As California moves closer to banning natural gas installations for new homes and the state’s subsidies for solar, more and more condo owners want to take advantage of rooftop solar. Due to the increasingly hotter climate, California has been a leader in solar energy. But, as we know, new tech is most times met with resistance on the local level and by lobbyist groups for carbon-based energy.
California’s Solar Rights Act – University of San Diego
In 1978, California began legislating civil codes to govern how condo owners and their HOA boards can proceed with solar installations.
Here are the key codes you will want to reference before going in front of your HOA board and installing solar.
Calif. Civil Code § 714(a) of the Sterling-Davis 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.”
- Under Civil Code Section 714(e) (2)(b), if a homeowner’s application is not approved or denied within 45 days (assuming there are no pending unanswered questions), the installation is deemed “approved”.
- Code compliance: Civil Code Section 714(c) allows HOA rules to require compliance with health and safety and electrical codes.
- Roof repair: The HOA may require that the applicant pay for roof component damage from the installation and ongoing use of the system, per Civil Code Section 714.1(a).
- This also may include the extra cost of removing the system when the roof needs maintenance or replacement.
- Common-area roofs: If the installation is in a condominium, in which the roof is a normally common area owned in common by all owners,
Civil Code Section 4746 allows applicants to be required to submit a “solar site survey” plan and to notify other owners in the same building.
- A solar site survey is an inspection of a property where solar panels are going to be installed, typically occurring after a sale has been closed.
- The purpose of a site survey is to ensure the preliminary design is feasible to create a permit-ready plan.
- The solar site survey plan will be quite simple if the system is only to be installed on a roof or carport serving a single residence, but a multistory, apartment-style condominium building will need a more sophisticated plan showing that the applicant is proposing only to use his fair share of the usable space on the shared common roof.
- Recordable agreement: HOAs under Civil Code Section 4746(b) can require that the future owner of the applicant’s unit be notified of the ongoing obligations regarding the system installed on a common-area roof.
- This is normally accomplished by a written agreement stating the required conditions that are filed with the county registrar/ recorder (“recorded”) on the unit in the same building. This also automatically will notify later unit owners that they are bound by the agreement.
- Insurance: If the system is to be installed on a common area roof, the HOA can require proof of insurance (Civil Code Section 4746(a)(2)), which is annually updated to the HOA.
- Many solar companies offer to install solar systems under a lease.
- The installation of a leased system on common-area roofs creates future problems for the HOA and for subsequent unit owners; since the leasing company is not subject to the HOA governing documents.
- After installing their system, leasing companies often sell the lease to finance companies. If the unit sells, the leasing company “may” consent to the new lessee.
- “Many” (legal disclaimer) solar lease companies’ fees are “front-loaded”and many (legal disclaimer) solar companies make higher profits from the high costs of installations than servicing a long-term solar equipment lease.
- In reality, leasing companies rarely consent to another owner assuming a solar lease. The unit’s seller will be liable for the cost of the lease if the buyer does not assume that liability.
As per Fannie Mae Lending Guidelines.
- “If a homeowner OWNS their solar panels, the new mortgage (buyer’s) lender treats them as real property, that is, as part of the home — which means the panel can be valued in the appraisal.
- In the case of a solar lease (which is always secured by a lien against the property) the lease MUST BE PAID OFF before lenders will allow the incoming home buyer to record a new (1st TD) loan.
Most HOAs Do Not Allow for Leased Solar Installations
- There is nothing in the state’s applicable solar statutes that requires any HOA to allow leased solar systems to be installed upon common area roofs.
- The potential problems for the HOA and future owners can be prevented by not permitting leased equipment to be installed upon common area roofs.
Please be advised this post is for general information and any specific questions should be directed to a licensed attorney.
How to find a solar panel company?
There are many solar panel companies advertising their service right now. Some companies specialize in panels as well as roofing companies adding solar as an option and big-box home improvement stores. It’s important to consider both price and expertise when choosing a contractor to install the panels. You should read reviews and get referrals before making a final decision.
How long will the panels last?
Solar panels are typically guaranteed to last 20-30 years. The amount of energy generated will decrease over time and you should choose a warranty that guarantees the amount of energy over the life of the panels.
Solar panels can offer significant energy savings and lessen your reliance on shifting prices. A solar system is also a large expense, so before purchasing or leasing a system, do your due diligence and learn your options.
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