Accuracy Essential – Caution Advisable – for Condominium Boards Delivering Sexual Predator Warnings

What’s in a name? When it comes to warning condominium owners about sexual predators living in their community, the condominium law answer is: The potential for huge liability and immense damage awards if the individual identified as a predator turns out not to be one.

A South Carolina condominium board made that mistake recently and the association is paying the $890,000 cost of that error. The board of this resort community circulated a flyer obtained from the state sex offender registry identifying William James King as a convicted sex offender. Board members told owners that the individual pictured on the flyer was James E. King, who owned two units in the community. They continued to make this representation, even though the condominium-owning King did not resemble the photo and several owners insisted that the man pictured in the flyer was not the James King they knew as their neighbor.James King sued the board, arguing at trial not only that the board had identified him incorrectly, but also that board members were motivated at least in part by his history of late dues payments and his refusal to make voluntary contributions toward the association’s maintenance expenses. Demonstrating considerable sympathy for King (and none at all for the board) a jury awarded him $550,000 in actual damages and $340,000 in punitive damages.

Complicated Questions

The obvious take-away for boards is: Check your facts. Verify information before disseminating it and don’t ignore contrary information you receive. But this case provides more than an object lesson about the importance of accuracy when identifying sex offenders or making public accusations of any kind. It also highlights the complicated questions boards confront when considering how to deal with sexual predators in their community. For example:

• Do boards have an obligation to inform owners if they learn that a convicted sexual predator is living in the community?
• What form should that notice take? How much or how little detail should it include?
• Do boards face potential liability if they fail to notify owners of a predator who harms someone in the community?
• Can condominium associations prohibit convicted predators from living in their community?

Starting with the first question , although you will find attorneys who disagree, we think there is no doubt that boards have an obligation to inform owners of known risks in the community, and a sexual predator would certainly meet that definition. That said, boards face a tangle of competing legal liability risks.This is clearly a ‘sued if you do and if you don’t’ issue. Owners harmed by a predator would almost certainly sue the board for failing to disclose the predator’s presence. But boards also might well be sued for violating a predator’s privacy rights. And boards that provide notice of a predator in the community arguably create the expectation that they will do so in the future and incur potential liability if they fail to notice a predator has moved in.

Disclose Carefully

Despite these valid concerns, we suggest erring on the side of disclosure. Boards don’t want to be sued, but they also don’t want anyone in the community to be harmed. The human concerns, in our view, shift the balance strongly in favor of disclosure. And while the liability risks are real, there are ways to mitigate them.

• Establish procedures for dealing with sexual predator information. Designate a board member to check the registry periodically – at least once a year – and compare that to the list of known residents in the condominium. Monitoring the registry will reduce the risk that the board will fail to notice a predator and will demonstrate due diligence in trying to track that information. That won’t prevent a suit if the board fails to identify a predator, but it will strengthen the board’s defense.
• Consider sending notices periodically to owners unconnected to a specific predator alert, explaining how they can consult the registry themselves.
• Don’t name names. If the board believes, based on its review of the registry, that a resident is a convicted predator, it should relay that information to owners, but without identifying the individual. Simply tell owners that the board thinks it is likely that a predator is living in the community and remind them that they can obtain more detailed information from the state sex offender registry.
• Remind residents in your notice that most state laws creating a registry prohibit “threats, intimidation, or harassment” of offenders, and caution that any actions of that kind could result in a law suit and a possible financial judgment. Have the association’s attorney review the wording of your notice, the registry listing, and the list of condominium residents before sending the notice.

To Ban or Not to Ban

Some condominium associations have decided that simply notifying owners if a predator moves into their community isn’t enough; they want to prohibit predators from moving in. This is something of an open legal question, but most attorneys agree that associations can bar predators from living in their community (though they can’t prevent them from buying units there) by enacting amendments to their covenants or bylaws approved by the required supermajority of owners. A board-approved rule won’t be sufficient.Predators aren’t currently a protected class, so running afoul of discrimination laws isn’t likely a concern, and owner approval isn’t likely to be a problem. It is hard to imagine that any owners would argue in favor of opening the community’s doors to predators. But associations should think carefully and consider the risks before banning predators outright from residing in the community. In one closely watched case nearing trial in Texas (Whipple et al v. Valley View Village Condominium Homeowners Association), a convicted predator and his wife are arguing that a by-law prohibiting him from living in the community violates his rights, interferes illegally with the ability to buy and sell property, and is contrary to public policy.There aren’t many legal precedents on this question. The U.S. Supreme Court a few years ago refused to review and let stand an Iowa law preventing sex offenders whose victims were children from living within 2000 ft. of a school or a day care center. The Iowa Civil Liberties Union had argued that the restriction was an unconstitutional form of continuing punishment, making it impossible for offenders to live legally in most urban neighborhoods – one of the arguments Whipple is using in the Texas suit.

Troubling Questions

In a 2001 case (Mulligan v. Panther Valley Property Owners Association), a New Jersey Appeals Court rejected an association by-law barring predators because of public policy concerns the court found to be “troubling.” The court acknowledged that many people choose to live within common interest ownership communities specifically because of the perceived security they offer. But that “understandable desire of individuals to protect themselves and their families from some of the ravages of modern society…should not become a vehicle to ensure that those problems remain the burden of those least able to afford a viable solution,” the court said.The court also acknowledged that predators aren’t a protected class. “[But] it does not necessarily follow,” the court said, “that large segments of the state could entirely close their doors to such individuals, confining them to a narrow corridor, and thus perhaps exposing those within that remaining corridor to greater risk of harm than they might otherwise have had to confront.”This is one decision by one court. It does not necessarily predict how other courts in other jurisdictions would decide these issues or whether they will share the New Jersey court’s public policy concerns. But association by-laws or covenants banning predators will almost certainly be challenged. Unless your association wants to be the test case (and finance the litigation costs), the best advice for now is to limit board actions to notifying owners if predators move into the community, putting ban proposals on hold until the courts have provided more guidance on whether these measures will be upheld and what form they must take to withstand judicial scrutiny.