Residential communities often play music in a common area, leasing/sales office, fitness center and other locations. 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. However, most music is protected by copyright law and the use of a song or recording without the owner’s permission could be copyright infringement. It is important for single- and multifamily communities to be aware of the legal requirements when playing music on the premises.
The most common way for a residential community to steer clear of copyright infringement is to obtain a “blanket license” from each of the three major performance rights organizations: BMI, ASCAP and SESAC. A blanket license allows the community to pay an annual fee in exchange for the right to play songs covered under each PRO. It is important to note that each PRO has a different catalog of songs. As a practical matter, communities should obtain blanket licenses from all three.
The PROs are represented by large networks of agents who patrol places where music is typically performed. If a PRO suspects that a community is playing music without appropriate licensing, the PRO will typically send a letter to the property owner demanding the owner obtain a public performance license. But they won’t stop there. If you receive such a letter, act promptly to avoid costly fines.
Under certain circumstances, a residential community may be permitted to lawfully play music without a public performance license. These exceptions are limited. However, there are a number of subscription-based services, including Mood Media, Cloud Cover Music and Pandora for Business, which provide access to a large amount of music for subscribers.
Read NAHB’s report to understand more. For specific legal advice, consult your attorney.