We are actually doing this with various housing providers across the UK at the moment.
Basically, the HA's we work with have gone for a fully managed solution from us at CommunityUK that takes care of all these issues for you.
I would be more than happy to discuss with you how we and the HA's are approaching these issues in more depth - Feel free to contact me directly at firstname.lastname@example.org.
the law in question is primarily the Digital Economy Act 2010
Ideally, a proper wifi 'hotspot' kit, that logs when people are using it - for more info, Solwise (www.solwise.co.uk) have a white paper that explains the issues nicely - its actually aimed at holiday parks, but the principles are the same; also Hotaxe (www.hotaxe.co.uk) also explain more breifly. Both companies sell the kit too.
As far as I know, this hasn't yet made it to a court of law in the UK, which is why advice can be a bit vague - until someone is prosecuted, the law is untested and no precedent has been established.
I'm not sure if the EU ruling on retaining user data is relevant, as it was only ruled this week and the knock-on hasn't filtered through yet.
I'd have a read of the Solwise paper, then do a risk assessment (best way to do this I find is to apply a Daily Mail headline to the issue - in this case, something like, community centre wifi used to download porn or community centre faces £££ internet bill after local users use wifi to bit torrent pirate videos)
hope I haven't scared you off!
You may find this information useful which is legal guidance provided to the HE/FE sector on computer misuse - much should be applicable in other areas too.
Thanks James - will have a read!