Covenants Restricting Solar Panels Are Unenforceable in Texas

San Antonio HOA Lawyer Trey Wilson wrote:

Solar energy has been used by humans for thousands of years. Scientists have discovered evidence that Greeks and Romans use burning mirrors to light torches for religious purposes as early as the 3rd century B.C.

In 1977 the U.S. Department of Energy launcheed the Solar Energy Research Institute
“National Renewable Energy Laboratory,” a federal facility dedicated to harnessing power from the sun. Fortunately, San Antonio, and our very own CPS Energy are solar industry leaders.

Yet, despite the historic and modern patterns of embracing solar energy, many restrictive covenants in Texas still expressly prohibit the installation of solar panels on homes and business.

I'll admit, solar panels are ugly.
Solar energy is also a somewhat esoteric topic. But, as our population grows solar energy is becoming an essential alternative to traditional energy sources. Thus, it was time that covenants prohibiting solar energy panels were addressed. That is exactly what happended during the last Texas legislative session.

House Bill 362 was adopted on June 17, 2011, and became effective on that day. The Bill __, and provides, in relevant part:

...a property owners’ association may not include or enforce a provision in a dedicatory instrument that prohibits or restricts a property owner from installing a solar energy device.

As usual, there are certain exceptions, and there is a specific definition of "solar energy device." The effect of the law, however, is clear -- to void a provision violating the general prohibition on CCR provisions that ban the installation of a solar energy device and roofing materials that meet certain criteria.

In my opinion as a lawyer with an active HOA litigation practice, the Legislature got this one right, as this was a law whose time had come!

Commercial Tenants Should Review Restrictions Before Signing Lease

San Antonio HOA Lawyer Trey Wilson wrote:

Restrictive covenants and Property Owners Associations that enforce them are generally associated with residential communities. However, many commercial developments, including strip centers and office complexes have a condominium ownership arrangement. Even where a multi-unit commercial development is owned by a single individual or entity, there usually exist shared "common areas," available for non-exclusive use by all tenants. Frequently, these commercial developments are governed by Restrictive Covenants (or a "Declaration") which limit the types and scope of activities permitted by Owners and Tenants in the development.

Properly-recorded Restrictive Covenants usually "run-with the land" and are applicable even where a Tenant has not been provided a copy. Commercial tenants sometimes enter into leases that expressly authorize them to conduct activities or engage in practices that are prohibited by the applicable covenants. While this situation sometimes arises as the result of unscrupulous acts by a Landlord, most often, the Lessor, himself, is unaware of the language of the Declaration -- especially if the landlord is simply an investor who has never occupied the property. Imagine the surprise of the Tenant who receives notification from the POA or a neighbor that their use of the leased premises is unauthorized and/or expressly prohibited by the Declaration!

To avoid this situation, commercial interests should insist on receiving and reading a copy of all applicable Restrictions PRIOR TO entering a lease, or investing in the build-out of a commercial property. The provisions of a lease will almost NEVER trump valid Restrictive Covenants, and ignorance of the contents of the Covenants is no excuse. To be sure that the intended use is not prohibited, a wise commercial tenant will contact an experienced lawyer to review the terms of the commercial lease, and to identify any prospective problems with applicable restrictions.

Deed Restrictions -- They Aren't Always Forever !

Many, many homwoners who are disgruntled with a neighbor or with their own HOA underestimate the importance of closely reading applicable deed restrictions (CC&R's). I'm always amazed at the number of people seeking legal representation against their HOA, but who don't even have a copy of their CCRs or Association By-laws.

That's right. That small type-face, fuzzy, packet you were given at the closing upon your home is importance. Too many times, homeowners either glance over the restrictions just once at closing, or never bother to look at them at all. They then get filed away, or thrown away, with little thought. This is a mistake, though,m because the restrictions can carry tremendous implications for property values, neighnborhood regulation, and assessing the authority of your HOA Board.

In some cases, we have determined that particular CCRs have expired, or that some mandatory condition required to give them continuing force has never occured. In those instances, the restrictions are usually legal nullities that cannot be enforced. When serving as lawyers representing owners against their HOA, a discovery that the CCRs are non-enforceable is a powerful weapon that almost always carries the day. However, the absence of restrictions/covenants cuts both ways, and can carry several negative implications for all property owners in a given development.

Determining the Effectiveness of CCRs:

Covenants/Restrictions are placed upon subdivisions by the original developers who plat them. Those developers then go about selling individual lots to future residents, or selling the enitire development to a homebuilder who then builds homes upon the lots and re-sells them, individually. In either instance, the developer is often long-gone before the subdivision is fully built-out and occupied. Ususally, he's gone-on to develop his next subdivision.

The restrictions enacted by the developer often have expiration dates 20 to 30 years after they are adopted. Those CCRs may also contain procedures to transfer control of the subdivision to a Homeowner's Association (HOA). In those instances, the HOA becomes the "enforcer" of the CCRs. However, unless there is some action taken to extend them, the CCRs still expire.

In other cases, an HOA is never formed, is improperly formed, or is formed before power to enforce the restrictions is properly transferred away from the developer (or his successor). Each of these situations may result in an inability to enforce restrictions.

Good and Bad:

Like all institutions, HOAs have good and bad aspects. Homeowners seem to enjoy the stewardship of HOAs who clean community pools, keep gates in good working order, erect Christmas lights, and prevent cell phone towers from being erected in enighborhoods. But, when the HOA spirals out of control on issues like yard watering, car bumper stickers, backyard swingsets and the like, they can be downright nasty.

In the end, well thought-out, equally-enforced restrictions probably benefit all owners of lots within a given subdivision because they promote uniformity, land-use integrity, and the common interest in preserving home values.

If faced with a dilemna regarding enforceability of CCRS, one should start with a good reading/review of the restrictions, including any expiration dates. When in doubt, contact a lawyer with experience in HOA law, including interpretating and litigating restrictions. A strong HOA lawyer can be an invaluable asset in understanding your rights and responsibilities within the context of community living and community associations.