Smile. You're on Candid Camera. Wait, no, Ring.
If you like a good comeback story, Jaimie Siminoff is your guy.
Jaimie spent a lot of time in his garage, and it was there one day that an idea was formed. Was it possible to see a delivery person at the front door while he was in the garage? It occurred to him that a doorbell could go to his phone. And that's when a Wi-Fi enabled video doorbell business was spawned.
Jaimee told an interviewer that he drove from his garage, went on the Shark Tank, and drove back to his garage empty-handed and hugely disappointed. Determined to succeed, he bounced back from this extremely low point, walking out of the Shark Tank and straight to the bank. He would sell his company Ring to Amazon for more than $1 billion.
Having been unable to strike a deal with the sharks, Jaimie would later return to the tank, but this time, he was a guest shark.
Solving simple problems can create billion-dollar ideas. They can also stir up legal quandaries.
Safer neighborhoods, together?
This is the first tagline you see when visiting Ring's home page. Certainly, there is some value in installing these types of smart doorbells, cameras, alarms, lighting devices, and other accessories. Tenants and landlords get peace of mind knowing that the building is safer, and this can be especially appealing to young renters who are constantly interacting with their smartphones.
Kevin O'Leary, known reverently as “Mr. Wonderful,” was asked in a CNBC interview if he had any regrets about not striking a deal with the then-embryotic venture and why Amazon bought the company.
"People talk about the last mile in the Amazon delivery. I talk about the last yard. One of the biggest problems is how to get that package away from a thief and the whole idea of this product and the way people are building new homes is to put a vestibule so that you can open a first door, place the product behind, and let the homeowner come in from the other side and pick it up. Ring does this perfectly and so what I think they were doing at Amazon is trying to solve the last yard... "
In these types of egregious acts, the tenant should be served a 3-day notice to quit with no opportunity to "cure" or correct the transgression. With Ring and other products storing imagery for months, the tenant or their attorney is hard-pressed to dispute that the theft occurred.
Yet despite all of the marvels and benefits of technology, it does not come without controversies and limitations
We have to ascertain just how watchful and attuned to conversations landlords can be.
Under California law, tenants have a reasonable expectation of privacy and this needs to be respected. In certain shared common areas such as a lobby, gym, pool area, hallways, storage areas, and the like, video surveillance can be installed.
We have, however, urged restraint and discretion in the installation of devices that capture video. For example, although legally permissible, we have recommended that shared kitchen areas should be off-limits. Where to draw the line is always a question best approached with an attorney.
Certainly, cameras can be installed outside the building at entryways and exits. Where it gets more concerning is when cameras begin to monitor a tenant's private life and become too invasive.
There is a famous quote by a judge who said that someone's liberty to swing their fist ends where another person's nose begins. To which we can add that the landlord's right to surveil their property ends where the tenant's rental unit begins.
For example, if a surveillance camera angle allows a full view of the apartment’s interior when the door opens, it violates the tenant's right to privacy.
Speak into the mic? We have to distinguish between video and audio
Where it gets more perilous is when audio is recorded. California's "All parties consent Statute" (Cal. Penal Code Section 632) says that anyone who willfully records or spies into a confidential communication through a telephone or recording device, without approval to do so, can be found guilty of criminally recording confidential communication.
The California Supreme Court was tasked with interpreting this law in Kearney v. Salomon Smith Barney, 39 Cal. 4th 95 (2006). It held that if the person is advised that the conversation is being recorded, the discussion does not fall within the definition of "confidential" communication and thus, does not require the express consent of the tenant. The Court's reasoning is that the statute only prohibits parties from "secretly or surreptitiously" recording the conversation without first informing all parties that the conversation is being recorded.
Enter California's "two-party consent" law which criminalizes the recording or eavesdropping of any confidential communication without the consent of all parties, and this is where we see potential liability for landlords.
Wiretapping laws define confidential communications as any in which one of the parties has an objectively reasonable expectation that no one is listening in or overhearing the conversation. Courts have ruled that this law applies to the use of hidden video cameras like Ring that is designed to record conversations, as well.
What if surveillance equipment unwittingly captures footage and audio from a neighboring property?
This was an interesting question taken on in Merzger v. Bick. The Court held that a neighbor's use of security cameras to record their yard and adjoining portions of a property owner's yard did not violate California's prohibition of confidential communications insofar as the recordings contained unintelligible words and phrases and that the conversation was spoken so loudly, that no expectation of privacy could be expected by the aggrieved neighbors.
Best practices
Whenever these newfangled devices are installed in rental properties, their location must be carefully thought out. Their video feed cannot be at an angle that peeks into a unit, and certainly not into bathroom or shower facilities. If the landlord catches a tenant in an embarrassing moment, civil and even criminal liability awaits.
There should be prominent signage alerting anyone in the watchful eye of the surveillance device that activities are being recorded, but we hasten to say that posting signs will not excuse unlawful video recording.
As for audio recordings, Ring users can disable this feature, and this is a surefire way to avoid liability. Under California's "All parties consent Statute" discussed earlier, all parties must consent and this is unwieldy in a rental housing environment with people coming and going, as opposed to consenting to a phone call being recorded.
Whoever the “wizard behind the curtain,” whether it is the landlord or the tenant who is monitoring the acoustics, everyone subject to having their conversations overheard and preserved should be informed as such. California’s highest court weighed in on this in Kearney v. Salomon Smith Barney.
An ironclad lease can prohibit tenants from installing surveillance equipment of any kind, yet a recurring theme in our practice is tenants using stale, outdated leases that do not anticipate all contingencies in the rental relationship or account for changes in the law. If this sounds like you or one of your clients, by all means, reach out to Bornstein Law to perform a checkup on whether your lease agreements are up to date.
The landlord could allow tenants to install Ring and similar devices at their discretion, but this permission should not come without carefully prescribed guidelines.
The chief concern is whether the devices will infringe on the privacy of other tenants. For instance, cameras cannot face the entrances to another residence, their parking spots, or yards. All equipment a tenant chooses to install with the landlord’s blessing must be specific to their own living quarters.
We would be remiss not to urge landlords to be careful in how they use the data, video, or audio.
It cannot be used for commercial purposes without express consent, be put on a website, used for blackmail, and so forth. If the data is obtained illegally, it can't be used for anything - it will be tossed out. Overexuberant landlords may secretly try to capture behavior that would build a case for eviction, only to find that whatever evidence gleaned is not admissible and worse, invite a lawsuit against the peeper.
Parting thoughts
In earlier posts on Airbnb and short-term rentals, we said that while it was laissez-faire with regulations and enforcement in the early going, the law would eventually catch up with technology. It did.
We are at a similar crossroads now with the privacy and civil rights concerns raised with smart doorbells and a suite of related products. While users and subscribers are instructed by companies to use the equipment lawfully, it doesn't adequately explain what the law is or isn't. Many questions and grey areas abound in this digital world.
Never letting the grass grow from underneath our feet, the landlord attorneys at Bornstein Law can provide proper counsel to think strategically about how technology is employed in and around rental units.
Don't let the use of smart devices be foolhardy.