What do housing and Beethoven have in common?
The great classical composer was the victim of music piracy – unauthorized versions of his work being circulated. In today’s legal environment, music piracy is a form of copyright infringement – and many housing properties throughout the country are the modern-day pirates.
Any time music is played in a common area – for example, a community clubhouse, sales office, fitness center, condo lobby or high-rise elevator – the property must have a license to use that music. Otherwise, it is breaking the law, which protects artists who own their music against unauthorized use.
We know this because an unnamed member of the National Association of Home Builders was hit recently with a cease-and-desist order for playing music in his apartment development without a license. The NAHB’s Multifamily Housing Council investigated on his behalf, and found the order to be legit, according to an association spokeswoman.
Indeed, the trade group was so concerned that it published a white paper called “Pay to Play?” that explains the issue and tells how to obtain a blanket license to avoid being held liable for copyright infringement. (The report can be downloaded at no charge by visiting nahb.org and searching for “music licensing.”)
Copyright owners have the right to prohibit others from publicly performing their songs. And they often do.
Remember Napster? The website allowed users to exchange music files over a common, free server without regard for copyright laws. But it was shut down after lawsuits by Metallica and Dr. Dre. Similar music platforms have been shut down under the Digital Millennium Copyright Act, which criminalizes “production and dissemination of technology, devices or services intended to circumvent measures that control access to copyrighted works.”
But residential communities, whether run by their builders or associations of owners, either don’t know the law or choose to ignore it. They do so because digital media and the web make it so simple.
“Because music is available easily over the internet through services such as Spotify, Pandora and Apple Music, it is easy to assume that it can be played wherever and whenever one wants,” according to the NAHB report.
But no matter where the music comes from – the internet, CDs or MP3 players – it can’t be replayed publically without a license. Purchasing a recording only entitles the buyer to play it privately.
Even if the music is not performed for profit or is not available to nonresidents, the property is liable. If the property provides a stereo, TV or docking station in common areas for residents to play music on, the owner is liable. Even if the property hires a band for a live performance, the community might still need a license.
Of course, musicians don’t run around the country looking for scofflaws. Instead, they hire performance rights organizations, aka PROs, to act on their behalf. These outfits not only search for cases of infringement – they work with “large networks of agents who patrol places where music is typically played,” the white paper reports – but they also grant public performance licenses and collect annual royalties.
If a PRO suspects that a property is playing music without permission, it will usually send a letter demanding that the offender stop doing so or obtain a license. “But it won’t stop there,” the NAHB warns. So if a property receives such a missive, act quickly or face the possibility of some heavy fines.
“The PROs are persistent and have the resources to bring suit, but will usually drop a claim if and when the residential community obtains a license,” the white paper states. “In addition, the PROs don’t react well to stonewalling, so failure to respond at all … can increase the adversarial nature of the communications and make it more complicated and expensive to resolve.”
Rather than wait to be caught, the NAHB says it’s a good idea to obtain a blanket license from each of the three major PROs: BMI, ASCAP and SESAC.
Another alternative is to work with a subscription-based service such as Mood Media, Cloud Cover Music and Pandora for Business. Companies like these offer large amounts of music – for a fee.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at email@example.com.