IF DRONES AREN’T ALREADY buzzing around your community, it’s highly likely they will be soon. Association board members, managers, attorneys, and insurance professionals, among others, need to get a handle on the new challenges and possibilities presented by drones.
An estimated 3 million drones were expected to fly off the shelves to hobbyists and businesses in 2016, according to the Consumer Technology Association. Roughly 550,000 have been registered by the federal government since last December, and an estimated 1.3 million drone pilots are expected to earn their licenses by 2020.
Real estate agencies, insurers, utility companies, association reserve providers, and others currently are using drones to capture images, inspect conditions, and collect data. Meanwhile, as Amazon, Google and others try to work around federal regulations for proposed drone delivery services, a U.S. company called Workhorse has started dropping off packages up to 10 pounds to its customers. Drone styles and capabilities are rapidly evolving, with high-resolution cameras and sensing devices becoming the latest upgrades. Consumers can choose a quadcopter or muscle up to eight propellers for more lift and power. They’re getting smaller, better, and cheaper.
As technology and applications change, the practical implications and legal landscape are rapidly evolving too. Governments at all levels have been trying to catch up.
Under new rules issued by the Federal Aviation Administration, businesses can operate drones any day, every day, at any time during daylight. Those flying for fun have even fewer federal requirements.
“As the government sets the parameters on the commercial and recreational use of drones, associations must be prepared to address these issues head on,” says Jim Dodson, PCAM, executive director of EWA by Gentry Community Association in Hawaii, a community with 7,600 homes and 20,000 residents.
The sky’s the limit for drones, but how associations deal with them is up in the air.
Will drones intrude on privacy and create nuisances for homeowners? What association rules would be appropriate? How would they be enforced? How can boards take advantage of this new technology?
Before considering community-specific rules, association volunteers and managers must first familiarize themselves with government regulations.
The FAA, responsible for the “safe and efficient” operation of aircraft in national airspace, recently rolled out two sets of rules for small “unmanned aerial systems,” or drones, weighing less than 55 pounds.
Hobbyists. Rules for small drones used for hobby or recreational purposes went into effect in 2015. Drones must be registered with the federal government and labeled with that registration number. Operators must be at least 13 years old and a U.S. citizen or legal permanent resident. Registration costs $5 and is valid for three years. Hobbyists aren’t required to obtain a pilot’s certificate.
Commercial. Businesses operating small drones must comply with FAA’s rules that became effective in August. Operators must be at least 16 years old, pass a written exam, and be vetted by the Transportation Security Administration (see “Flight Plans” sidebar below).
FAA’s commercial rules, known as “part 107,” detail safety-related requirements. For example, commercial drones must stay within the line of sight of the pilot or “visual observer,” must avoid controlled airspace such as airports, and operate only in daylight no more than 400 feet above ground level at a maximum speed of 100 mph. Drones may not fly over any person not directly participating in its operation.
Public agencies flying drones may continue operations under a prior waiver or opt in to the new rules. Certain provisions, such as daylight operation and visual line of sight, may be waived. Commercial operators also must be registered with the FAA and their drones must have visible registration markings.
Both sets of rules are available at www.faa.gov/uas.
FAA’s rules came after many state and local governments adopted their own drone regulations. Whether those current regulations and future laws passed by lower levels of government are valid depends largely on whether they conflict with FAA’s rules, a question known as pre-emption. According to a fact sheet FAA issued in 2015, its rules on safety and efficiency would take precedence, and it would leave regulations on land use, zoning, privacy, trespassing, and law enforcement to state and local regulations.
Troy Rule, a law professor at Arizona State University, argues for a multi-governmental approach to drone regulations, writing, “FAA, a centralized federal agency, lacks the information and resources necessary to effectively regulate inherently local drone use issues in every corner of the country. Recognizing this fact, states and cities are increasingly crafting their own drone laws.”
In 2015, 45 states considered laws to restrict drone operators, according to the National Council of State Legislatures. As of March 2016, 25 adopted new laws regulating drones—many addressing privacy concerns; 16 of these states restrict private operators.
Municipalities have jumped in too. The City of Los Angeles filed criminal cases in January against two civilian pilots for allegedly flying their drones within 3 miles of several hospital heliports and a police helicopter base—“controlled airspace” under the city’s ordinance. Following drone accidents, Barnstable, Mass., and the Cape Cod National Seashore banned drones from their beaches to foster privacy and safety.
RULING COMMUNITY AIRSPACE
In addition to government regulation at multiple levels, boards and managers should understand how the other moving parts—technology and uses—affect their community’s unique demographics and characteristics. Opportunities and risks abound for associations.
Impacts by commercial drones will vary depending on the type of community. In condominiums and other communities with high-density and stacked units, residents may not appreciate the prospect of drones whirring around their windows or buzzing as they relax on their patios and decks, invading their privacy, and disturbing their property right to peaceful enjoyment.
Privacy cases have started surfacing already.
“We’ve had several homeowners come to board meetings concerned about drones,” says Kevin Bishop, CMCA, AMS, PCAM, president of Renaissance Community Partners in Gilbert, Ariz.
One resident in a Renaissance-managed community complained to the board after a drone flew overhead while she was tanning in the nude, he recalls.
Heather Graham, CMCA, AMS, PCAM, executive vice president of Community Association Management Professionals in Tyson Corners, Va., says some of the company’s clients have had the same concerns about privacy.
“Several of our associations are certainly skeptical right now as the technology is still so new. They’re unsure how they may be impacted,” observes Graham.
So, does the association have a duty—or even the authority—to protect residents’ privacy? Can associations limit the time, day, and location of drone operations? Can communities ban commercial drones like unwanted solicitors?
Most boards have broad authority to regulate drone use by hobbyists to protect privacy and reduce nuisance.
Stephen M. Marcus, a fellow in CAI’s College of Community Association Lawyers (CCAL) with the Boston firm of Marcus, Errico, Emmer & Brooks, says boards can use their rulemaking authority to govern how common areas and facilities are used.
Marcus says reasonable regulations might include limits on pictures in units and on limited common elements, noise, and requiring compliance with laws.
Kenneth R. Sauter, a CCAL fellow with Hill Wallack in New Jersey, observes that drones can be regulated like other activities taking place in common areas, such as riding bicycles and flying model aircrafts.
“None (of our clients) has proposed rules yet, but I suspect they will,” he says.
The rulemaking process should begin by identifying homeowner concerns, which will vary from one community to the next. Any rules developed by an association should be clear and enforceable. And owners have a right to know what’s expected of them.
Sienna Plantation Associations in Missouri City, Texas, a community of 20,000 residents, is evaluating FAA’s rules to see if it should take further steps. Right now, there are many “unknowns,” says Sandra K. Denton, CMCA, LSM, PCAM, general manager of the community and a CAI past president.
She doesn’t believe protecting privacy is the association’s job.
Bishop agrees. In the incident of the sunbather, the association told her to call police. “The association doesn’t have an obligation to ensure a homeowner’s privacy or to police the airways,” he says.
The master association board at Ewa by Gentry, which consists of 5,600 detached homes and 2,200 townhomes, has updated its drone policy based on FAA’s rules. The community is working with its attorney and insurance agent on safety and privacy issues and to educate its 28 subassociations.
“We monitor commercial and residential use of drones by requiring an application and documents showing compliance with FAA rules, including an owner’s authorization for commercial filming and airworthiness certificates,” says Dodson, noting that the community has an unofficial drone club.
Since the community is located within 5 miles of three airports, the association also requires drone operators to provide written approvals from the airport control towers.
In densely populated communities, as long as rules don’t conflict with FAA’s safety-related restrictions, associations could limit the days and times drones would be permitted to record images. They could, for example, ban photos and videos on weekends and holidays or during certain times, and limit the distance drones may fly near buildings and the swimming pool.
While one technology known as a “geo-fence” would allow property owners to erect a virtual barrier against drone entry, FAA’s rules don’t require drones to include this technology. FAA pre-empts other levels of government from requiring this particular equipment. Another strategy would be for association leaders to press local governments to exercise their zoning powers and adopt such regulations for all residential communities within their jurisdiction, suggests Rule, the law professor.
Any rules an association adopts should be based on a diligent process (see “Rulemaking for Homeowner-Hobbyists” sidebar at right).
How should an association enforce its rules? Should the board be allowed to disable a wayward drone?
In the Netherlands, eagles are being trained to pluck drones out of the sky if they’re flying in prohibited space. In Kentucky and California, some property owners have resorted to self-help measures, shooting drones midflight.
If the association knows who’s flying the drone, the obvious first step would be to notify the individual that he or she is breaking the rules, handling it the same as any other rules violation. Meanwhile, boards may find local officials will effectively enforce FAA and other governmental regulations without the need for association intervention.
While the FAA cannot delegate its authority, it does seek partnerships with state and local law enforcement agencies that, according to FAA, “are often in the best position to deter, detect, immediately investigate, and, as appropriate, pursue enforcement actions to stop unauthorized or unsafe drone operations.”
Thus, if a board becomes aware of a drone violating FAA rules by “careless or reckless” operations that endanger individuals and property on the ground, it should contact local law enforcement. Local authorities would gather evidence, interview witnesses, and refer the matter to the FAA Regional Operation Center for investigation. Drone operators would face civil penalties, such as revoking the pilot’s certificate.
Drones also present boards with opportunities to perform association tasks and to market their communities.
They can provide attractive images and videos for websites, brochures, and social media. They also can inspect conditions that are hard to view, such as roofs, gutters, siding, and flashing, thereby reducing safety risks for inspectors. They can evaluate storm damage and monitor contractors’ work too.
“As a business opportunity, I think they’re like most tools: They could be amazing, and they carry a lot of risk,” says Bishop, the Arizona manager.
He notes that they could simplify compliance inspections and allow staff to respond to issues quickly. He imagines a scenario where, if a resident reports that a playground has been vandalized, he could use a drone to survey the damage.
With on-site staff, large-scale associations may be well positioned to operate a drone.
But smaller associations may not be ready or able to meet FAA’s requirements. They would need a volunteer willing to take the certification test, inspect and maintain the equipment, and register and operate the drone. Instead, smaller communities may turn to their managers. Indeed, it’s foreseeable that management companies will soon offer clients a fleet of drones operated by trained and certified remote pilots.
Boards that want to operate a drone for association functions need to consider several factors (see “Operation Resolution” sidebar at right).
CONSIDERING THE RISKS
One of the factors holding many communities back from operating their own drone may be risk management issues.
Dodson, for example, is confident drones will be a part of Ewa by Gentry’s future, but the board still needs further clarification on the risks.
Potential concerns include electronic component failure, hijacked controls, hacked video feeds and homeowners’ personal data, operator negligence or loss of control, and invasion of privacy. FAA’s rules don’t require operators to carry insurance.
Whether the board operates a drone or delegates this responsibility to its manager, it should insure against claims of bodily injury, property damage, or personal injury. Standard commercial general liability policies don’t cover aircraft, including drones. The board would need a separate aviation policy or endorsements for bodily injury and property damage, and personal and injury liability, which would cover claims such as invasion of privacy. Any person who operates the drone should be covered as an insured party.
Karen O’Connor Corrigan, CIRMS, president of O’Connor Insurance Agency in St. Louis, notes that much like drone technology, insurance is evolving.
“A significant question is that exposures are not well known. Thus, the industry is uncertain about costs for these policies,” she says.
What if a homeowner’s hobby drone causes an injury in the community?
“Individuals who own a drone likely have personal liability coverage within their homeowner’s policy so long as the drone is used only for hobby and recreation purposes,” Corrigan notes.
With their growing popularity and evolving technology, drones are both exciting and troublesome. It’s not too early for association leaders to consider governmental regulations at all levels, identify community concerns, become familiar with the opportunities and risks, and evaluate appropriate ways to address them.
One thing’s for sure: While many questions are still up in the air, this technology won’t get put back in the hangar.
BY HILLARY B. FARBER, ESQ., AND MARVIN J. NODIFF, ESQ.
Hillary B. Farber is a professor at the University of Massachusetts’ School of Law. She speaks and consults nationally and internationally on drones, focusing on their public and private use. Marvin J. Nodiff, a CCAL fellow, has practiced community association law in Missouri for more than 30 years and recently retired. He has written several novels about associations. Drones are featured in his novels, The Dark Condos and The Condo Kerfuffle, available at www.caionline.org/shop.