Smart Buildings

By Matthew Nolley, Dentons Bingham Greenebaum

During a recent multi-day commercial leasing institute, a room full of real estate attorneys spent several hours discussing the various issues that are now arising with so-called “smart buildings.”

The technologies from one smart building to another can vary greatly; however, concerns regarding the implementation of these technologies are raised with even just one or two present. Below is just a partial list of some of the technologies owner/landlords are incorporating into buildings new and old:

• Active Shooter Technology
• Cleaning Robots
• Security Patrol Robots
• Distributed Antenna Systems
• Drone Delivery
• Facial Recognition/Detection
• Microbe Sensing
• Diagnostic Toilets
• Parking Management (availability and reservations)
• Proximity Services (Marketing coupled with digital signage for personal ads)
• Active Noise Cancellation
• Augmented Reality Facility Maintenance
• Connected Rodent Traps
• Destination Dispatch
• People Counting, Traffic Patterns, Space Utilization
• Smart Entry System (access control, parcel and delivery management, parking, tenant apps)
• Solar Panel Windows

These various technologies are generally considered part of the Internet of Things (IoT). IoT devices are facing scrutiny. The primary concern with IoT is security. A vulnerability in a company’s network may expose the broader network to an attack. What good is securing all company laptops if a Wi-Fi-enabled coffee maker lets attackers onto the network? 

Additionally, the use of the data these technologies collect is a concern. General, anonymous data is not typically regulated; however, anything identifiable could be. As one might expect, these technologies may be more problematic for certain tenants of buildings more than others. For example, if an owner/landlord has a government agency tenant, that agency may have serious concerns with facial recognition/detection technology. Similarly, a health services center may have hesitations of their own with the use of drones for delivery and whether patient data may be compromised. Others may just have general concerns of privacy with robots, drones, facial recognition, microbe sensing, diagnostic toilets, proximity services, augmented reality facility maintenance and others that capture data about an individual – be it health data, personal identification data, biometric data or some other data set.

These technologies raise myriad questions: Who can see the data? How is the data stored? For how long is the data stored? Is the data “anonymized”? Can data ever truly be anonymized? Can the data be sold? If it can be sold, who is it being sold to and for what purposes? What if there is a data breach? Should a waiver be signed consenting to the data collection? Is there a way to opt out of the data collection? Is simple signage regarding the presence of data collection sufficient notice? What if a person does not consent (or does not desire to consent) to the gathering of their data, but, given the location of a doctor or some other service or product they need, the person is required to enter the building?

Some states have enacted strong biometric privacy laws such as Illinois with its Biometric Privacy Act (BIPA). These laws authorize substantial statutory penalties for collecting biometric data without written consent. A facial recognition system in the wrong jurisdiction without the proper consents can be very costly. And while proximity services are considered underutilized because of the “creepiness” more than regulation, ad-tech is coming under increasing scrutiny and any form of physical tracking should be handled very carefully.

As attorneys represent their landlord and tenant clients, they should be more aware of these technologies. Inquiries should be made by tenants regarding the existence or planned implementation of these technologies in the buildings in which they operate or plan to establish a presence. Armed with that information, tenants need to consider their staffs, customers and others that may visit their offices and whether the collection of any data by the implemented technology could make employees, customers, business partners and others uncomfortable. It could have a real impact on talent acquisition and retention, customer relationships and other business dealings. If representing a landlord, attorneys should consult with their clients regarding the risks associated with using these technologies as well. Their presence could cause the landlord to lose tenants or miss out on new prospective ones. Additionally, if laws and regulations are not followed precisely, landlords may be exposed to legal liability that could impact their bottom line, their reputation and, ultimately, the success of their real estate assets.