The Arizona Daily Star recently ran an article regarding a planned community in Tucson that requires its homeowners to pay $500 to have the planned community’s architect review solar panel installation plans prior to the solar panels being installed on an owner’s single family residence within the community association. Can the community association legally charge a homeowner this fee for solar panel installations? The Arizona courts have not yet decided this specific question, however, pursuant to the laws outlined below, it is my opinion that a court in Arizona could determine that this fee “adversely affects the cost” of the device and is therefore not allowed.
When advising community associations on the laws pertaining to solar energy devices in Arizona, I want my clients to first understand that Arizona law favors the use and enjoyment of solar energy devices by owners in community associations. As such, prior to making any decisions to deny on a solar panel request from a homeowner and prior to implementing procedures regarding solar panel installations, such as a $500 review fee, I would advise the Association to contact legal counsel.
Arizona law, specifically, ARS §33-1816, addresses installation of solar panels or solar energy devices in a planned community and provides:
A. Notwithstanding any provision in the community documents, an association shall not prohibit the installation or use of a solar energy device as defined in section 44-1761.
1. An association may adopt reasonable rules regarding the placement of a solar energy device if those rules do not prevent the installation, impair the functioning of the device or restrict its use or adversely affect the cost or efficiency of the device.
2. Notwithstanding any provision of the community documents, the court shall award reasonable attorney fees and costs to any party who substantially prevails in an action against the board of directors of the association for a violation of this section.
As such, a planned community may not prohibit the installation or use of solar panels on an owner’s single family residence. While the planned community may adopt reasonable rules regarding the placement of the solar energy device, the rules cannot prevent the installation, impair the functioning of the device, restrict its use or adversely affect the cost or efficiency of the device.
Further, pursuant to ARS §33-439, which applies to both condominiums and planned communities, an association’s Declaration, or other association documents (such as architectural review committee guidelines and rules and regulations, etc.) cannot “effectively prohibit” the installation or use of a solar energy device.
On February 25, 2003, the Arizona Court of Appeals, Division One, issued an opinion in Garden Lakes Community Association, Inc. v. Madigan/Speak (393 Ariz. Adv. Rep. 9) that interprets ARS § 33-439. In that case, the Court held that whether or not restrictions in association documents (such as CC&Rs, architectural review committee guidelines, rules and regulations, et.) “effectively prohibit” solar energy devices is a question of fact to be decided on a case-by-case basis. The Court provided general guidelines to trial courts and parties involved in or anticipating litigation over restrictions affecting solar energy devices. The Court stated that in determining whether a deed restriction effectively prohibits the installation or use of a solar energy device numerous factors may be relevant:
- The content and language of an association’s Declaration, restrictions or guidelines;
- The conduct of the homeowners association in interpreting and applying the restrictions;
- Whether the architectural requirements are too restrictive to allow solar energy devices as a practical matter;
- Whether feasible alternatives utilizing solar energy are available;
- Whether any alternative design will be comparable in cost and performance;
- The feasibility of making the required modifications;
- The extent to which the property at issue is amenable to the required changes;
- Whether decisions previously made by the homeowner or a prior owner are responsible for limiting and precluding the installation of solar energy devices rather than the restrictions themselves;
- The location, type of housing, and value of the homes in the community; and
- Whether the restrictions impose too great a cost in relation to what typical homeowners in the community are willing to spend (however, the Court emphasized that cost alone should not be dispositive).
In summary, ARS §33-439 and the ruling in the Garden Lakes case does not eliminate the power of a homeowners association to impose aesthetic and architectural restrictions on the installation and use of solar energy devices. However, solar energy devices may not be “explicitly prohibited” or “effectively prohibited” by the guidelines of an association or by an association’s interpretation and application of its guidelines.
Takeaway: Consult your attorney prior to denying a solar energy device application or implementing guidelines regarding the installation and use of solar energy devices. For additional information on solar panels, please see our firm’s cheat sheet titled, Solar Panels & Creating a “Green” Community.