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Several common misconceptions exist with regard to copyright law as it applies to the public display of movies, music, and other media.  One such misconception is that individuals can show movies where they please simply by virtue of the fact that they purchased a copy of the DVD, rented a copy at the video store or via Netflix, or purchased the movie on pay-per-view.  This is simply not the case.

Federal law prohibits the public performance of copyrighted works.  A public performance is the performance or display of a copyrighted work at a place open to the public or where a number of persons outside of a normal circle of family and its social acquaintances are gathered.

The following example helps to illustrate this point: Suppose you invite a few personal friends over to screen a movie.  You purchase or rent a copy of the movie from the local rental store and view the film in your home that night.  Have you violated copyright law by illegally “publicly performing” the movie?  Most likely not.

However, suppose you took that same movie and showed it to a substantial number of homeowners on the association’s common area. In this case you have likely infringed the copyright of the movie.

In other words, the rental or the purchase of a copy of a movie does not carry with it the right to publicly exhibit the work. So, even if the movie store clerk tells you that you can show the movie you rented to as many people as you like, he or she does not have the right to confer that license.

In order to obtain the right to publicly exhibit a movie, associations should obtain a license from the rights owner.  Licenses can be obtained from three major licensing firms, but associations should always consult legal counsel prior to entering into any licensing agreement.

The major firms that handle these licenses include:

Criterion Pictures www.criterionpicusa.com (800) 890-9494

Motion Picture Licensing Corporation www.mplc.com (800) 462-8855

Swank Motion Pictures, Inc. www.swank.com (800) 876-5577

If you have any questions, please contact Jason Wood at 480-922-9292.

The information contained in this Homeowners Association Tip© is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.

© Ekmark & Ekmark, L.L.C. 2011 – reprinted at HOA Pulse with permission

Arizona Practical Questions Archive

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Recently, incidents have arisen in associations where owners are being defrauded and scammed by “contractors” using another legitimately registered contractor’s license number.  The particular contractor at issue actually advertised services in the association’s directory, using another contractor’s license number.  It is important to remember that an owner may try to hold the association responsible for the actions of these fraudsters.

Therefore, if the association has a newsletter, website, weekly newspaper, or other periodical in which it allows third parties to advertise, it should exercise the proper control over what appears in the periodical or on the website.

First, the association should make certain that it has exercised due diligence to confirm that the advertiser is legitimate.  Associations can never guarantee the accuracy of an advertisement since the information is subject to change between the time the association receives the ad and when it is printed or posted.  However, the association should undertake a good faith effort to confirm that the information provided by the advertiser is accurate as of the time it was received.

Second, the association should always include a prominent disclaimer in the periodical or on the website which plainly states that the association is not responsible for the accuracy of the advertisements included or for any damages resulting from readers or website users utilizing the advertiser’s goods or services.

Finally, the association should never place its faith in verbal assurances from a vendor.  If the association is outsourcing its advertising, periodical printing, or website development to a third party, it should always ensure that the vendor has indemnified the association for any damages that may result.

Following these general principles will help the association to make sure that its bases are covered when allowing third parties to advertise in media under the association’s control.  If you have any questions or would like assistance with your association’s advertisements, please contact Jason Wood at 480-922-9292.

The information contained in this Homeowners Association Tip is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.

© Ekmark & Ekmark, L.L.C. 2011 – reprinted at HOA Pulse with permission

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If an association knows that it has a big expense coming up or if an association incurs an unexpected expense, the board usually begins to look at what the association can do to generate revenue to pay for the expense.  Often, one option is a special assessment.  However, there are many factors that affect whether a special assessment will be an available option for a given association in a given situation.

First, the association has to determine whether a special assessment is provided for in the declaration.  Because the law does not provide a right or an avenue for charging a special assessment, the power to charge a special assessment must be located in the association’s declaration.

If there is a provision in the declaration for charging special assessments, the association then has to look for the restrictions on the purposes for which a special assessment may be charged.  For example, some declarations allow a special assessment for any proper association purpose.  This is the best type of clause to have because it allows for the most flexibility.  On the other end of the spectrum, many declarations restrict special assessments for the purpose of funding capital improvements.  If an association has such a provision, it could not, for example, charge a special assessment to cover a budget deficit due to the non-payment of assessments by owners.  Some declarations restrict special assessments to funding costs related to the common area.  In such a situation, an association with the responsibility to maintain front yard landscaping or the exteriors of the homes on the lots would not be able to charge a special assessment for this purpose.

Finally, an association will need to determine what, if any, approval is needed from the members before levying a special assessment.  Most declarations require the members to approve a special assessment.  A typical approval requirement is 2/3 of the members voting at a meeting where quorum is present.  The declaration will also often have specific notice and quorum requirements for approving special assessments.

It is a good idea for associations to know their ability to charge a special assessment before the need arises.  If your association would like our assistance in reviewing your association’s special assessment options, please contact Lynn Krupnik or Adrianne Speas at 480-922-9292.

The information contained in this Homeowners Association Tip is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.

© Ekmark & Ekmark, L.L.C. 2011 – reprinted at HOA Pulse with permission

Arizona Practical Questions Archive

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Federal and state wage and hour laws require employers to compensate employees for their work. Sounds pretty basic, right?  This can get confusing, however, when hourly employees “volunteer” their time.  For example, what if the association maintenance man “volunteers” to stay late to finish repairs?  What if the association administrative assistant “volunteers” to attend an association holiday event, perhaps to take tickets or pass out food?  Are these hourly employees really volunteering their time or are they working?

The Supreme Court says a “volunteer” is someone who:

•     Without promise or expectation of compensation,

•     But solely for his personal purpose or pleasure,

•     Works in the activities carried on by another person,

•     For their own pleasure or profit.

Applying the Supreme Court’s definition, it is doubtful that the maintenance man is working late solely for his “personal purpose or pleasure.” In addition, courts have held that when an employee “volunteers” to do the same or similar type of work he normally performs during the workday, the employee is not really a volunteer and must be compensated.  In our example, the association should compensate the maintenance man for staying late to make repairs.

The example of the administrative assistant who volunteers to attend a holiday event is trickier. In considering whether that employee should be compensated, the association should consider whether the employee is free to come and go as she pleases, or whether she has committed to attend the event for a specific time period.  The association should also consider whether the employee may eat, drink and socialize with friends, or whether she must stay at a particular place or perform a particular task until she can be relieved or until the event ends.

The freer the employee is to come and go and to enjoy the event on her own terms, the more likely she is present for her own personal pleasure and the association need not compensate her. The more restrictions on her time and her ability to enjoy herself as she chooses, the more likely she is not a volunteer and the association should compensate her.

As you can see, there may not be a “black or white” answer when it comes to whether an hourly employee is a volunteer under federal and state wage and hour laws.  Wage and hour laws are also highly complex, and the law assumes the employer to know them -- even when the “employer” is comprised of volunteers.  If you have questions regarding whether an association hourly employee is a volunteer under certain circumstances, or regarding wage and hour laws generally, please contact Nicole Miller at 480-922-9292.

The information contained in this Homeowners Association Tip is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.

© Ekmark & Ekmark, L.L.C. 2011 – reprinted at HOA Pulse with permission