Wi-Fi issues in condominium associations and HOAs

Wi-Fi has become a necessity for almost anyone who lives in a condominium association.  However, the law is often slow to evolve to new technologies and many master deeds or declarations were drafted before Wi-Fi even existed.  As a result, potential legal issues related to Wi-Fi use are rarely addressed in the governing documents of community associations. Accordingly, condominium and homeowners associations should amend their governing documents or adopt rules regarding acceptable Wi-Fi use.  As will be discussed below, governing documents should address both private Wi-Fi use and public Wi-Fi use within the community association.

Wi-Fi and the Governing Documents

i. Private Wi-Fi Use

Many community associations will not offer a Wi-Fi network that is used by all owners. Rather, each owner will be responsible for setting up their own wireless network. In this scenario, owners are most concerned about privacy and preventing another owner from accessing their Wi-Fi network. A relatively simple amendment to the governing documents could be added that prohibits one owner from accessing another owner’s wireless service.  A common example of such a provision is a follows:

Internet Use and Security. No Co-owner, occupant of a unit, guest of a Co-owner, or invitee of a Co-owner shall access another Co-owner, occupant, guests or invitees Wi-Fi, internet, cable or other telecommunications signals, lines or transmissions without express written consent of that person. The Board of Directors, without the necessity of an amendment to this Section, may promulgate reasonable rules and regulations regarding the use of Wi-Fi, internet, cable or other telecommunications signals, lines or transmissions by adopting Rules and Regulations under these Bylaws.

 

ii. Public Wi-Fi Use

Community associations that offer a Wi-Fi network that can be used by all owners in areas such as a clubhouse or a pool should also be prepared to deal with potential liability issues that arise from open networks.  Accordingly, a condominium or homeowners association that has a public network should consider adopting an acceptable use policy or rules related to Wi-Fi use.  Items that should be considered when drafting rules or an acceptable use policy are as follows:

• Who can use the Association’s Wi-Fi? Is it limited to co-owner or occupants of a unit? Is the Wi-Fi made available to guests? Is a password required to access the Wi-Fi?

• Is there a limitation on accessing the Wi-Fi, internet, cable or electronic devices of another co-owner or occupant?

• Is there a prohibition preventing the use of the Wi-Fi for illegal purpose?

• Does the policy prevent someone from using the Wi-Fi network to release viruses or other damage to other networks or electronic devices?

• Does the policy prevent the transmission of abusive, profane or sexually offensive materials? Does the board of directors have discretion to determine what violates these provisions?

• Are there any limitations on the amount of time that someone can spend on the Wi-Fi or the amount of data that can be downloaded or streamed?

• Is there a disclaimer of liability for anyone who suffers damages as a result of using the Wi-Fi network and is a user required to assume the risks of using the network?

• Is there a provision in the policy that requires someone to defend, indemnify and hold harmless the Association in the event that the Association is sued as a result of improper use of the network?

In addition to having rules and an accessible use policy, community associations should also ensure that they have appropriate insurance coverage in place for lawsuits that arise out of Wi-Fi misuse and understand potential exclusions to coverage when formulating the accessible use policy and rules regarding Wi-Fi use.

Laws applying to Wi-Fi Use

If your community association is having difficulty amending its governing documents, it may be possible to rely on other more generic provisions to enforce improper Wi-Fi access. Many governing documents will contain a general catch-all provision that prevents unlawful conduct.

Virtually every state has adopted a statutory scheme that criminalizes unauthorized access of another’s computer. In many cases, a violation of the applicable state statute would also constitute a violation of the above provision of the governing documents. However, this would likely be more difficult and cumbersome to approve than simply banning access, as a condominium or homeowners association would then bear the burden of proving that all of the elements to prove the illegal activity has occurred as set forth in the applicable statute.

The Federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et. seq.(the “CFAA”) also makes it unlawful to access almost any computer in the United States without authorization. Specifically, the CFAA makes it illegal to “intentionally accesses a computer without authorization or exceed authorized access, and thereby obtains– information from any protected computer.” The CFAA defines a “protected computer” as being a computer:

(A) exclusively for the use of a financial institution or the United States Government, or, in the case of a computer not exclusively for such use, used by or for a financial institution or the United States Government and the conduct constituting the offense affects that use by or for the financial institution or the Government; or (B) which is used in or affecting interstate or foreign commerce or communication, including a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication of the United States.  Facebook, Inc v Power Ventures, Inc, 252 F Supp 3d 765 (ND Cal 2017)

In interpreting the above definition, federal courts have held that any computer that is connected to the internet and that is used in a manner that affects interstate commerce is subject to the CFAA. Accordingly, a violation of the CFAA may constitute a bylaw violation if the governing documents prohibit illegal activity.

Additionally, in cases where a community association offers Wi-Fi, and it is used to improperly access other computers, the CFAA offers a private right of action in addition to criminal penalties. Specifically, under the CFAA, “[a]ny person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.” 18 U.S.C. § 1030(g). The CFAA defines “loss” to mean “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.” Id. § 1030(e)(11).

In interpreting the damages that are for a violation of the CFAA, the courts have held that attorney’s fees and costs incurred in connection with an investigation into a violation of the CFAA are recoverable.

While it is best for community associations to amend their governing documents or adopt specific rules that deal with Wi-Fi use, it may be possible to address these issues based on more general language in the governing documents if the community association can establish a violation of state of federal law. Additionally, community associations should be aware that in the event of a breach by a third-party, the CFAA provides the community association with a civil remedy and the ability to collect attorney’s fees and costs associated with investigating a violation of the CFAA.

Conclusion 

As Wi-Fi continues to become more prevalent, so too will the legal issues that come with it. Condominium and homeowners associations must be prepared to deal with potential legal issues that will arise from Wi-Fi use.  Condominium and homeowners associations that have not updated their master deed, bylaws or declaration to account for potential Wi-Fi issues should consider doing so.  In communities that have public Wi-Fi use, the board of directors should consider adopting an acceptable use policy as part of its rules.

Kevin Hirzel is the Managing Member of Hirzel Law, PLC and concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. He has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2018, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel was named an Up & Coming Lawyer by Michigan Lawyer’s Weekly in 2015, an award given to only 30 attorneys in Michigan each year. He represents community associations, condominium associations, cooperatives, homeowners associations, property owners and property managers throughout Michigan. He may be reached at (248) 478-1800 or kevin@hirzellaw.com.