The Homeowners’ Energy Policy Statement Act: 5 Things Every Illinois HOA Needs to Know to Avoid Liability related to Solar Panel Installations

The Homeowners’ Energy Policy Statement Act: 5 Things Every Illinois HOA Needs to Know to Avoid Liability related to Solar Panel Installations

The Illinois Homeowners’ Energy Policy Statement Act, 765 ILCS 165/1, et seq., governs the installation of solar panels in Illinois homeowners associations, common interest community associations, and condominium associations.  This article will provide critical guidance to community association board members on how to comply with the Homeowners Energy Policy Statement Act and adopt a solar energy policy to avoid potential liability.

Can Illinois community associations ban solar panels?

The Homeowners’ Energy Policy Statement Act forbids Illinois community associations, which are subject to the Act, from completely banning solar panels.  Specifically, 765 ILCS 165/15 states, “Notwithstanding any provision of this Act or other provision of law, the adoption of a bylaw or exercise of any power by the governing entity of a homeowners’ association, common interest community association, or condominium unit owners’ association which prohibits or has the effect of prohibiting the installation of a solar energy system is expressly prohibited.”

765 ILCS 165/45 exempts community associations that have a building taller than 60 feet in height or that has a shared roof from complying with the Homeowners’ Energy Policy Statement Act.  A “shared roof” is any roof that serves more than one unit, including, but not limited to, a contiguous roof serving adjacent units, or is part of the common elements or common area.”  Accordingly, while compliance with the Act will be determined by the configuration of each community, the Act will likely have a much greater impact on communities subject to the Illinois Common Interest Community Association Act, which have single-family homes, as opposed to traditional attached condominiums that are created under the Illinois Condominium Property Act, which are composed of traditional attached condominium units.

Are Illinois community associations allowed to regulate solar panels?

Yes, Illinois condominium and homeowners associations may still ensure that specific requirements are satisfied related to solar panel installations.  While a community association cannot prohibit solar shingles or requires that a specific technology be used, 765 ILCS 165/20 states that in pertinent part that a community association “may determine the specific configuration of the elements of a solar energy system on a given roof face, provided that it may not prohibit elements of the system from being installed on any roof face and that any such determination may not reduce the production of the solar energy system by more than 10%.”

The Act allows community associations to adopt reasonable conditions concerning the maintenance, repair, replacement, and removal of damaged or inoperable systems if such conditions are not more onerous than the association’s analogous conditions for nonsolar projects.

Finally, 765 ILCS 165/25 requires that all solar energy systems meet applicable standards and requirements imposed by State and local permitting authorities.  Solar panels still need to be installed by a licensed professional and meet the requirements of the building code. Accordingly, Illinois community associations still have some authority to regulate solar panels to ensure that they are being installed in a safe manner and that they are being properly maintained.

Are condominium and homeowners associations required to adopt an energy policy statement?

Yes, 765 ILCS 165/20 requires all condominium associations, homeowners associations, and common interest community associations that are subject to the Act to adopt an energy policy statement within 90 days of receiving a request to do so or receiving an application from an owner to install a solar energy system.  However, nothing in the Homeowners’ Energy Policy Statement Act prohibits a community association from being proactive and adopting a policy at any time.

Under 765 ILCS 165/20, an energy policy statement must include the minimum requirements of the Act, as set forth above, and may also include the following:

(i) the location, design, and architectural requirements of solar energy systems;

(ii) whether a wind energy collection, rain water collection, or composting system is allowed, and, if so, the location, design, and architectural requirements of those systems.

A written energy policy statement may not condition approval of an application on approval by adjacent property owners. A community association may not inquire into an owner’s energy usage, impose conditions impairing the operation of a solar energy system, impose conditions negatively impacting any component industry standard warranty, or require post-installation reporting. Nor may a property owner be denied permission to install a solar energy system based on system ownership or financing method chosen by the property owner.

However, as indicated above, a community association’s energy policy statement may impose reasonable conditions concerning the maintenance, repair, replacement, and removal of damaged or inoperable systems so long as such conditions are not more onerous than the association’s analogous conditions for nonsolar projects.

Finally, 765 ILCS 165/20 also requires that a community association disclose the written energy policy statement upon request and include the energy policy statement in the declaration.  As such, a condominium association, homeowners association, or other common interest community association that is subject to the Act will need to amend their declaration, in addition to creating an energy policy, to comply with the Act.

Are owners still required to submit an application to install solar panels?

Yes, owners are still required to submit applications for approval to install solar energy systems if required by the governing documents.  However, 765 ILCS 165/30 requires a community association to make the application available in hard copy form if requested by the owner, or on the association’s website, if the association has a website.  The Homeowners’ Energy Policy Statement Act also prohibits community associations from charging a different than any other request for a modification if the association charges a fee.

A community association must process an application for a solar energy system within 30 days of the date the application is submitted.  However, if an application is submitted before a written energy policy statement is adopted, it must be processed within 120 days.  If a community association fails to adopt a written solar energy policy statement or process an application within the above time limits, the owner may proceed with the installation of the solar energy system.  However, the owner must give the community association written notice of the alleged failure and 10 business days to cure a failure to adopt an energy policy or a failure to process an application.  However, during those 10 business days, a community association may not seek injunctive relief to prevent the installation of a solar panel or otherwise penalize the owner.  Accordingly, community associations subject to the Homeowners’ Energy Policy Statement Act should proactively adopt written energy policy statements instead of waiting until an application is received.

What are the penalties for violating the Homeowners’ Energy Policy Statement Act?

765 ILCS 165/35 states that a community association that willfully violates the Homeowners’ Energy Policy Statement Act may be liable for actual damages and any consequential damages to a person who applied to install a solar energy system.  765 ILCS 165/40 also states that in “any litigation arising under this Act or involving the application of this Act, the prevailing party shall be entitled to costs and reasonable attorney’s fees.”

Final Tips for Complying with the Homeowners’ Energy Policy Statement Act

The Homeowners’ Energy Policy Statement Act certainly creates new challenges for Illinois condominium and homeowners associations.  Community associations should consult with an attorney to determine whether they are subject to the Act based on the configuration of their project.  If a community association is subject to the Homeowners’ Energy Policy Statement Act, it should collaborate with an attorney to adopt an energy policy statement, amend the declaration, and implement procedures that comply with the Act to process requests for solar energy systems from owners.  Given the potential penalties and award of attorney’s fees for a violation of the Act, it is important for Illinois community associations to be proactive in complying with the Homeowners’ Energy Policy Statement Act.

Kevin Hirzel is the Managing Member of Hirzel Law, PLC. Mr. Hirzel is licensed to practice law in state and federal courts in Illinois. He concentrates his practice on community association law, condominium law, homeowners association law, and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. Mr. Hirzel has been recognized as a Super Lawyer in Real Estate Law by Super Lawyers Magazine, a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine, and as a Best Lawyer in Real Estate Law by U.S News and World Report’s Best Lawyers Publication. Hirzel Law, PLC represents community associations, condominium associations, cooperatives, and homeowners associations in Michigan and Illinois. He may be reached at 312-552-7669 or kevin@hirzellaw.com.