The California Solar Rights Act (“Act”), enacted in 1978, limits the ability of governing documents and associations (“Associations”) of common interest developments to prevent the installation of solar energy systems. Specifically, California Civil Code § 714(a) of the Act prohibits any provision of the developments governing documents from “effectively prohibit[ing] or restrict[ing] the installation or use of a solar energy system.” Other subsections of the Act, in California Civil Code §§ 714 and 714.1, allow the governing documents and Associations to place and impose “reasonable restrictions” on solar energy systems.
Specifically, Subsection 714(b) defines reasonable restrictions as those that: “do not significantly increase the cost of the system or significantly decrease its efficiency or specified performance, or that allow for an alternative system of comparable cost, efficiency, and energy conversation benefits.”
Recently, effective January 1, 2014, Subsection 714(d)(B) was amended to decrease the threshold for what is considered “significant” in Subsection 714(b). This amendment changed the criteria for what is considered significant from “an amount not to exceed two thousand dollars ($2,000)” or “a decrease in system efficiency of an amount exceeding 20 percent” from the originally proposed system specifications to one thousand dollars ($1,000) and 10 percent, respectively. An affirmative statement of public policy is included in the statute, as follows: “ . . . it is the policy of the state to promote and encourage the use of solar energy systems and to remove obstacles thereto.” Cal. Civil Code § 714(b).
Section 714.1 of the Act permits Associations to impose certain restrictions on solar energy system installations despite the cost, efficiency, and comparable system criteria provided for in Section 714. Separate from the reasonable restrictions permissible under Section 714, Section 714.1 allows Associations to “impose reasonable provisions” that restrict solar energy installations in common areas.
Published case law relating to Associations imposing unreasonable restrictions on solar energy systems is limited. In the two published cases involving these sections of the Act, the courts held that when considering an Association’s compliance with the Act the inquiry is necessarily a question of fact to be considered on a case-by-case basis. See Tesoro Del Valle master Homeowners Assn. v. Griffin, 200 Cal. App. 4th 619, 630 (2011); See also Palos Verdes Homes Ass’n. v. Rodman, 182 Cal. Appl. 3d 324, 328 (1986).
Lastly, California Civil Code § 4600(a) requires a two-thirds membership approval for an Association’s grant of exclusive use of a common area to an owner, subject to certain exceptions. Associations may grant exclusive use of common areas to owners without two-thirds membership approval to, among other things, comply with governing law. Id. at Subsection 4600(b)(3)(J).
Subject to the qualifications below, Associations do not have autonomous discretionary authority to deny owner requests to install solar energy systems in common areas. California Civil Code §§ 714 and 714.1 preclude Associations from prohibiting or unreasonably restricting owners’ requests to install solar energy systems in common areas. Based on the case law noted above, courts will apply a practical and flexible standard when reviewing Associations’ decisions under these sections of the Act as to what are “reasonable” restrictions since effects will differ for the different scenarios at common interest developments.
The language contained in Sections 714 and 714.1 both require that any restrictions on the installation of solar energy systems in common interest developments are reasonable without any exclusion from this requirement for common areas. Accordingly, a prohibition on the installation of solar or restrictions that effectively prohibit owners from installing solar in common areas would be unreasonable in a situation where sufficient common area space exists for all owners to install solar. It would be against common sense and legal precedence to conclude that Associations cannot permit owners to install solar in common areas unless they obtain a two-thirds membership approval because governing law requires Associations to permit installations to the extent reasonable. No two-thirds membership approval is required related to an owner’s request to install solar in a common area since the Association’s response is subject to complying with governing law. Lastly, any doubt regarding this issue would be resolved as opined above based on the courts ability to use the public policy exception and the affirmative policy statement in the statute to require that Associations permit installations, if reasonably possible.
For instance, where statutes fall short in fully enumerating rights, or where a unique factual scenario exists not contemplated by the Legislature, courts can use a powerful tool, should they choose to do so, which is the public policy exception. In California, a court would undoubtedly take into consideration that the Legislature highlighted the importance of Section 714 by including an affirmative statement of public policy, which is usually an intentional act to provide decision-making authority in favor of the policy being espoused. Section 714’s policy statement is an exemplary provision of an affirmative statement of public policy.
The critical inquiry for an Association when presented with a request from an owner who wishes to install a solar system in a common area is to determine what is reasonable with respect to solar system installations in the common areas of its particular development. Since the Legislature placed the onus on Associations to act reasonably, in the context of solar systems in common areas, this involves taking into consideration the mechanics specific to solar and how these would be addressed in their development. For instance, an Association’s inquiry should include evaluation of whether there is enough space for everyone to install a solar system if they choose to do so now or in the future. As one possibility, in the event that every owner could install solar through the installation of carport solar arrays on a per owner basis it would likely be unreasonable to prohibit an owner’s request for such an installation.
Legislation, effective January 1, 2014, that granted owners the right to install electric vehicle charging stations in the common areas of common interest developments likely demonstrates the type of reasonable decision-making that the courts would expect of Associations with respect to solar. See California Civil Code § 4745. Section 4745 requires that owners first try to locate the charging stations on their separate property, then exclusive use common, and then a common area, if that is determined to be the only place feasible. The owner and its successors remain liable to the Association for costs for damage to the charging station, its maintenance and repair, removal, and other costs, in addition to being required to insure and indemnify the Association for damage related to the stations. Id. In the context of solar, these same types of issues would need to be considered and would likely be included in the Association’s realm of ability to impose reasonable restrictions.
Lastly, Sections 714 and 714.1 require an application for approval for the installation or use of a solar energy system to be processed and approved by Associations in the same manner as an application for approval of an architectural modification to the property and prohibits the approver from willfully avoiding or delaying approval. Existing law requires the approving entity to notify the applicant in writing within 45 days of receipt of the application if the application is denied, as specified. Any owners requesting to install solar energy systems in common areas could have a viable cause of action against the Association, subject to prevailing party attorneys’ fees, if an Association does not follow this procedure.
The opinions in this blog post are based on the law as it stands on the date indicated above.