Solar Energy Systems: Civil Code §4746 and “Equitable Allocation”

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By Jillian M. Wright, Esq.

Since January 1, 2018, California community interest developments have been required to allow members to install solar energy systems on common area roofs of the buildings in which their unit is located or on roofs of adjacent carports or garages (See Civ. Code §§ 714.1, 4600, and 4746). However, this does not mean a member can put as many solar panels as he or she wants up on the common area roof without consideration of neighbors in the building. The California Legislature fortunately included a provision into Civil Code section 4746(b) which states in part:

(b) When reviewing a request to install a solar energy system on a multifamily common area roof shared by more than one homeowner pursuant to Sections 714 and 714.1, an association may impose additional reasonable provisions that:

(1) (A) Require the applicant to submit a solar site survey showing the placement of the solar energy system prepared by a licensed contractor or the contractor’s registered salesperson knowledgeable in the installation of solar energy systems to determine usable solar roof area…

(B) The solar site survey shall also include a determination of an equitable allocation of the usable solar roof area among all owners sharing the same roof, garage, or carport.

(Civ. Code § 4746(b))

While this provision prohibits the first owner in a building who wants to install a solar energy system from taking all the usable space on the roof, it unfortunately fails to define what an “equitable allocation” is. Does it mean each member in the building gets an equal amount of square footage of the usable roof[1] or does it mean each owner should get a proportion of the usable roof space that would result in an equal amount of energy output? We interpret it to mean the latter.  This interpretation promotes solar ownership as it theoretically allows all owners in a building an equal opportunity to the same quantity of solar energy, whereas the former interpretation rewards only the first installers of solar energy systems who utilize the most energy efficient square footage available on the shared roof.      Even if equitable allocation is based on a proportional share of potential energy production, as technology evolves and energy output for solar energy systems improves, equitable allocation may change over time. If this happens, the Board may need to reconsider existing determinations of equitable allocation.

Another quandary arises when a building contains different sized units or members in a building pay variable assessments based on unit size. The Board must then determine if “equitable” means “equal/identical proportions” or “fair/reasonable.”  For example, one could argue that if a member pays more in assessments, then it would be fair for that member to  use a larger share of the usable common area roof space based on the owner’s assessment to common area ratio for the building.  In situations where assessments are variable, this is a reasonable interpretation; however, where assessments are equal for all units, it becomes more difficult for an owner to argue he is entitled to more roof space based on unit size alone.

Ultimately it is up to the board to decide what is fair and reasonable when determining the equitable allocation of a common area roof. Each association and each building is different, and unfortunately there is no black and white answer that applies in every situation.  If you require further guidance in making such a determination, Epsten Grinnell & Howell, APC can assist you in the process.

 

[1] This is another term the legislature failed to define. Since the legislature appears to leave the preparation of a solar site survey in the hands of the solar installer, it might be necessary to obtain the opinion of the solar installer on what portion of the roof is considered “usable” on a case-by-case basis.   Generally, we believe the definition of “usable roof” to be those portions of the roof that get sun (are not shaded by trees or vents) and can feasibly support an energy system.

 

Keywords: Solar Panels