Can a Virginia HOA stop me from installing solar panels if the ban is only in their bylaws or rules, not in the recorded declaration?

Plain-English summary

Delegate Yost asked whether a property owners' association (POA) could enforce a solar-panel prohibition in its rules or regulations when the prohibition was absent from its recorded declaration. The AG answered no under the version of Virginia Code § 67-701 effective July 1, 2014.

The statute said: "No community association shall prohibit an owner from installing a solar energy collection device on that owner's property unless the recorded declaration for that community association establishes such a prohibition." The AG read the express reference to a recorded declaration as excluding other means of prohibition, including bylaws, policies, rules, and other unrecorded instruments.

The AG also concluded that existing unrecorded prohibitions could no longer be enforced, regardless of when the POA adopted them. The prior statute had a grandfather clause; the 2014 amendment omitted it. The AG found that this retrospective effect did not violate Virginia's constitutional prohibition against laws impairing contracts. Although existing contracts were affected, the AG found the impairment was not substantial because POAs could still prohibit solar panels through recorded declarations and impose reasonable restrictions on their size, location, and manner of placement.

The opinion addresses panels on an owner's private property. It does not decide whether a POA may prohibit panels in common areas.

What this means for you

If you own property in a POA

Under the statute as the AG read it in 2015, a solar-panel ban in unrecorded POA rules or bylaws was unenforceable if the recorded declaration did not contain the ban. The opinion distinguishes an outright prohibition from a reasonable restriction on size, location, or placement.

If you administer a POA

The AG concluded that a prohibition on solar panels on an owner's property must appear in the recorded declaration. The opinion says a POA may use a recorded declaration or another legal means to impose reasonable restrictions concerning size, location, and manner of placement.

Currency note

This opinion interprets § 67-701 as amended effective July 1, 2014. Check the current statute and later authority before applying its conclusions to a current dispute.

Common questions

Can a POA enforce an existing solar ban found only in its rules?
No. The AG concluded that unrecorded prohibitions on an owner's private property were unenforceable regardless of when they were adopted.

Can a POA restrict where panels go?
The opinion says a POA may establish reasonable restrictions on size, location, and manner of placement through a recorded declaration or any other legal means. It does not evaluate a particular restriction.

Does this opinion decide rules for common areas?
No. The request and conclusion address solar panels on private property owned by homeowners.

Background and statutory framework

The AG treated the POA-homeowner relationship as contractual. He applied a three-part analysis to the retrospective law: whether it impaired an existing contract, whether the impairment was substantial, and whether a substantial impairment was a legitimate exercise of state power. He found an impairment, but concluded it was not substantial. He also cited the General Assembly's stated public need to increase solar power and reduce reliance on energy sources that contribute to greenhouse gas emissions.

The AG's conclusion was that a POA could prohibit solar panels on private property only through a recorded declaration. It could still impose reasonable restrictions concerning size, location, and manner of placement.

Citations and references

• Va. Code § 67-701 (version amended effective July 1, 2014)
• Va. Const. art. I, § 11 (contract impairment)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2015/14-057_Yost.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120

April 14, 2015

The Honorable Joseph R. Yost
Member, Virginia House of Delegates
General Assembly Building
Post Office Box 406
Richmond, Virginia 23218

Dear Delegate Yost:

I am responding to your request for an official advisory Opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire whether, in light of recent amendments to § 67-701 of the Code of Virginia, a property owners' association ("POA") is precluded from enforcing rules and regulations that prohibit homeowners from installing solar panels on their property, when such prohibitions are not contained in the recorded declaration of the POA.

Applicable Law and Discussion

The relationship between a POA and a homeowner is contractual in nature. Generally, POAs possess broad latitude to contract with homeowners to devise and enforce rules and regulations governing the use of private property. Nevertheless, the power of a POA to restrict the use of private property is not absolute and may be restrained by applicable law. Section 67-701, part of the Virginia Energy Plan, regulates the extent to which a POA may restrict the installation of solar panels on private property. As you note, this statute recently was amended by the General Assembly. Effective July 1, 2014, the statute provides, in relevant part, as follows:

No community association shall prohibit an owner from installing a solar energy collection device on that owner's property unless the recorded declaration for that community association establishes such a prohibition.

However a community association may establish reasonable restrictions concerning the size, place, and manner of placement of such solar energy collection devices on property designated and intended for individual ownership and use.

What is noteworthy about the current language of this statute is that it permits only one procedure by which solar panels may be prohibited by community associations: by inclusion in the recorded declaration. The maxim "expressio unius est exclusio alterius" "provides that mention of a specific item in a statute implies that omitted items were not intended to be included within the scope of the statute." Applying this maxim, the current language of the statute must be viewed as meaning that any attempt by a POA to prohibit solar panels on private property by means other than a recorded declaration, such as rules, regulations, bylaws, policies, or other unrecorded instruments, is unenforceable.

When read as a whole, the statute also means that, with the sole exception of recorded declarations, existing prohibitions against solar panels on private property are no longer enforceable. Had the General Assembly intended to create an exception for existing community associations' prohibitions against solar panels, it could easily have done so through a "grandfather clause," such as is contained in the predecessor version of this very statute. However, the General Assembly did not do so, thereby signaling its intent that the prohibition apply to existing unrecorded prohibitions. When the General Assembly clearly intends an enactment to have such retrospective effect, its intent will govern. Thus, I must conclude that § 67-701 was intended to preclude a POA from enforcing any existing prohibition on solar panels on private property, regardless of its date of adoption, unless the prohibition is contained in the POA's recorded declaration.

The only remaining question is whether the retrospective application of this statute is constitutionally barred. Statutes with retrospective effect implicate Article I, § 11 of the Constitution of Virginia, which provides that the General Assembly shall not enact laws "impairing the obligations of contract." The constitutional prohibition against impairing the obligations of contracts (the "Contract Clause") is not absolute, however. In certain circumstances, the state is permitted to use its regulatory power in a manner that affects existing contracts. As the Virginia Supreme Court has observed, the language of the Contract Clause "is [facially] unambiguous and appears absolute," but it is not "the Draconian provision that its words might seem to imply." "[T]he Commonwealth is permitted to exercise the power[] that is vested in it for the common good, even though contracts previously formed may be affected thereby." This power commonly is known as the police power.

Courts examine three factors to determine whether a statute affecting contracts is lawful as an exercise of the state's police power. First, as a preliminary matter, it must be shown that the statute does in fact impair existing contracts. Second, it must be determined whether the impairment is substantial. Third, if the impairment is substantial, it must next be determined whether the impairment is nevertheless "a legitimate exercise of the state's sovereign powers."

Under the first part of this test, § 67-701 does in fact impair the operation of existing contracts by precluding the enforcement of unrecorded POA prohibitions that became effective prior to July 1, 2014. However, under the second part of the test, the impairment is not absolute: POAs may still prohibit solar panels, so long as they do so by recorded declarations. In addition, pursuant to the statute, community associations still retain unrestricted authority to impose reasonable restrictions on the size, location, and manner of placement of solar panels on private property. Given this overall context, I conclude that the impairment of existing contractual relationships is not substantial.

In addition, it is particularly noteworthy that the statute in question is contained in Title 67, which is entitled the "Virginia Energy Plan." The placement of this statute within the Code of Virginia evinces a legislative intent that solar panels are to be viewed as part of Virginia's overall energy policy. Indeed, the uncodified enactment clause of the amended statute provides that the recent revisions were intended as "an exercise of the police power of the Commonwealth that is necessary for the general good of the public," representing "a necessary and appropriate response to the valid public need to increase the use of solar power as a means of reducing reliance on energy sources that contribute to greenhouse gas emissions." Accordingly, in amending § 67-701, the General Assembly expressly has exercised the power "that is vested in it for the common good, even though contracts previously formed may be affected thereby." The exercise of police powers for environmental protection purposes generally has been held to be a substantial and legitimate purpose. I therefore conclude that, under the third part of the test, the restriction on enforcing certain existing bans on solar panels should be considered a legitimate exercise of Virginia's sovereign powers.

For the foregoing reasons, and bearing in mind the overriding principle that all statutes are presumed to be constitutional, I conclude that § 67-701 does not violate the constitutional prohibition against legislation impairing the obligations of contract, and it is thus enforceable as duly enacted by the General Assembly.

Conclusion

Accordingly, it is my opinion that, under § 67-701 as amended, effective July 1, 2014, a POA may prohibit solar panels on private property only through a recorded declaration but not through any other means. Other than as may be contained in recorded declarations, such prohibitions are unenforceable, regardless of when or how they were imposed. It is further my opinion that a POA retains the authority under § 67-701 to establish reasonable restrictions concerning the size, location, and manner of placement of solar panels on private property, either through a recorded declaration or by any other legal means.

With kindest regards, I am

Very truly yours,

Mark R. Herring
Attorney General