Landlords have access to an extraordinary amount of data. Building keycard systems accurately track when tenants enter a building or access specific amenities. Parcel lockers monitor the volume and frequency of package deliveries. And “smart home” devices provide detailed insight into tenants’ utilities usage and other behavior. When handled with care, these types of data can be used not only to guide day-to-day property management decisions, but also to generate an additional revenue stream. Prospective data buyers include hedge funds researching industry trends, advertisers seeking to understand building demographics, and third-party data brokers simply looking to grow their data sets. Before monetizing such data, however, it is important to understand the legal landscape governing such sales. Consider asking two key questions: First, can you sell your tenants’ data? And second, should you sell that data?
The collection, use and disclosure of data are subject to a complex patchwork of privacy restrictions, including federal and state laws, international regulations and contractual requirements. Any landlord considering selling data should work with experienced counsel to understand and proactively address potential restrictions well in advance of any data sales. Here are five frequent areas of risk exposure to keep in mind:
Landlords that do not comply with applicable legal or contractual requirements risk regulatory penalties including fines and injunctive relief, litigation costs and reputational damage. Careful planning can help landlords to preserve and capitalize on the value of their data assets.
The fact that you can sell your tenants’ data does not mean you should sell that data. Journalists and consumer advocates are quick to criticize companies who use data for unexpected purposes, and privacy is paramount in assessing when and how to sell data. Consider structuring any data sales to remove personally identifiable information or otherwise proactively protect your tenants’ privacy.
Tenant data may be an attractive source of new revenue, but landlords should proceed with caution. Careful planning can help to address privacy concerns in advance so data assets do not also become a liability.