Social Networking Can Improve Communications But Watch out for the Liability Risks

Published on: February 1, 2011

“All the little birdies go, ‘tweet, tweet, tweet.’” But they’re not alone. And with the millions of tweets, blogs, and other messages now swirling in cyberspace, it’s a wonder the birds can hear each other above the human din.

The use of Twitter and other social networking platforms, such as Facebook, LinkedIn and MySpace, is growing geometrically. And while community associations are hardly in the forefront of this (or any other) technology, they haven’t been entirely left behind, either. Many communities are discovering that Facebook, in particular, allows them to convey information, encourage owner involvement and build community more effectively than the Web sites, newsletters and e-mail on which they now rely.

Melissa Garcia, an attorney in the Denver, CO law firm HindmanSanchez – who is pioneering the use of twitter at her firm – predicts that social media communications will eventually overtake and replace other association communications tools. Younger residents, especially, don’t monitor their e-mail regularly and rarely surf the Web any more, Garcia says, so “they’re not likely to visit a community association’s Web site, even if it’s a good one. But they live on Facebook and Twitter,” she notes, and increasingly “this will be the only way to reach them.”

If social media represents the communications vehicle of the future, it also creates a whole new set of liability risks for associations that have ventured into this new world or are contemplating doing so.

Multiple Risks

The most obvious risk is that someone will sue the association for libel based on something posted on its Facebook page, tweeted or blogged via an association platform. But libel is by no means the only exposure association boards need to consider. Communities that maintain social networking sites incur the same liability risks as any company that distributes information, a list that includes, but is not limited to: Copyright infringement (for reproducing content without permission), plagiarism, interference with contractual relations, emotional distress, and invasion of privacy, to name a few.

The Wall Street Journal reported recently that more than 100 law suits were filed against bloggers and other social media participants last year, compared with only 12 in 2003. Separately, the media Law Resource Center in New York tallied more than $17 million judgments against bloggers as of mid-year, 2009. Recent reports of litigation include:

• A $15,000 suit filed by the owner of a vacation condominium, claiming that negative comments by a guest were defamatory and economically damaging.

• A $25 million suit filed against a blogger who claimed (erroneously, it turned out), that the condominium developer he was criticizing had declared bankruptcy.

  • A $50,000 suit filed against a tenant who complained about mold in her apartment.
  • A $1 million lawsuit filed by a homeowner association against an owner, who wrote critical blogs accusing the association board and management company of violating the community’s governing documents and state laws.

The risk of saying something that will trigger a law suit also exists with Web sites and e-mail, but the risks are magnified on social networking sites, such as Facebook, where information can be instantly catapulted beyond the site into cyberspace, increasing both the audience and the association’s potential liability.

Highlighting that concern, a California appeals court ruled recently that comments made in a blog were not subject to privacy protections and could be reprinted elsewhere without the blogger’s permission. In this case, a college student wrote at length and in disparaging terms in her MySpace blog about her home town. A reader (the principal of the high school the student had attended) sent the comments to the local newspaper, which published them as a letter to the editor.

The student sued, claiming that her blog was a private forum. The court disagreed, ruling (in Moreno v. Hanford Sentinel Inc.) that posting the comments on her blog “made [them] available to any person with a computer, and thus opened [them] to the public eye…No reasonable person would have had an expectation of privacy regarding the published material,” the court added, noting that “the potential audience was vast.”

Some Statutory Protections

Federal law does provide some protection for operators of social media sites. Section 230 of the Communications Decency Act eliminates liability (primarily for defamation) for information posted by third parties and Section 512(c) of the Digital Millennium Copyright Act eliminates liability for copyright infringement claims involving content posted by third parties. Of course, these statutes provide a defense if a community is sued; they don’t preclude the filing of suits or the need to defend against them.

Community associations that establish social media site can protect themselves further by strictly controlling access and use. Facebook is known for its open framework, allowing designated “friends” to both read and respond to information posted on an owner’s page by “writing on the [Facebook] wall.” But Sanchez points out that community associations can use Facebook’s privacy controls to make the association’s page in effect “read only,” inviting “friends” (community residents) to read information posted there, but allowing only board members or those they designate to post content. Associations that restrict access in this way should direct owners who want to comment to attend the next board meeting or contact board members directly, Sanchez suggests.

Fans of social networking view the ability to engage in conversation as one of the primary appeals of these platforms. Community associations that want to take advantage of this open forum feature and allow owners to post comments on a Facebook page (or a Web site, for that matter), should post a disclaimer stating that the goal is to encourage an open exchange of information, but that the views expressed do not represent the official position of the community association.

Boards should also establish standards for any social media site they establish, specifying, for example, that conversations must be civil and prohibiting comments using foul language or deemed to be libelous or offensive. Boards allowing third party postings should monitor them closely and remove any comments that violate their rules. The need for monitoring and the difficulty of doing so consistently are among the potential problems boards should consider in deciding whether to create a social media platform and how to structure it.

Hold Your Cyber Fire

Boards can reasonably control who has access to a community’s social networking platform and what they can say on it. But they have no control at all over what residents can say, tweet or blog on platforms of their own. And condominium owners, like members of the general population, can be intemperate in their responses to decisions or people they don’t like, making comments that are sometimes rude, insulting, and often untrue.

For board members on the receiving end of these barbs, the urge to respond to every negative tweet and refute every critical blog is understandable, but usually unwise. There is little to be gained by getting into a tweeting or blogging duel with owners. By responding in kind to an owner’s cyber-rant, board members sink to the ranter’s level and run the risk of bringing it to the attention of other owners who might not have seen it.

Ignoring critical or even nasty cyber-comments is usually the best policy, but not always. If an owner is circulating information, or misinformation that is upsetting other owners or potentially damaging to the community, then the board will have to respond. But the response should be in a letter to owners – not a blog or a tweet or a Facebook comment – and it should be short and restrained, correcting misinformation, stating the position of the board, avoiding any direct mention or criticism of the ‘ranter,’ and encouraging owners to attend the next board meeting if they are concerned and want more information about the issue.

Policies Needed

Social networking will no doubt appeal to some associations more than others and to many not at all. Certainly any community that has a social media presence or is contemplating one should formulate policies addressing the liability and other concerns these communications platforms can create. But even communities that have no intention of ever creating a Facebook page or opening a Twitter account should consider formulating social media-type policies, because the content published on a Web site or communicated via e-mail can create many of the same headaches and potential liability risks as the comments posted on a Facebook page.

Social media policies should, at a minimum:

  • Define and, where appropriate, limit who has access to the sites. You will want to limit access to “friends” on a Facebook page and to association “members only” on at least some sections of an association Web site.
  • Control who is allowed to “speak” on association platforms.
  • Expressly prohibit negative or disparaging comments about individuals or entities.
  • Prohibit publication of any confidential or potentially embarrassing information – about owners or employees, or anyone else – that might violate their privacy rights.
  • Assert the right of the board to remove comments that violate the standards for published comments and to deny access to individuals who fail to respect the terms of use.
  • Establish procedures for screening content before it is posted and for removing content deemed to be offensive, potentially libelous, or otherwise inconsistent with the usage standards.

Are You Covered?

Community associations should also review their insurance policies to assess what coverage they provide, if any, for potential social networking exposures. Community association carriers have not yet developed coverage that targets social media content specifically, according to Joel Meskin, vice president in charge of community association product for McGowan & Company, Inc. While some general liability policies broadly cover defamation, Meskin points out, these policies typically limit the individuals protected by that coverage.

Most directors and officers liability policies specifically exclude defamation, but Meskin says it is possible to find that coverage. If the association’s D&O policy covers defamation and does not specifically exclude social networking, then the coverage would apply to the community’s social networking activities. But as noted earlier, defamation is not the only risk related to social media. Copyright infringement, emotional distress and invasion of privacy are also exposures that standard community association policies do not typically cover. Insurers that do not currently exclude social networking from their defamation coverage will almost certainly begin adding those exclusions if they start to see significant losses in this area. Social networking coverage will be available, Meskin predicts, but in separate policies priced to reflect the risks. For communities that establish social networking platforms, insurance coverage will be a necessary expense.

As social networking continues to grow, we advise boards to:

  • Seriously consider the advantages and risks of establishing a social media platform. There may be good reasons for your community to create a Facebook page, but the fact that others have done it is not among them.
  • Develop a social media policy (covering all forms of Internet communication) and adhere strictly to it.
  • Never accuse anyone of anything in writing. Even if you are convinced the accusations are true, cyberspace is the last place you should air them.
  • Think carefully before tweeting, blogging, posting, or e-mailing any communication. Comments made in cyberspace have the velocity of a bullet and the half-life of uranium. They travel quickly, can hang around for a very long time, and have the potential to do great harm. The most effective way to avoid liability for comments made on a Web site or a social media platform is not to post them – or allow anyone else to post them – in the first place.