Should condo board install fake cameras to deter car thefts?

Q: There have been some thefts from cars in the parking lot of our association. The board is considering installing “fake” security cameras in the parking lot. Are there legal concerns with this approach?

A: While “fake” security cameras may provide some degree of deterrence, installing them does expose the association to some liability. Knowing that there is a security issue, the association has a duty to take reasonable measures to protect residents and their property. By installing a fake security camera, particularly if there is a known security issue, the association is representing that there is a security measure in place (that does not actually exist). If a crime occurs in an area where a person felt secure due to the existence of the camera, the association is at risk for creating the false sense of security. Similarly there is exposure to liability if a person who was a victim of a crime in an area “monitored” by the fake camera subpoenas the video and there is none.

Some associations that install fake cameras make residents aware that the cameras are fake, so that the residents do not rely on them. However, word could be spread outside the community and defeat the purpose of the fake cameras, or unsavory residents themselves could use the information to commit crimes. There are a growing number of lawsuits finding liability for these fake cameras. Some security companies will not install them, or they require property owners to sign a disclaimer.

The practical way to mitigate the exposure here is to install real security cameras. Also, to mitigate the risk of financial loss by the association (but not the exposure) is to have good liability insurance in place. Sometimes, the association might receive a premium reduction if there are working security cameras on the property.

Like many situations in an association, the board needs to balance the deterrence factor with the potential liability for creating a false sense of security. Ultimately, we typically recommend to the boards install real security cameras that record activity, or to take other appropriate security measures.

Q: Our condo board recently participated in one of your webinars regarding Fannie Mae Reserve Funding guideline changes. But, our condo board president also heard that Fannie Mae changed their lending guidelines with respect to leasing percentages. Is that true?

A: Yes. In the March 27 CondoTalk, I discussed Fannie Mae’s recent changes concerning condominium reserve funding guidelines. But, another Fannie Mae change involves leasing percentages in a condominium association.

Under prior guidelines, many condominium associations negatively impacted their mortgage lending availability for purchasers if more than 50% of the units in the association were investor-owned or leased. In practice, lenders often referred to this as the “50% rental rule.” In March 2026, however, Fannie Mae eliminated the 50% rental rule for all established condominium associations (neither newly construction nor newly converted).

This particular change applies immediately and may reopen conventional financing options for many heavily leased condo associations. However, it is important to note that new or newly converted condo associations may still have owner-occupancy “presale” requirements. This means that Fannie Mae can still require at least 50% of units in many new projects to be sold or under contract to owner-occupants before certain investor financing is available. Even though Fannie Mae changed their lending guidelines, individual lenders may still limit acceptable rental percentages.

For condominium associations, the practical effect is high rental percentages may no longer be a primary financing obstacle. For some of the other recent Fannie Mae changes, see my prior CondoTalk article or you can check out my recent free webinar at brainyboard.com/programs/brainyboardwebinarfnma2026.

• Matthew Moodhe is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at condotalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.