HB 5168 — AN ACT CONCERNING SOLAR INSTALLATIONS IN CERTAIN COMMON INTEREST OWNERSHIP COMMUNITIES.

JUD602 Joint8 FavorablesHB5168 LCOFile 7No. of 7

602 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

Municipalities Effect FY 25 $ FY 26 $ All Municipalities Potential Minimal Minimal Revenue Gain Explanation The bill prohibits unreasonable restrictions of common interest communities' declarations or bylaws that unreasonably restrict the installation of solar panels on certain types of units.

This results in a potential minimal revenue gain to municipalities beginning in FY 25 for building permits fees associated with the installation of solar panels.

1 Thisbillresultsinminimalpotentialsavingsfor someratepayers.The bill provides a framework for the installation of solar panels to single family detached units in common interest ownership communities and increasesaccessibility to solar powergenerationfor someresidents.This creates minimal potential savings for ratepayers to the extent this bill increases solar power utilization in single family detached units.

The bill also makes other various changes to common interest communities that do not result in a fiscal impact to the state or municipalities.

1Each municipality sets its ownfee amounts for building permits.

Building permit fees often range from $10 to $15 per $1,000 of construction.

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602 House "A" alters the original bill by making various changes to common interest communities that does not result in a fiscal impact.

House "C" alters the original bill by exempting cooperatives from provisions of the bill which may reduce any fiscal impact associated with the bill.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of building permits fees issued.

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602 OLR Bill Analysis sHB 5168 (as amended by House "A" and "C")* AN ACT CONCERNING SOLAR INSTALLATIONS IN CONDOMINIUMS AND COOPERATIVES.

SUMMARY This bill requires common interest communities to assess a unit owner for any increase in common expenses (e.g., maintenance, repair, or insurance costs) that result from the owner’s addition, alteration, or improvement.

(Common interest communities include condominiums, cooperatives, and planned communities.) Separately, the bill prohibits enforcing any provisions in a condominium or planned community declaration or bylaws that unreasonably restrict solar generating systems (i.e., solar panels) on the roofs of single-family detached units or that otherwise conflict with the bill’s solar panel requirements, beginning January 1, 2025.

It also establishes (1) a solar panel approval process for unit owners and these associations to follow;

(2) terms to which the unit owner must agree (e.g., to assume certain costs and indemnify the association);

and (3) a period during which associations may opt out of the bill’s solar panel- related requirements.

In doing so, the bill repeals a current, narrower provision that restricts planned community associations (but not condominiums or cooperatives) from barring solar panels on units that do not share a roof.

The bill additionally authorizes associations to install solar panels on any common elements for all unit owners’ use and develop rules for their use.

It also makes minor and conforming changes.

*House Amendment “A” makes two changes in the bill’s provisions sHB5168 / File No.

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602 on solar panels installed in associations.

It (1) deems applications approved if an association requests additional information and does not issue a decision within 30 days of receiving the information and (2) allows associations to require unit owners to remove any solar panels before selling their units if the prospective buyers do not agree to take over any solar panel leasing agreements (and correspondingly requires sellers to notify buyers of this).

*House Amendment “C” excludes cooperatives from the bill’s provisions on panels installed on single-family detached units in associations.

EFFECTIVE DATE:

January 1, 2025,except theprovision on increases in common assessments is effective October 1, 2024.

APPROVAL PROCESS The bill requires condominium or planned community unit owners to get their association’s approvalto install solar panels on single-family detached units.

The unit owner must apply with the association’s executive board and do so in the form and way directed by the board.

Upon receiving the unit owner’s application, the board must acknowledge receipt in writing within 30 days and issue a written decision within 60 days, unless it requests additional information.

If the board asks the owner to provide additional information about the proposal, it has up to 30 days after receiving the information to deny it.

The application is deemed approved if the board does not deny it in writing within these timeframes.

The board must process these applications in the same way applications for additions, alterations, or improvements are processed under the association’s bylaws or declaration.

And it may not unreasonably withhold approval if the unit owner complies with the bill’s requirements.

AGREEMENT TERMS AND OWNER RESPONSIBILITIES Under the bill, if the application is approved or deemed approved, sHB5168 / File No.

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602 the unit owner and association must enter a written agreement.

The agreement may be recorded in the land records of the town or towns in which the association is located.

The agreement must require the unit owner to:

1.

comply with the declaration or bylaws regarding additions, alterations, or improvements as applicable;

2.

hire a registered and insured contractor to install the solar panels who must, within 14 days after the unit owner and association execute the agreement, (a) provide a certificate of insurance for at least $1 million of liability coverage for the association, its manager, and the unit owner;

(b) provide proof of any legally required workers’ compensation insurance;

and (c) give the association a mechanic’s lien waiver in its favor;

3.

pay any installation costs (e.g., increased master policy premiums, the association’s attorney’s fees, fees for engineers and other professionals, and fees for permits and zoning compliance requirements);

4.

indemnify other unit owners and the association, its executive board, officers, directors, and managers for any damage, loss, or financial obligation the solar panels cause;

and 5.

assume full responsibility, including sole financial responsibility, for maintaining, repairing, and replacing the unit’s roof.

The billmakesthe unit owner,or any successive owner who assumed the unit’s title and the owner’s duties under the bill, responsible for certain costs, including costs to:

1.

repair, maintain, or replace the solar panels;

2.

repair damageto theassociation’scommonelementsor unitsdue to installing, using, maintaining, repairing, removing, or replacing the panels;

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repair the roof after the panels are removed;

and 4.

cover commonexpensesfor losses due to thesolar panelsthat are uninsured under the association’s master policy.

Under the bill, the association may also assess the unit owner for any uninsured portion of a loss (including deductibles) it incurs due to the panels.

The association may do so regardless of whether it submits an insurance claim.

Regulatory Requirements The bill explicitly requires the solar panels to comply with all applicable state, federal, and local health and safety standards and requirements.

Attorney’s Fees Under the bill, if the association initiates a legal action to enforce compliance with the written agreement or any of the bill’s related requirements, the prevailing party must be awarded reasonable attorney’s fees.

SUCCESSIVE OWNERS AND BUYERS The bill requires the unit owner, or any successive owner, to disclose to any prospective buyers the (1) existence of the solar panels and any related agreementswiththeassociation;(2)unit owner’sresponsibilities associated with the solar panels;

and (3) requirement that the buyer will ownthesolarpanelsortakeoveranyagreementtheunitownerhaswith the panel owner (e.g., a lease agreement), unless they are removed before the sale.

The association may require the unit owner to remove the panels before the sale if the buyer does not agree to (1) take over ownership of thesolarpanelsoranyleasing orother agreement forthem;(2)bebound by the indemnification agreement;

and (3) be responsible for the full costs of maintaining, repairing, and replacing the unit’s roof.

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602 OPT-OUT Associations formed by January 1,2025, mayopt out of the bill’s solar panel prohibition and requirements if they do so by December 31, 2026.

To opt out, at least 75% of the association’s board of directors must vote to do so.

Within 30 days after the favorable vote to opt out, the association must record notice of it in the land records of the town or towns in which the association owns real property (e.g., land or buildings).

COMMITTEE ACTION Planning and Development Committee Joint Favorable Substitute Yea 21 Nay 0 (03/15/2024) Judiciary Committee Joint Favorable Yea 35 Nay 0 (04/12/2024) sHB5168 / File No.

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