Homeowners Associations & Movie Nights

It’s the time of year for planning neighborhood events again, now that the holiday hubbub has settled down and newly elected board members are starting to get used to their jobs.

However, keep in mind that planning events means more than just picking dates on the calendar and opening up the clubhouse. If your association plans movie nights or events that include concerts, playing music, or other performances you may need to evaluate whether the association will need to pay license fees. United States copyright laws protect the rights of people who created (and distributed) movies and music. It is probable that to hold a “dive in movie” or other event your association will need to obtain a license.

Failing to obtain licenses can be very expensive, as the punishment includes fines starting at $750 for a single incident and going up to $150,000 and other penalties. Even if an association gets a vendor to set up the movie night or DJ, the association could still be held liable for copyright infringement if the vendor fails to get the appropriate licenses. Given the potential liability here, it is wise to pay the more manageable licensing fees as a cost of doing business, rather than taking the chance of getting caught infringing on an existing copyright.

Keep this in mind while engaging in your planning, knowing that if your association chooses to hire a vendor, you need to review the vendor’s contract closely to ensure that they are obligated to get the licenses and, if they do not, that the association is protected. Of course, we recommend that you have an attorney assist in the review of the contract, well in advance of signing it, to make sure everything is adequately covered. If the association is going to be responsible for setting up the movies and music, make sure that it gets the right licenses. Pay attention to the terms of the licenses that the association considers obtaining to make sure the terms of the license fit the association’s intended use. Again, an attorney with experience in this area should be able to assist you with determining if the license suits your needs.

By: Amy H. Bray, partner in our Commercial Real Estate Department