or violation. This runs contrary to the intent of the Uniform Acts and the very concept of due process itself. Boards should carefully consider updating and amending governing documents to ensure that due process provisions are in accord with the law.
5. Unofficial enforcement.
Over the years, the author has unfortunately dealt with instances where “unofficial” enforcement occurs. Unofficial enforcement involves situations where a Board member, committee member or some other person with actual or apparent authority to act on behalf of the Association tells a member to do something as it relates to the covenants, restrictions and rules & regulations, but without the consent of the [entire] Board of Directors.
For example, an Architectural Review Committee (ARC) member unilaterally decides to verbally advise a unit owner to remove his deck because the ARC member believes the deck to be in violation of the covenants. This is unofficial enforcement because the ARC member may be viewed to have authority to tell the unit owner to remove his deck although the ARC member, in actuality, had no authority to do so. Such behavior actually leads to the opposite situation, i.e., no possible enforcement of the unauthorized, unofficial enforcement action. Boards must therefore be cognizant of the propensity for this type of activity to occur and must properly educate and train all community leaders and volunteers to avoid unofficial enforcement from occurring.
6. Drafting Rules and Regulations that are contradictory, or contrary, to the covenants and restrictions.
Rules and Regulations cannot go “beyond” the scope of the covenants and restrictions – meaning, a Board can’t adopt a rule or regulation that is more restrictive than the recorded covenants and restrictions. Moreover, even if they comply with these governing documents, Rules and Regulations must be “reasonable”, meaning, a court would need to view the Rule or Regulation as reasonably related to the purpose for which it was adopted.
Potential Liability for Inconsistent Enforcement
Inconsistent enforcement may result in a lawsuit being filed against the Association and/or its Board. An Association Board must therefore act properly, uniformly and consistently when enforcing the community’s covenants, restrictions and rules and regulations. But what standard is applied to determine if a Board acted properly, uniformly and consistently when enforcing a community’s covenants, restrictions and rules and regulations?
In Pennsylvania, and similarly in many other jurisdictions,the Business Judgment Ruleprovides that Board Members must make decisions (1) within the scope of their given authority; (2)ingood faith;(3) using ordinary care; and(4) in the best interest of the Association (i.e., not in the best interest of the Board Members). Therefore, under the Business Judgment Rule, in order to establish a cause of action for breach of fiduciary duty against an Association for an inconsistent enforcement action taken by its Board, the party complaining must allege facts which would establish that the actions of the Board were unauthorized, or that the actions had been taken fraudulently, in bad faith, or constituted self-dealing. Lyman v. Boonin, 635 A.2d 1029 (Pa. 1993).
Courts will typically not substitute their judgment for that of the directors of a corporation and will not interfere with the internal management of the corporation unless the acts complained of constitute fraud, bad faith or gross mismanagement, or are unlawful. Kelso Woods v. Swanson, 692 A.2d 1132 (Pa. Cmwlth. 1997), Mulrine v. Pocono Highland Community Association, 616 A.2d 188 (Pa. Cmwlth. 1992). Moreover, in the Pennsylvania case of McMahon v. Pleasant Valley West Association, 952 A.2d 731 (Pa. Cmwlth. 2008), the Commonwealth Court of Pennsylvania found that a homeowners association has a duty to “act reasonably in the exercise of its discretionary powers, including rulemaking, enforcement and design-control powers” and to “use ordinary care and prudence in managing the property… subject to its control.” Id. at 735.
Given the body of law that is evolving nationally as it relates to the standard to be applied to determine if a Board acted properly, uniformly and consistently as it relates to enforcing a community’s covenants, restrictions and rules and regulations, the author predicts the future trend will be for courts to combine the attributes of “reasonableness” and the Business Judgment Rule, meaning, a Board must act reasonably with respect to its “discretionary” powers, including the enforcement of covenants, restrictions and rules and regulations.
If a Board therefore acts reasonably in enforcing its covenants, restrictions and rules and regulations, it will greatly lessen the likelihood of inconsistent enforcement from occurring and potential liability for such action.
Finally, the author notes that every Association should obtain adequate Director and Officer (D&O) Liability Insurance to best protect and defend the Association and its Board (and committee) members from covered claims which may include inconsistent enforcement.
Inconsistent Enforcement is Avoidable
Community leaders rejoice! The good news is that inconsistent enforcement is entirely avoidable. Boards must proactively seek to reasonably enforce the community’s covenants, restrictions and rules & regulations uniformly and consistently. How can a Board do this? Best practices.
Best practices the Board should incorporate include:
Following the procedures set forth in the governing documents;
Ensuring due process is provided to owners;
Acting uniformly as to all owners;
Adopting/repealing/amending Rules as necessary to clarify;
Acting within the scope of the Board’s given authority;
Acting in good faith;
Using ordinary care;
Acting in the best interest of the Association;
Acting reasonably with respect to enforcement of rules and regulations; and
Contacting counsel beforeacting if there is a question.
Finally, the Board can pass a Resolution and, with the assistance of counsel, can adopt an enforcement policy that would be applied uniformly and consistently regardless of the owner or the issue that is involved (of course, such a policy can incorporate some flexibility for a Board to “reasonably” make exceptions to the policy for warranted circumstances). The enforcement policy must be followed so there is no dispute as to what must be done as it relates to enforcement. Owners must be provided with a copy of the policy.
In Summary
Association leaders need to be cognizant of the issue of inconsistent enforcement and must proactively and properly enforce the community’s covenants, restrictions and rules and regulations. Doing it correctly now will serve to avoid problems later and will greatly reduce, and perhaps eliminate, the potential for liability. Finally, if there are any questions, concerns or doubts about any type of enforcement issue, the Association should elicit the cogent advice of counsel before undertaking any type of enforcement action.
Edward Hoffman, Jr., Esq.
An abbreviated version of this article was originally published in the September/October 2017 issue of CAI’s Common Ground magazine.
As attorneys that practice Community Association Law and represent Community Associations and Condominium Associations all over Pennsylvania, we are frequently asked, “what would you look for if you were buying a home in a Community Association or Condominium Association?” The following is a brief overview of what buyers should be looking for when considering a home in an association.
Declaration of Covenants, Conditions & Restrictions (CC&Rs)
Prior to signing on the dotted line, examine the Declaration/CC&Rs for the community to make sure that you, as a potential community resident, can actually live with the limitations imposed on all owners in the community. For example, many association communities prohibit sheds, even for a single home on an acre of land. If you simply must have a shed, then buying a home in an association community that prohibits sheds is obviously not the best choice for you. By carefully reviewing the governing documents for the community and asking questions prior to the purchase, a buyer will be able to determine whether living in a particular community is actually the right choice for them.
Annual Budget
Prior to signing the agreement of sale, ask for and review a copy of the association’s budget. Look at the association’s outstanding debts and liabilities, as well as the percentage of owners that not current on assessments. If the majority of owners are behind, this may signal financial issues for the association. This may also have a negative impact on a buyer’s ability to obtain a loan to purchase a home in a condominium association because Fannie Mae, Freddie Mac and the Federal Housing Administration, which purchase and/or insure a majority of mortgages, place a cap on assessment delinquencies for condominiums.
Reserve Funds
Make sure that adequate reserve funds are set aside for maintenance of common areas in order to fund a large-scale project, like a swimming pool repair or a road repaving project (for private roads). If the reserve funds are insufficient, owners may be issued a special assessment to pay for the project. Buyers should therefore ask for a breakdown of the reserve funds as well as expected, upcoming capital expenditures.
Rental/Investment Properties
If a buyer wishes to live in the unit and not use it as a rental/investment property, the buyer should examine the percentage of units that are owner-occupied versus how many are leased. A high number of rental properties in the community could mean that a low level of owner involvement is present in the community. A high level of rentals in a community can also have a negative impact on a buyer’s ability to obtain a mortgage to purchase a home in a condominium association because Fannie Mae, Freddie Mac and the Federal Housing Administration set a minimum owner occupancy rate for condominiums.
Conversely, if a buyer is looking to use the unit as a rental/investment property, the buyer should see if there are rental restrictions present in the community and/or if the maximum threshold for rental/investment units has been reached in a condominium community prior to signing the agreement of sale.
Insurance
Ask for a copy of the “Policy Declarations” for the association’s insurance policy/policies to ensure that coverage is adequate and current. Coverage should include but not be limited to general liability coverage, director & officer liability coverage, environmental impairment coverage, employee dishonesty coverage and/or sinkhole coverage for the common elements.
Chances are, your community association has a virtual presence on the Internet. Whether your association runs its own website, has a site run by a management company or some other third-party vendor, or is active on a social media site, association leaders and Managers should take some steps in order to protect the community association from potential legal problems.
Step one: Have a plan.
All too often, communities go “online” without really having a plan. The end result is usually a disorganized free-flow of ideas and information that serves no real purpose aside from being able to say that the community is online. Instead of simply throwing content on a website, the community’s leaders should determine exactly why they want the community to be online. Determining why the community is going to be online will then automatically serve to determine what gets put online. For example, if the community’s main purpose in going online is to disseminate information relevant to the community to its member-owners, then the content that is posted should be specifically tailored to that audience. Posting content about topics unrelated to information about the community will only distract from the purpose of the association’s website and may lead to unexpected problems down the road.
Step two: Limit content.
From a liability perspective, the Achilles heel for most association websites is the failure to limit content. Content should be limited, by the association, to matters that benefit the community. A community should never allow unrestricted content to be posted to its website, whether it comes from members or non-members. In other words, the official association website is not the place to allow people to post their gripes about the association, its leadership, other owner-members, the municipality, the landscaper, the Manager or a host of other unsuspecting victims. The association website should therefore not contain an “open-posting” forum, bulletin board or other area where people can freely post anything they want to the website. Remember, this content gets posted to the association website, which means that the association can be held responsible for its content. If owner-members want the community to have an online “bulletin-board” to post garage sales, items for sale, recipes, a community calendar and other events, the community should encourage members to submit this information to the designated contact person for the community website, either by email, mail or in person. This person can then compile the information, edit if necessary, and post it to the website.
• Public v. Private Content
With respect to any content that is posted by the association to its website, the difference between public and private content must be examined very carefully by the association. In a nutshell, public content is content that the whole world can see, for example, the association name, the location of the community, amenities and photographs of common areas. Public content is generally included in an association website to show people why that community is, in fact, a great place to live. Some associations post association documents, like committee forms, budgets, meeting minutes and other items as public content. Generally, associations should post these items to a designated “owners-only” area that requires a username/login and a password for access. While people who do not live in the community might, for some odd reason, want to read the association’s budget or check out last month’s meeting minutes or a blank architectural review committee application, they are not entitled to have access to these documents. These types of documents are relevant to those who live in the community and access to them should therefore be limited to residents.
An association’s controlling documents might provide the association with the ability to post information on a community bulletin board, electronic or otherwise, including the names of owners that are more than 90 days delinquent on their assessments. This information should not be posted to the “public” portion of the website because of privacy concerns and fair credit issues. For instance, if Mrs. Jones in unit 2B is 120 days in arrears on her assessments, a quick Internet search of “Mrs. Jones, unit 2B, town of XYZ” might provide this information to a potential employer, creditor or other person that might wrongly or illegally hold it against Mrs. Jones. Sometimes sharing information becomes a problem not only for those whom are the subject of the information, but also for those who are innocently providing the information for some good-faith purpose. Remember, the general rule is that once information is out in cyberspace, it can’t be taken back or permanently deleted. Therefore, it is better to ensure that the content that is posted on the association website is really content that is safe for public consumption.
Dealing with private content is a bit trickier since there are two levels: (1) private content which all members of the community have access to; and (2) private content specific to each individual owner. All members might have access to association forms and documents. If an association wants to post its various community documents online for the benefit of its owner-members, the association can easily set up a designated area that requires a login and password to gain access to this downloadable information. The designated website administrator should be the only person able to upload documents to the website, so that the association can control which documents are posted.
Associations should also include the community’s online bulletin board, calendar and contact information for the Manager in the private members-only area rather than on the public portion of the website. While this is “private” content which only members of the community can view, associations should limit the content that goes in this area just as they limit the content that goes in the public area of the website. For example, while the association might be allowed to post the names of owners that are more than 90 days delinquent on their assessments, it doesn’t mean that the association should do it— even on the “private” portion of the website. Common sense should come into play and an evaluation of why the association is posting this information should be undertaken. Moreover, if it decided that this arrearage information will be posted to the private portion of the website, the association must uniformly apply this standard to all members of the community on a consistent basis, and not just a handful of people in a piecemeal fashion. Otherwise, the association might find themselves defending an “unequal enforcement” or defamation to reputation lawsuit brought by the owner that feels like they were singled out by the association.
The second level of private content, content that is specific to each individual owner, is an area that is ripe for potential legal problems if the information were to get into the wrong hands. This content includes, but is not limited to, banking and account information for electronic assessment payments by owners, the owner’s account history and other Personally Identifiable Information (PII) like Social Security numbers, vehicle license plate numbers, birthdays, private telephone numbers and an owner’s age. Therefore, if an association chooses to post this content on the Internet, it must do so with the understanding that this information is confidential in nature and every possible precaution must be undertaken to protect this information. Aside from the normal login & password requirements, the portion of the site should also utilize a secure connection (usually Transport Layer Security, or TLS, in the form of an “https” page over the Internet) to protect the information. Associations should use a qualified, professional management company to provide such a service or a third-party vendor that specializes in this area of information technology. Retaining a third party to handle managing and protecting the private content is a good idea, but this may not completely absolve an association from liability should there be a breach of information. However, every association should strive to be proactive when it comes to protecting private content. A failure to be proactive can lead to potentially devastating consequences for an affected owner and a strong likelihood that the association will face some sort of legal liability for the breach.
Step three: Monitor, monitor and monitor some more.
If an association decides that it wants to allow some level of interactivity or unrestricted posting on its website, then it is imperative that the association monitor what is being posted on the site. Monitoring the content that is posted to the site should be done on a consistent, timely basis by a designated moderator. The moderator should enforce the ground rules that must be listed on the site as it pertains to posting. Ideally, the association should have a policy for posting that the site visitor must agree to prior to being able to post any content to the website. Any violation of the policy can be grounds for removal of the post and a ban on all future posts on the association’s website. This type of content monitoring and moderation can also be performed on social media websites like Facebook, so long as the association sets up and runs the social media page on behalf of and in the name of the association. Never allow an owner or some other person to set up a social media page on behalf of or in the name of the association, because (a) others may think it is the official association page and (b) the association won’t be able to manage/restrict the content on the page. The future trend is for the association to create an acceptable use policy for members who want to post to an “open” association website as well as a social media policy identifying the association’s social media pages as the official page.
Finally, while implementing acceptable use and social media policies and monitoring posted site content is surely proactive behavior, these actions can’t completely relieve an association of potential liability for improper, damaging, false, inflammatory or defamatory content that is posted to the association’s website or social media page. The key is to never acquiesce, either by way of action or by a failure to act, to potentially harmful postings on the association site.
Step four: Be on the lookout for the association in cyberspace.
Cyberspace, like outer space, is a seemingly endless place. Just as exploration of outer space is possible, so is exploration of the Internet. However, rather than using spacecraft, all we must do to explore the Internet is log a few keystrokes. In other words, we can utilize the myriad of search tools available on the World Wide Web to pinpoint the exact information we need. Using sites like Google and Yahoo!, for example, we can search most of the information that is publicly available on the Internet for free and with very little effort.
Thus, my advice is to perform a search, every so often, on the association’s name. This is due to the prevalence of copycat websites which purport to be the official association site, as well as an increasing number of “anti-association” sites created by disgruntled owners, former owners, non-community member neighbors or others that have an axe to grind with the association. An association should act quickly to remove a website which purports to be the official site. This is no easy task, and it usually involves litigation against the copycat site operator.
Similarly, should an “anti-association” website be located which contains negative, inflammatory, defamatory, false, confidential or damaging information on the website, the association must take affirmative steps to try and have this website taken down or at least have the harmful information removed from the site.
On social media sites, associations may discover unofficial pages run by owners, former owners and others, related to the association. If run by current owners, the association should ask the owner to remove the non-official page and ask all owners to join, “like,” or follow the official page for the community.The situation is a bit more problematic when groups of owners maintain their own page. These members of the community may use the social media page, which is sometimes public in nature due to a lack of privacy restrictions set up by the page administrator, to vent about issues of concern to the community. Association leaders or Managers should try to monitor these pages, if at all possible, and do the best they can to have the social media users limit their comments about the community or other owners. Of course it’s not always possible find every page that is somehow related to the community, but if one is found efforts should be made to try and protect the interests of the community.
Finally, community leaders, Board Members and Managers should avoid connecting with association members on social media sites. By limiting their virtual relationships, they can avoid issues surrounding favoritism and ever-present fiduciary duty issues. If not “friending” others in the community is simply not possible, then the community leaders and Manager must refrain from posting comments about the community or community issues on any website that is not designated as an official community site. Similarly, even if the community leaders and Manager are not posting comments about the community or community issues on their own or their friends’ social media walls, they have an obligation to look out for the best interests of the association when reading comments that are made by others about the association.
Associations must be proactive in cyberspace, in order to preserve the “virtual brand” of the association and protect the best interests of the association. When there is doubt as to what to do, association leaders and Managers should seek the advice of qualified legal counsel so the association can stay in control and stay out of court.
By Edward Hoffman, Jr., Esq.
* The content for this Blog post is based upon the prior written work of the author as originally published in the November/December 2011 issue of Community Assets magazine and the May/June 2012 issue of Common Ground magazine.
