Associations should consider adopting energy policies

Green, environmentally friendly, alternative energy sources are becoming increasingly popular with unit owners in associations. As such, this will update what I wrote here in 2012.

The Illinois Homeowners' Energy Policy Statement Act requires associations to adopt an energy policy statement. The energy policy statement must address the location, design and architectural requirements of solar energy systems, like solar panels. The energy policy statement must also describe whether wind energy collection systems (wind turbine), rain water collection systems and composting systems are allowed, and if so, the location, design and architectural requirements of those systems.

Most associations are governed by a declaration of covenants that prohibit an owner from installing anything on the exterior of the building or in common areas without the approval of the board. That restriction, and the board's power to approve additions to the exterior of the buildings, is eroded when an owner desires to install a solar energy system, like solar panels. The Energy Act provides that no deed restriction, covenant or similar binding agreement can prohibit, or have the effect of prohibiting, a solar energy system from being installed on a building covered by the deed restriction, covenant or binding agreement. This would seem to raise a constitutional impairment of contract issue, but we will have to wait for a court decision for a definitive answer.

The practical impact of the Energy Act is that the board of the association cannot deny a property owner in an association permission to install a solar energy system. However, the association can determine the specific location where solar panels may be installed on the roof, within an orientation to the south or within 45 degrees east or west of due south. However, this determination cannot impair the effective operation of the solar energy system. This essentially means that the association will have to permit an owner to install, for example, solar panels on the roof of the building.

The Energy Act covers wind energy collection systems, rainwater collection systems and composting systems. Unlike a solar energy system that the association must allow, the association can adopt a policy prohibiting wind turbines, rainwater collection systems and composting bins.

The Energy Act requires the association to take specific action if an owner wants to install one of the energy systems I have described. Within 120 days after an association receives a request for a policy statement or an application from an association member, the association must adopt an energy policy statement (if it hasn't done so already). The energy policy statement must address the location, design and architectural requirements of solar energy systems. Additionally, the energy policy statement must also address whether a rainwater collection or composting system is allowed. If they are allowed (and they do not have to be), the statement must also set forth the location, design and architectural requirements of those systems. The Energy Act also requires an association to disclose its energy policy statement upon request.

Moreover, the association must also include the energy policy statement in its declaration. Literally read, associations are going to have to amend their declaration to incorporate the energy policy statement. An amendment to the declaration to conform to law can generally be adopted by the board, in a condominium or common interest community association, without unit owner approval.

An association should consider adopting and publishing an energy policy statement well before it receives an inquiry from an owner. Once an owner makes an inquiry, the clock starts running on the mandatory time period for the board to adopt the policy. Most board members would generally prefer to deal with such a technical subject without the pressure of being under the gun of a pending application and deadline. Those circumstances tend to lead to emotional, rather than properly thought out, response and policy.

The required energy statements should be drafted with the assistance of legal counsel, who should also be called upon to assist with incorporating the statement in the association's declaration.

Note that the Energy Act does not apply to any building taller than 30 feet. That will exclude many associations from its requirements.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.