Associations Must Embrace Clean Energy

From electric vehicle charging stations to solar panels, alternative energy is impacting our communities. 

Americans, and Californians specifically, have been embracing clean energy for years. California boasts about 50% of the nation’s solar generating capacity, and recently became the first state to require solar panels on all new homes, effective beginning 2020. Electric vehicle sales now represent 6.2% of new car sales in California, up over 40% since 2016. And what’s not to love about clean energy – it saves money, resources and it’s good for the environment. It was only a matter of time before California lawmakers addressed the installation of clean energy improvements within common interest development communities. From solar panel systems to electric vehicle charging stations, over the past several years new laws have been enacted that prohibit Associations from strictly denying the installation of these clean energy options, even on Association common area property.

Solar Panels

Civil Code §714, which went into effect January 1, 2015, nullified any Association governing document provision prohibiting or unreasonably restricting the installation of solar panel systems within Homeowners Associations in the state of California, but this legislation was specifically directed at single-family home communities and owners’ rights to install solar systems on their personal property. Civil Code §7406, which went into effect January 1, 2018, goes even further to extend an owner’s right to install solar systems to common area roofs and carports, posing a significant deviation in common interest development property rights. Civil Code §7406 clears the way for owners to install solar panels on their exclusive use rooftop, garage or carport, while at the same time also making it feasible for owners to pursue the installation of solar panels on common area shared roofs, with reasonable conditions of approval.

As it relates to the installation of solar panel systems on Association common area property, the law specifically provides for reasonable guidelines to protect the Association and its members, and ensure equitable use of common area property, including the following:

▪ the proposed system must meet all applicable building codes, and be approved and permitted by the respective municipalities;

▪ the Association must approve the system in advance of installation, which cannot be unreasonably denied;

▪ the Association may require written indemnification from both the installer and the owner;

▪ the owner must notify each owner in the building impacted of their intent to install the system;

▪ the Association may require specific maintenance, repair and replacement provisions related to the impacted roofs and other common area elements;

▪ the Association has the right to require the owner have a site survey prepared to demonstrate that the installation of the system will provide an equitable allocation of usable common area for all other owners sharing the same common area, who may wish to install similar solar systems now or in the future;

▪ the owner and each successive owner must maintain liability insurance coverage, naming the Association as additionally insured; and

▪the owner must disclose to all potential buyers the existence of the system and all associated responsibilities to maintain not only the system itself, but Association common area impacted by the system.

In addition to these provisions provided for under the statute, we also recommend that the Association’s attorney draft a covenant related to the owner’s ongoing insurance and maintenance obligations, which can be recorded against the property, ensuring that the installing owner and subsequent owners are aware of their obligations.

Electric Vehicle Charging Stations

Beginning in January, 2012, Civil Code §4745(a) was introduced, deeming any Association governing document restriction that prohibits or unreasonably restricts the installation of electrical vehicle (“EV”) charging stations void and unenforceable. That said, much like the laws governing the installation of solar panel systems, Associations may implement reasonable conditions that protect the Association’s common areas and its members. In fact, an owner may only install an EV charging station in their exclusive use parking space, or an alternative common area space if it is not feasible to install the station in their exclusive use space, if they meet applicable health and safety standards, obtain all of the necessary municipal approvals and permits, and agree to the following conditions in writing (see Civil Code §4745(f)(1)):

▪ the installation must comply with the Association’s existing architectural standards;
▪ the installation must be performed by a properly licensed and insured contractor;
▪ within 14 days of approval, the installing owner must provide proof of insurance, naming the Association as additionally insured on their homeowners policy; and
▪ the owner must pay for all applicable utility costs associated with the EV charging station. In addition, we recommend that the Association’s attorney draft covenant, signed by the owner and recorded against the property, outlining the owner’s responsibilities pursuant to Civil Code §4745(f)(2), which include the following:

▪ the owner is responsible for damage to the station itself, as well as damage to common areas and exclusive use common areas resulting from the installation, maintenance, removal or replacement of the EV charging station;

▪ the owner is responsible for all system maintenance, repair and replacement obligations;

▪ the owner is obligated to disclose the existence of the EV charging station to potential buyers, including all associated responsibilities and obligations (by recording an executed covenant against the property, the Association can be certain any subsequent owner is aware of their obligations); and

▪ the owner must maintain an umbrella liability coverage policy of at least one million dollars ($1,000,000) naming the Association as additionally insured.

Please note, both solar panel architectural applications and electrical vehicle car charging station applications have specific civil code requirements for review periods, which supersede any Association governing document review requirements. Associations must review and render a decision within 45 days for solar panel applications, and 60 days for EV car charging station applications, or the applications will automatically be deemed approved.

Given the specific statutes impacting an Association’s rights to require reasonable conditions of approval for solar panels and EV charging stations, we recommend that Boards adopt separate policies, or amend the Association’s existing architectural guidelines, detailing the Association’s general conditions of approval for each respective improvement. Furthermore, we recommend that these guidelines include a draft covenant, prepared by the Association’s attorney, which must be executed and recorded against the owner’s property. This will ensure that owners have a clear understanding of the Association general guidelines and conditions up front, which they may take into consideration while vetting these clean energy options.

By following these general guidelines, your Association can be certain that you’re embracing clean energy and meeting the statutory requirements, while at the same time protecting the Association and its common areas. If you have questions or additional requests for information, please feel free to e-mail Brad Watson, President of PMP, at bwatson@PMPmanage.com

Please Note: PMP is not a law firm and nothing contained in this document should be considered legal advice. Legal questions should be directed to your respective Association attorney.

 

 

 

 

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