Autonomous Vehicles: Coming to a Condominium or HOA Near You!

autonomous-vehicle-1200-x-796An autonomous vehicle, also known as a driverless car, self-driving car, or robotic car is a vehicle that senses its environment and operates without human input. On December 9, 2016, Governor Rick Snyder signed 2016 PA 332 into law and amended the Michigan Motor Vehicle Code to make Michigan the first state that allows for autonomous vehicles to be operated on a public street or highway. Michigan Senate Bill 995 amended MCL 257.2b(2) and now defines an automated motor vehicle as follows under Michigan law:

(2) “Automated motor vehicle” means a motor vehicle on which an automated driving system has been installed, either by a manufacturer of automated driving systems or an upfitter that enables the motor vehicle to be operated without any control or monitoring by a human operator. Automated motor vehicle does not include a motor vehicle enabled with 1 or more active safety systems or operator assistance systems, including, but not limited to, a system to provide electronic blind spot assistance, crash avoidance, emergency braking, parking assistance, adaptive cruise control, lane-keeping assistance, lane departure warning, or traffic jam and queuing assistance, unless 1 or more of these technologies alone or in combination with other systems enable the vehicle on which any active safety systems or operator assistance systems are installed to operate without any control or monitoring by an operator.

Similarly, on March 20, 2017, Senator Gary Peters announced that he was working on federal legislation to regulate autonomous vehicles, which are anticipated to become ubiquitous in the not so distant future, as many automakers have announced plans to introduce driverless cars to the market. By way of example, the Audi A8, which will be released later this year, will feature driverless technology. Ford intends to have a driverless car on the market no later than 2021. General Motors anticipates having an autonomous vehicle by 2020 or sooner as well. It is estimated that there will be ten (10) million self-driving automobiles on roadways by 2020 (referring to vehicles with features allowing them to accelerate, brake, and steer with limited or no driver input, categorized as fully or semi-autonomous). Accordingly, condominium and homeowner associations will have to deal with the benefits and detriments associated with autonomous vehicles in the near future and should be proactive about dealing with this technological advancement. The purpose of this article is to discuss the issues that autonomous vehicles may pose for condominium and homeowner associations in the next few years.

Can condominium associations and homeowners associations preclude co-owners from using autonomous vehicles on private roads?

MCL 257.74 of the Michigan Vehicle Code defines a street or highway that is subject to the Michigan Vehicle Code as follows: ” ‘Street or highway’ means the entire width between boundary lines of every way publicly maintained when any part thereof is open to the use of the public for purposes of vehicular travel.” Accordingly, a road that is privately maintained by a condominium association or homeowners association is not required to allow autonomous vehicle traffic. However, community associations that desire to exclude autonomous vehicle traffic on private roads would need to amend the condominium bylaws or declaration of restrictions to prohibit the use of autonomous vehicles, as most governing documents would permit the use of any type of vehicle on private roads. Accordingly, condominium and homeowner associations should review their governing documents to determine whether autonomous vehicles would be allowed on private roads, as the drafters or the documents likely did not contemplate the existence of such technology.

Should condominium associations or homeowners associations preclude co-owners from using autonomous vehicles on private roads?

Proponents of autonomous vehicles claim that they are safer and reduce human error that may cause accidents. Unlike a human driver, an autonomous vehicle would not drink and drive, text and drive or fall asleep at the wheel. Additionally, elderly co-owners that are not physically capable of driving would have increased mobility. Accordingly, there are many potential benefits to autonomous vehicles.

However, autonomous vehicles are not fool proof. One of the biggest concerns about autonomous vehicles is that ability of the vehicle to make moral choices. If a child kicked a ball into the street, would the vehicle decide to crash the car into a tree or run into the child if it was unable to stop? Moreover, an autonomous vehicle could have a software error or it is possible that the owner of an autonomous vehicle could attempt to modify the operating system in a manner that could cause it to malfunction. In fact, Michigan Senate Bill 998 amended MCL 600.2949b and specifically exempted a manufacturer and subcomponent system producer from civil liability if any of the equipment used in the vehicle for automatic mode had been modified. Accordingly, given that autonomous vehicles are a developing technology, it would be reasonable for a condominium or homeowner association to preclude use of autonomous vehicles until this technology is more fully developed.

For community associations that desire to allow autonomous vehicles, associations should take proper precautionary measures. First, associations should require that owners of autonomous maintain adequate insurance. In Michigan, the minimum required insurance policy only covers $20,000 for injuries or death to an individual, up to $40,000 per accident if multiple parties are injured and up to $10,000 in property damage. Accordingly, given the unknown risks involved with autonomous vehicles, community associations that allow autonomous vehicle traffic may want to amend their bylaws or create rules that requiring higher insurance coverage in the event that damage to person or property occurs on common elements and also require co-owners to provide proof of insurance. Second, while not currently required, the association may also want to mandate regular safety inspections as a condition of autonomous vehicle use. Finally, associations should review their current bylaws to ensure that appropriate indemnification provisions are in place in the event that a co-owner’s autonomous vehicles causes damage to the common elements.

What impact will autonomous vehicles have on parking in community associations?

One of the touted benefits of autonomous vehicles is that it will reduce the need for parking in urban areas, where parking is often a premium. In short, co-owners will no longer need to be within walking distance of a car if the car is capable of parking itself and later picking up the co-owner. It is estimated that the need for parking space should decline more than 5.7 billion square meters as a result of driverless cars by 2035. Experts speculate that individual car ownership will eventually become a thing of the past, and that individuals will purchase a subscription service or buy into a “cardominium” where an autonomous vehicle, that no longer needs to be parked on-site, will arrive and take an individual to their desired destination.

For condominiums that are located in densely populated urban areas, on-site parking spaces are currently sold between co-owners at premium rates. In most cases, on-site parking spaces are limited common elements that are associated with an individual unit. The Michigan Condominium Act, specifically MCL 559.139, allows for limited common element parking spaces to be transferred as follows:

(1) Assignments and reassignments of limited common elements shall be reflected by the original master deed or an amendment to the master deed. A limited common element shall not be assigned or reassigned except in accordance with this act and the condominium documents.

(2) Unless expressly prohibited by the condominium documents, a limited common element may be reassigned upon written application of the co-owners concerned to the principal officer of the association of co-owners or to other persons as the condominium documents may specify. The officer or persons to whom the application is duly made shall promptly prepare and execute an amendment to the master deed reassigning all rights and obligations with respect to the limited common element involved. The amendment shall be delivered to the co-owners of the condominium units concerned upon payment by them of all reasonable costs for the preparation and recording of the amendment to the master deed.

(3) A common element not previously assigned as a limited common element shall be so assigned only in pursuance of the provisions of the condominium documents and of this act. The amendment to the master deed making the assignment shall be prepared and executed by the principal officer of the association of co-owners or by other persons as the condominium documents specify.

While autonomous vehicles will likely decrease the value of on-site limited common element parking spaces, autonomous vehicles may also help solve parking problems for condominium associations that do not have sufficient parking. By way of example, MCL 559.136 allows for common elements to be added to a condominium as follows:

The master deed may provide that undivided interests in land may be added to the condominium project as common elements in which land the co-owners may be tenants in common, joint tenants, or life tenants with other persons. A condominium unit shall not be situated on the lands. The master deed, or any amendment to master deed under which the land is submitted to the condominium project shall include a legal description thereof and shall describe the nature of the co-owners’ estate therein.

Accordingly, if a condominium association that had insufficient parking desired to purchase a vacant lot that was 10 miles away and add the land to the condominium as general common elements, or add limited common element parking spaces on the land, it may be able to do so in order to alleviate a parking problem. Accordingly, autonomous vehicles may revolutionize the manner in which condominium associations think about parking.

Conclusion

The technological advancements in autonomous vehicles will likely create new issues related to liability, insurance and parking for condominium and homeowner associations to consider. As with any new technology, the law is typically slow to evolve and the regulation of autonomous vehicles in community associations will largely be dependent on the governing documents. Given that an ounce of prevention is worth a pound of cure, condominium and homeowner associations should be proactive in amending their governing documents and making decisions about whether to allow autonomous vehicles and what conditions to impose on autonomous vehicle use before problems arise in the next couple of years. Additionally, community associations that have parking issues may want to consider the possibility of acquiring additional land or planning to re-develop unused parking spaces in the future.

Kevin Hirzel is a Partner at Cummings, McClorey, Davis & Acho, P.L.C. and leads the Community Association Practice Group. Mr. Hirzel can be contacted at (734) 261-2400 or khirzel@cmda-law.com. Please view The Michigan Community Association Law Blog at http://micondolaw.com for additional resources on Michigan Community Association Law.