The basis for this legal action arose when the Defendants-Appellants, the owners of a lot within the Belmont subdivision installed solar panels on the front roof of their home, which faced a public street. The Defendants failed to submit a request and obtain approval from the Architectural Review Committee ("ARC") as required by the Declaration prior to such installation. The Declaration provides for architectural control and establishes an ARC. Section 3(a) of Article XI of the Declaration states, "The ARC shall have the right to refuse to approve any Plans for improvements which are not, in its sole discretion, suitable for the Properties, including for any of the following: (i) lack of harmony of external design with surrounding structures and environment. and (ii) aesthetic reasons. Each Owner acknowledges that determinations as to such matters may be subjective and opinions may vary as to the desirability and/or attractiveness of particular improvements." The Declaration limits the types of “Improvements" an owner can install without first obtaining ARC review and approval. While solar panels are not specifically mentioned in the Declaration as an Improvement requiring ARC review and approval, solar panels do fall within the Declaration's definition of an "Improvement" and therefore required approval prior to installation.
When Belmont discovered the violation, it sent the Defendants notice of architectural violation and requested submission of an architectural request. The Defendants submitted a request after the fact and that request was denied by the ARC based on the finding that solar panels installed on the front roof of the home could be seen from the road. This denied location is a statutorily specified location in which solar panels may be prohibited as provided for in N.C. Gen. Stat. § 22B-20(d), the exception afforded to the general rule provided in N.C. Gen. Sat. § 22B- 20(b). Additionally, the ARC had rejected at least four (4) other applications to install solar panels from other homeowners in the community on the same grounds that they are inconsistent with the plan and scheme of development at Belmont. Therefore, the ARC exercised its powers in making its decision in line with a consistent policy and within the scope of N.C. Gen. Stat. § 22B-20(d).
The lawsuit was initially filed in Wake County Superior Court (19 CVS 4245) in April of 2019 by Belmont after the Defendants refused to remove the solar panels or move them to the rear of the roof as requested by the ARC. The trial court granted the Association's Motion for Summary Judgment. Defendants appealed to the North Carolina Court of Appeals, and the Court of Appeals affirmed the decision of the trial court. The main issue at the trial level and the primary issue on appeal is whether the architectural control restrictions in the Belmont Declaration are "deed restrictions which would prohibit the location of solar panels" as that specific verbiage is used in N.C. Gen. Stat.§ 22B-20(d), which regulates deed restrictions and covenants on solar collectors. Defendants-Appellants would have the court declare that a Declaration must specifically call out the required location for solar panels to qualify for the statutory exception, rather than allow the architectural control covenants requiring approval by an ARC to stand for such exception.
The North Carolina Court of Appeals heard the case without oral argument. On 18 May 2021, the North Carolina Court of Appeals, in a 2-1 decision, affirmed the trial court's judgment in favor of the Association. The Defendants appealed to the North Carolina Supreme Court, therefore jurisdiction now rests with the North Carolina Supreme Court and the amicus brief would be filed in the North Carolina Supreme Court.
This is a case of first impression in the state of North Carolina. It is generally understood that all legal costs for Defendants-Appellants have been paid by solar industry concerns. Solar industry interests have also paid tens of thousands of dollars of fines that have been levied against Defendants as a result of the unapproved solar panel installation. Friends of the court filing briefs in support of the Defendants-Appellants are all vested in supporting a very narrow statutory interpretation with the intent of allowing unfettered installation of solar panels. Similar (if not identical) industry interests unsuccessfully lobbied a bill during the 2021 North Carolina legislative session to eliminate the statutory exceptions for restrictive covenants which would allow control over solar panel placement. CAI-NC's LAC was active in successfully opposing that bill. The prevailing scheme of architectural control, as stated in the vast majority of CCR's nationwide, is directly implicated by the decision in this case, as concerns the ability of community associations and their ARCs to review and approve the location of satellite dishes. This is explained in more detail below in Section II regarding importance of issue to the development of community association law. Additionally, the plethora of amicus briefs filed in support of the homeowners' position indicate a significant commitment level to limit the ability of community associations to exercise covenanted control in the solar panel arena. While communities may differ on their appreciation or intolerance of the aesthetics of solar panel, the impact of this decision is to preserve that control that is vested in the association, rather than legislating a pre-determined outcome and taking all control away from the individual community association.
Amicus Brief
North Carolina Supreme Court Opinion June 2022
Court: North Carolina Supreme Court
Topic: Solar Panel and Association Covenants
Brief Author: Harmony W. Taylor, Esq., Law Firm Carolinas
Filed: October 4, 2021
CAI Amicus Review Panel: Mr. Robert Diamond, Esq. (VA), Mr. Stephen Marcus Esq. (MA), Mr. Thomas Moriarty, Esq., CCAL (MA), Ms. Mary Howell, Esq., CCAL (CA), and Ms. Lydia Linsmeier, Esq. (AZ)