Colorado Real Estate Journal - December 2, 2015
Pick up the newspaper or visit your favorite news website on any given day and there will be a drone story – good or bad. From drones being used beneficially for search and rescue purposes to drones being used irresponsibly to interfere with firefighting operations, what once seemed the stuff of science fiction is quickly becoming part of everyday life. The commercial use of drones, also referred to as unmanned aircraft systems, is soaring with potential applications seemingly limited only by the user’s imagination and current regulations. The construction industry has been an early adopter of UAS with companies such as Bechtel, and Burns & McDonnell moving quickly to identify opportunities to integrate drones into their projects. Companies of all sizes are quickly recognizing that drones can be used to save time and money and improve worker safety. Proven applications include: 3-D site surveying and mapping; collection of real-time construction progress data and imagery; weekly or even daily site maps to coordinate material deliveries, equipment movement and subcontractor activities; inspections of complex or hard-to-reach structures; worker safety audits; and project closeout photography – to list just a few. To realize the full potential of drones as construction tools, an understanding of the existing and evolving federal and state regulatory framework is essential. The first step is to understand that, under federal law unmanned aircraft are just that, aircraft, and appropriate authority is required before operating them commercially in the National Airspace, which the Federal Aviation Administration regulates from the ground up. Under current law, the most common form of approval to operate a small UAS (sUAS) (i.e., one weighing 55 pounds or less) for commercial purposes is to obtain an exemption under Section 333 of the 2012 FAA Modernization and Reform Act, which directed the FAA to establish rules for integrating sUAS into the National Airspace. In general, a Section 333 e x e m p t i o n requires information concerning the specific UAS to be used, a description of how the UAS will be used, a discussion of the specific FAA regulations from which an exemption is sought, and an explanation of how and why the exemption will not harm public safety. If granted, the exemption will include several conditions and limitations on UAS operations, including: the UAS may not fly higher than 400 feet above ground level (AGL); it must be flown only during daylight hours; it must remain within the unaided visual line of sight (VLOS) of the operator at all times; it may not fly within five miles of an airport and must remain clear of manned aircraft; it may not fly over people not involved in the UAS operation; and it must be flown by a licensed pilot. In addition to the Section 333 exemption, the company must also obtain a Certificate of Waiver or Authorization, which coordinates the UAS operation with local air traffic control authorities. A “blanket” COA is issued with the exemption allowing UAS operations up to 200 feet AGL anywhere in the United States not otherwise prohibited. For operations above 200 feet AGL, a specific COA must be obtained. While these conditions and limitations may seem burdensome for some commercial applications, arguably they pose less of a burden for construction applications. For example, the 200-foot AGL limit may be sufficient for many construction projects. Where a higher operational altitude is required, the need for a site-specific COA can be factored into the project plan and is likely to be readily granted given that the project site already involves significant vertical structures such as cranes and the building itself, which manned aircraft must avoid. The VLOS requirement also presents less of a challenge given that UAS operations are confined to the project site and the drone can be operated safely around structures by coordination between the UAS pilot and the visual observer required under the current rules. As of Nov. 6, 2,213 Section 333 exemptions have been granted for commercial operations in a wide variety of industries. Of the first 1,000 exemptions issued, 134 were to construction companies or construction industry service providers. These numbers are likely to increase in 2016 when the FAA is expected to issue its final rules for the “Operation and Certification of Small Unmanned Aircraft Systems.” The proposed rules are expected to allow sUAS operations up to 500 feet AGL and will no longer require a pilot's license but rather a UAS operator certification. These and other aspects of the proposed rules are expected to make commercial sUAS operations more accessible, more quickly. As the federal regulatory framework is taking shape with a particular focus on safety, state laws are rapidly adapting to this new technology with a particular focus on property rights and privacy issues. According to the National Conference of State Legislatures, 45 states have considered 168 drone-related bills in 2015 alone (including two in Colorado), and 20 states have enacted some form of drone-related legislation. Property rights issues related to drones center on the extent of a landowner’s rights in the airspace above his or her property. In the 1946 case of Causby v. United States, the U.S. Supreme Court stated, “The landowner owns at least as much of the airspace above the ground as he can occupy or use in connection with the land.” The court, however, declined to establish a specific altitude for the extent of the landowner’s rights, thus leaving this question for a case-by-case, factual determination by the courts or definition by state law. While this uncertainty may be problematic for companies planning to use drones for delivery of various consumer purchases, it is less of an issue on construction projects where the drone flight will be limited to the project site, which the company controls. Drone-related privacy issues focus generally on an individual’s reasonable expectation of privacy. Again, this is less of an issue on a construction site where anyone present is likely to be involved in the project, but could be more of an issue when drones are used for inspection of existing buildings and infrastructure. In such situations, the drone could gather, or be perceived to be gathering, images and information about persons, structures and activities on adjacent properties. Construction companies should appreciate these potential privacy concerns and establish UAS operational protocols to control and document the purpose of each UAS flight. It is important to recognize that legislation related to property rights and privacy issues may vary from state to state, and is increasingly becoming the subject of local government ordinances as well. Construction companies are well advised to stay informed of state and local UAS regulations in the location of each project. Finally, there are numerous business issues that construction companies must consider when integrating drones into their operations. For example, do not assume that your commercial general liability policy covers sUAS operations; it probably does not. A growing number of insurers, however, now offer UAS-specific policies. Also, do not overlook intellectual property issues. Who owns drone-gathered project data – the construction company or the ultimate project owner? The issue becomes more complicated when the company is contracting with a vendor for drone services. Construction companies must carefully consider these and other risk management and practical issues related to sUAS operations. Construction companies wanting to realize the full potential of drones must carefully monitor the evolving federal, state and local UAS regulations, and put in place practices and procedures to ensure compliance and minimize risks just as they do with many other aspects of their business. If they do, and if recent experience is an indication of what the future holds, drones may become as common and ubiquitous on construction sites as hard hats and cranes.