Simon PLC Attorneys & Counselors – October 2024 Memorandum
HOMEOWNERS’ ENERGY POLICY ACT IMPLICATIONS FOR HOMEOWNERS AND THE HOA ASSOCIATION COMMUNITY
Troy, MI. Michigan has enacted the Homeowners’ Energy Policy Act (MCL 559.301 et. seq.) and it will become effective as of March 19, 2025. The Act limits the power of homeowners’ associations (HOAs) to prohibit energy-saving modifications to homes even if such improvements violate current building restrictions and appearance standards as written. The Act is an example of the law catching up with societal trends and behaviors, in this case with respect to the growing interest in energy conservation.
General. The Act states that HOAs cannot prohibit certain types of energy-saving improvements, installations, and modifications on members’ properties. The described improvements include without limitation solar energy systems (“SESes”), air and ground source heat pumps, insulation upgrades, clotheslines, rain barrels, reflective roofing, electric vehicle supply equipment, and energy-efficient windows and appliances. The Act does carve out a right to establish and enforce standards for visible improvements, for example, solar panels being limited to certain sizes and types so that there is some conformity in the neighborhood. An HOA must adopt a solar energy policy outlining reasonable conditions for the installation and maintenance of SESes so that community members receive equal treatment. The Act provides specific guidance for drafting a compliant policy, with attention to prohibited HOA policies such as requiring fees for considering an application, or imposing continual reporting or inquiries regarding a homeowner’s energy use.
Proceeding under the Act. HOAs can still review an application to install a solar panel by an owner and deny an application to install a solar panel if the requirements of the Act are not satisfied. The Act provides a list of circumstances where an application may be denied, or an existing SES can be ordered removed, including but not limited to, violation of another applicable law, installation does not conform with the application specifications, encroachment onto another property, and noncompliance with reasonable neutral color requirements. Installation can also be restricted if the subject property has a shared roof or is considered in a common area. The required form and content of a homeowner’s application is also specified in the Act, together with timeframes for action by the HOA and the circumstances under which the homeowner may proceed if the HOA does not act.
Enforcement. The Act assigns local governments to enforce the Act and impose the assigned penalties for noncompliance. There is also a self-help aspect, whereby any member who does not receive a response to their application within a reasonable time can proceed with their improvements and no be subject to HOA fines or penalties. Homeowners can also sue their own HOA for noncompliance with the Act.
Interpretation. The legislature did not include a definition of a “homeowners association” in the final version the Act. Immediately the question arises whether the Act applies to an “association of co-owners” under the Michigan Condominium Act. There is no equivalent state statute relating to HOAs, and other laws specify application to HOAs or condominium owners’ associations or both. Thus, there is a good argument to be made that condominium owners’ associations are not included in the Act and continue to be governed by their Master Deeds and bylaws under the Condominium Act. This will almost certainly be further discussed in an amendment process or in litigation.
We are available to help HOAs or individual homeowners understand their rights and obligations under the Homeowner’s Energy Policy Act.
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