Community Associations that Don’t Protect Their Names Could Lose Them

Published on: February 25, 2006

What’s in a name? When Shakespeare’s Juliet asked that question, she was talking about Romeo, whom she loved despite the name that placed him on the opposite side of a family feud. Community associations asking that question today would more likely be thinking about their Web sites, because “what’s in a name” on the Web is the potential for confusion, litigation, and liability. That’s why it is essential for a community to protect its name and control its use.

When a community association, or any other entity, creates a Web site, it also adopts a “domain name” attached to an Internet address. To prevent confusion and prevent others from using the same name and address, associations should register their name and address with ICANN (the Internet Association for Assigned Names and Numbers), a non-profit organization that oversees the allocation of domain names and arbitrates disputes over their use. By registering their domain name (at a cost of approximately $8 per name), associations prevent other entities from establishing a Web page at an address that should belong logically to the association. But it is important to register through a reputable ICANN Registrar, so the name is actually owned by the association and not by the company that registers the name on the association’s behalf.

Some companies register multiple names – their domain name plus numerous similar spellings of it – so that visitors who spell the name incorrectly or mistype it will still end up on the company’s site. This makes sense, because businesses don’t want to risk losing any prospective customers. Community associations don’t have the same concern or the same need to register several variations of their name. Happy Haven – might want to register Happy Haven and Happy Haven with ICANN, but going beyond that probably isn’t necessary for most communities.

Registering a Trademark

Their domain name isn’t the only name about which associations should be concerned; protecting a trademark name may be equally important. Unhappy homeowners will sometimes use the community association’s name, attached to a different Web address, to post disparaging comments about the management company, the board, other owners, or all of the above. Registering the trade name won’t prevent the disparaging comments, but it will prevent the appearance that the association is either making or condoning them. Similarly, developers or management companies have been known to use the name of a well-known condominium community to market their services or to sell time shares, implying a connection or an endorsement that does not exist.

Registering the community’s name as a trademark can prevent such abuses. Even without formal registration, your community’s name may have trademark protection under common law, if the name is unique and if your community association was the first entity to use it. For example, if a company calls itself “Majestic Mirror Enterprises,” you probably would not be able to obtain trademark protection for “Majestic Mirror Community Association.” You also cannot normally protect names that are in the public domain, such as Diamond Head, Grand Canyon, or White House. On the other hand, you might be able to piece together several words, some of which are in the public domain, to create a valid trade name – Grand White Diamond Condominium, for example.

The advantage of actually registering a trade name with the state is that you create a searchable public record, putting others on notice that the name is reserved. Other entities contemplating the same name could learn from a search of the public record that the name was not available, and pointing to the registry should be enough to persuade someone who has begun using the name not to do so. If you claim common law protection for your name, on the other hand, you would probably have to file suit or seek arbitration to assert your rights; simply insisting that the name is yours is unlikely to be enough.

Some states will automatically protect the name under which a business incorporates, an option that is available to community associations as well. Like trademark registration, incorporation creates a public record of names that are off limits to others. Of course, this system works only if people actually search the record before selecting a name, which isn’t always the case.

Developers creating a master-planned community in Hawaii recently either did not review the records or did not review them carefully enough. But whatever the reason, they selected and registered the name of a condominium community that had previously incorporated. By the time they discovered the error, they had spent thousands of dollars on marketing and promotional materials for their new development, so they ended up paying the condominium association thousands of dollars more for the right to continue using the name.

Controlling the Message

Although I’ve been talking mainly about ways to protect a community association’s name, it is equally important to control the information associated with the community’s name – especially the information posted on the association’s Web site. If an association owns a Web site, it might be sued for anything that appears on it. This suggests the need for several precautions, primary among them:

  • Make sure the individual or individuals charged with updating the site are responsible and reliable and have no hidden agendas, such as a desire to criticize or embarrass the board or other members of the community.
  • Establish a process for screening Web content. At least one member of the board should review and approve all material before it is posted.
  • Formulate clear editorial guidelines specifying what is and is not allowed on the site. Aggregate information about accounts payable is probably ok, but you should not publish the names of delinquent owners because of privacy concerns. You should also generally exclude information about pending or potential litigation, personnel matters, and anything else the board might discuss in executive session.
  • Create a portion of the site restricted to residents only, requiring a user name and a pass code for access. General information about the community and its amenities can be a useful marketing tool, but budget information, the minutes of board meetings, and the names and addresses of residents should not be available to the general public. (Prospective buyers typically will review budget information and board minutes, but it is better if that information comes directly from the seller rather than from the association, which, absent a state law to the contrary, does not typically have a business relationship with the buyer.)
  • Include a disclaimer on the public portion of the site stating that the association does not guarantee the accuracy of the information posted there and cautioning visitors to rely on original documents only. This precaution is designed to prevent buyers who purchase homes in the community from claiming later that they relied on Web site information that turned out to be exaggerated or erroneous, and suing the association for damages they claim to have suffered as a result.