Legal implications of AI in condo management

Contractual agreements, privacy, liability and accuracy, and algorithmic bias
Wednesday, July 19, 2023
By Laura Gurr

The use of Artificial Intelligence (AI) tools, like ChatGPT, is becoming more commonplace, and this emerging technology is likely to continue to evolve and embed itself in business practices.

AI in condominium property management can have several legal implications, depending on how it is implemented and used. Here are some important legal considerations:

Privacy and data protection

Managers and management companies have an obligation to ensure that appropriate measures are in place to safeguard the privacy and security of personal data. This includes ensuring protection is in place when using AI technology tools. For example, ChatGPT’s terms of service permit it to share and store the information and data input into the platform. In so doing, the manager may be breaching contractual obligations, internal policies and procedures, and/or privacy legislation.

When using ChatGPT for business purposes, managers should not input any confidential or personal information as this could constitute breach of data protected by law (personal information or information that is privileged in other ways under specific laws, such as personal medical or banking information).

Contractual agreements

If you plan to integrate AI tools into your condominium management services, it is essential to review and update your contractual agreements with corporations, owners, residents, and other stakeholders. You should clearly define the scope and purpose of the use of AI technology, data handling practices, and any implications on individual rights and obligations.

Privacy policies should also be updated and managers should clearly communicate to owners, residents, and stakeholders that they are interacting with an AI system and how the information will be collected, used, and stored. Provide transparency about the capabilities and limitations of AI systems to manage expectations and avoid any potential confusion or misrepresentation.

Liability and accuracy

AI tools can provide automated responses based on training data and algorithms. While it can be helpful, it may not always provide accurate or reliable information. Property management companies should be cautious about relying solely on AI for important decisions or legal advice. It is crucial to ensure the accuracy and suitability of information provided by tools like ChatGPT and, if necessary, involve human oversight or verification.

For example, a manager may want to use ChatGPT to draft a letter to a unit owner to respond to a question or concern that the owner has raised. The manager can use a prompt such as:

“draft a brief e-mail to [condominium unit owner] responding to complaint about noise from neighbouring unit from a party at 3 a.m. on a long weekend” or

“draft an empathetic letter to [condominium unit owner] responding to request for human rights accommodation for an accessible parking space and request further medical information”

While tools like ChatGPT can assist with drafting language for a letter, the AI tool is of limited value and the manager must ensure the accuracy and suitability of information provided.

Condominium managers in Ontario must be licensed and comply with the CMRAO’s Code of Ethics; this professional responsibility cannot be outsourced to AI tools. Additionally, AI tools like ChatGPT should never be used to provide legal advice, as legal issues are highly nuanced and fact specific.

Discrimination and algorithmic bias

Condominium managers must be aware of human rights laws and regulations that prohibit discrimination. Unfortunately, training data and algorithms used by AI tools can inadvertently perpetuate discriminatory practices or bias due to various factors.

First, if the training data used to train an AI system like ChatGPT is not diverse and representative, it may reflect existing societal biases or disparities. If the data predominantly includes certain demographic groups or contains inherent biases, the system may learn and replicate those biases in its responses. Second, biases can emerge if the training data reflects historical or systemic discrimination, leading the AI system to inadvertently perpetuate discriminatory patterns.

Additionally, algorithmic bias can arise if the training process or algorithms inadvertently amplify certain patterns or make erroneous associations between protected characteristics and certain behaviours. These biases can manifest in the system’s responses and decision-making processes, potentially resulting in unfair treatment or discrimination.

It is crucial for the companies designing AI tools to carefully design the them to recognize and mitigate these risks and to curate training data. Ultimately, if managers are going to leverage these AI tools, it is important for users to acknowledge this systemic bias and employ bias mitigation techniques and conduct regular monitoring and testing to mitigate and rectify any biases that may arise from the algorithms.

Bottom Line: AI tools can be useful for condo managers, but there are important legal considerations that need to be addressed to protect managers, condo corporations, and owners.

If you have further questions, it is important to consult with legal professionals who specialize in privacy, data protection, and condominium law to assess and address the specific legal implications of using AI tools in condominium property management.

Laura is a managing partner with Cohen Highley LLP and is part of the multi-residential housing group. Her practice focuses on condominium law, acting for condominium corporations, property managers, and developers in a broad range of litigation, operational and governance matters. Laura is actively involved in the condominium and multi-residential housing industry. She regularly writes and speaks about legal issues affecting the industry. Since 2014, Laura has been a board member of the Canadian Condominium Institute (London Chapter) and on the board of directors for Homes Unlimited (London) Inc.

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