Raleigh family sued HOA after being fined for solar panels. How NC Supreme Court ruled.

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Hate thy neighbor?

When relationships between HOAs and homeowners are contentious it can turn ugly.

Homeowner associations were dealt a legal blow in June — in a ruling that was also a boon to the solar industry — when North Carolina’s highest court ruled in favor of a Raleigh family whose HOA had fined them for installing rooftop solar panels.

The HOA didn’t have anything in its rules that mentioned solar panels, so one family installed them without first asking the HOA for permission. Once the HOA found out about the solar panels it began steps to potentially foreclose on the family’s home, ultimately leading to a years-long legal battle.

The ensuing lawsuit established that a state law from 2007 gives homeowners wide-ranging legal authority to install solar panels on their homes, regardless of what their HOA thinks, according to the N.C. Supreme Court’s ruling from June.

While the 2007 law does contain some exceptions, it says broadly that “any deed restriction, covenant, or similar binding agreement that runs with the land that would prohibit, or have the effect of prohibiting, the installation of a solar collector ... is void and unenforceable.”

However, in a legal brief to the court, a collection of solar businesses acknowledged that the 2007 law is confusing, which they said has been bad for business: “No doubt, these shortcomings have enabled North Carolina HOAs to deny countless solar applications.”

The case had political angles to it, too.

The HOA initially won at trial, in front of a Republican superior court judge in Wake County. And June’s ruling at the Supreme Court in June was 4-3, and mostly along party lines. All but one Democrat ruled in favor of the homeowners and all but one Republican dissented, saying they would’ve ruled for the HOA.

At the Supreme Court the homeowners also had support from North Carolina Attorney General Josh Stein, a Democrat, who wrote a “friend of the court” brief on their behalf, as did solar companies and an industry group.

“North Carolinians must be able to use clean energy alternatives to power their lives and protect our environment,” Stein tweeted after the ruling was announced in favor of the homeowners and, therefore, the solar industry.

A national HOA-industry group, the Community Associations Institute, wrote its own brief in support of the Belmont HOA’s case. It noted that HOAs cover more than one in every four North Carolinians, and that “it is crucial that their authority not be improperly limited and that their decisions made in good faith be enforced.”

Background of the case

In 2018 the Farwig family, who live in northeast Raleigh’s Belmont neighborhood, installed over $30,000 worth of solar panels on their home without first getting permission from the HOA’s architectural review committee.

Five months later the committee told the family to apply for approval retroactively. Once they did, the committee denied their request, even after the family submitted a supportive petition from two dozen other residents of the neighborhood.

The committee ordered them to either move the solar panels to a part of the roof that couldn’t be seen from the road — but where the panels wouldn’t generate much electricity — or else face a fine of $50 per day for as long as the panels remained. As soon as the Farwigs accrued their first $50 in debt, the court’s ruling notes, the HOA immediately sued them and filed a lien on their home. The family counter-sued, and the case known as Belmont Ass’n v. Farwig eventually made it all the way up to the N.C. Supreme Court.

At issue, in this case, was the specific location of the panels — on the front of the home, publicly visible and facing the road. One of the exceptions the 2007 law makes is that HOAs or others can have limited restrictions against solar panels on the front of homes.

However, at the Farwig family’s home, that was the only part of the roof that got enough sun for solar panels. So the legal question was whether the HOA should still be able to rely on that exception, even if it essentially meant banning solar from that property entirely.

Because the law is clearly intended to support people’s ability to use solar panels, the justices wrote, the exception couldn’t apply and the family should be able to put up solar panels on the front of the home if that’s where the sunshine is.