Impact Michigan House Bill 5028 May Have on Community Associations in Determining the Best Policies for their Residents

A critical issue that could impact the autonomy of community associations in Michigan regarding green energy and energy efficiency policies is pending in the Michigan Legislature. House Bill 5028 may affect Condominium and Homeowner Associations (HOA) associations regarding their governance as to green energy and energy efficiency policies that affect residents.  Specifically, communities must determine the most effective ways to implement eco-friendly initiatives while also preserving the democratic rights of the associations themselves.

Some key concerns that the Michigan Legislative Action Committee has regarding HB 5028 is whether the bill inappropriately compromises the contractual rights of existing associations. This could occur by eliminating an association’s right to require approval before installation of a roof-top solar panel might depriving associations of their right to self-govern.

While focusing mainly on roof-top solar panels, the bill also deprives associations of authority in other areas such as installation of windows and insulation without providing a mechanism for associations to maintain their responsibilities in these areas. The bill doesn’t distinguish between community types as it treats condominium associations and homeowner associations the same, even though maintenance and repair responsibilities will often differ.  There are also insurance issues wherein the bill overlooks those concerns leading to potential conflicts between owners and association obligations which will impact insurance procurement and potentially negate roof warranties.

The state’s involvement through creation of this new policy requirement may restrict an association’s ability to regulate solar panels and establish appropriate safety standards which will potentially undermine building safety.  The bill’s vague terms make it challenging for associations to impose reasonable conditions on solar energy systems without violating the bill.  Also, the bill imposes undue limitations on an association’s ability to deny an application for a roof-top solar panel which fails to account for legitimate safety concerns.  The community aesthetics are at the forefront of the bill, which ignores an association’s legitimate concern in monitoring community aesthetics and undermines the community’s right to self-govern through a democratically elected board of directors.

HB 5028 was introduced on September 26, 2023, and has not yet passed the Michigan House nor the Senate, and therefore it has not been signed into law.  Basically, the bill would create a new Act, The Homeowner’s Energy Policy Act, which would force associations to adopt a policy statement on solar energy that complies with the requirements of the bill.

Besides roof solar panels, the proposed legislation also would deal with several other energy-related items such as rain barrels; reflective roofing; solar water heaters; and energy efficient windows.  Electric vehicle supply equipment is a major portion of the bill which would mean a machine or other device supplied with electricity for charging batteries of motor vehicles would be regulated.

Mandates as whether a community association would have 30-days after receiving a member’s request for installation of a solar energy system to approve or deny it are included in the bill. There are several controversial aspects including section 13 of the bill which would require that if a system is to be installed on a shared roof for solar energy, then the provisions of the bill would not apply unless all members served by the shared roof agree to the installation. This could cause many controversies amongst homeowners and, as a result, associations will need to address these items in a timely manner to avoid violation of the Act.

The proposed legislation will also cause community association boards to adopt written solar energy policies within 90-days of the bill’s effective date or fail to approve or deny the member’s request to install solar energy systems within 30-days.  If the member proceeds with the installation of the solar energy systems, the HOA could not impose fines or otherwise penalize members for complying with the provisions of the bill.

There are many items in the bill that will place burdens on association boards and cause more regulation, and therefore, the bill must be closely monitored by community association boards and residential management companies to determine what provisions are required should it become an effective law.

John D. Gwyn is an attorney in our Livonia office where he focuses his practice on the representation of community associations, management companies and developers with a particular emphasis on real estate and commercial litigation. He has handled many types of community association related matters, including assessment collections, lien foreclosures, bylaw violations, civil rights defense, and creditor bankruptcy matters.

He has gained experience in community association law over the years through his representation of condominium and homeowners associations, as well as individual homeowners, in matters involving real estate, contract, and construction defect litigation issues. His extensive litigation and transactional background provides him with the experience necessary to handle even the most complex legal issues that neighborhood associations may encounter. He may be reached at (734) 261-2400 or jgwyn@cmda-law.com.