Energy Bill Going to Governor for Signature

In our February and March editions of Community E-ssentials, we informed you of House Bill 1270 – a bill aimed at addressing energy conservation in homeowners associations.  Today HB 1270 cleared the final hurdle in the Colorado General Assembly and has been sent to Governor Ritter who is expected to sign the bill into law.  HB 1270 requires associations to allow residents to install "Renewable Energy Generation Devices" and "Energy Efficiency Measures", subject to the following conditions:
 

  1. The device must fall within the statutory definition of "Renewable Energy Generation Device" or "Energy Efficiency Measure";
  2. Unless otherwise approved by the association, the installation can only be made on property owned by the resident; and
  3. The association may place reasonable aesthetic restrictions on dimensions, placement and external appearance of the devices.

A "Renewable Energy Generation Device" is defined as either: (i) a solar energy device as clarified in C.R.S. 38-32.5-100.3, or (ii) a wind-electric generator (i.e., wind mills) that meets certain standards established under C.R.S. 40-2-124.

An "Energy Efficiency Measure" is defined as a "device or structure that reduces the amount of energy derived from fossil fuels that is consumed by a residence or business located on the real property."  The devices/structures are limited to the following:

An awning, shutter, trellis, ramada, or other shade structure that is marketed for the purpose of reducing energy consumption;

  • A garage or attic fan and any associated vents or louvers;
  • An evaporative cooler;
  • An energy-efficient outdoor lighting device, including without limitation a light fixture containing a coiled or straight fluorescent light bulb, and any solar recharging panel, motion detector, or other equipment connected to the lighting device; and
  • A retractable clothesline.

The Bill only applies to property owned solely by the resident.  Therefore, an association may still prohibit or limit installation and use of the foregoing devices on the common elements and limited common elements as they are not owned solely by the resident, subject to the requirements of its governing documents.

When creating reasonable aesthetic restrictions on dimensions, placement and external appearance of the device, associations must take into consideration certain standards, depending on the device. 

If the device is a  Renewable Energy Generation Device then the aesthetic standards must not: (i) significantly increase the cost of the device OR (ii) significantly decrease its performance or efficiency. 

If the device is an Energy Efficiency Measures then the aesthetic standards must consider: (i) the impact on the purchase price and operating costs of the energy efficiency measure; (ii) the impact on the performance of the energy efficiency measure; AND (iii) the criteria contained in the governing documents of the association.  Note that the association must consider ALL of the foregoing criteria.  There is no hierarchy among the standards (i.e., no standard is required to be weighed more heavily than the other).

In addition, the Bill allows an association to place reasonable noise restrictions on the installation of wind-electric generators, pursuant to the association’s architectural review process. 

Although the Bill will not take effect until early to mid August, 2008, here are five things an association should do to prepare itself for handling requests for installation of the foregoing devices:

Review your Declaration.  If your declaration contains provisions that are contrary to the Bill, you cannot enforce such provisions.  In that case, we recommend the Association record a one-page Notice Regarding the Unenforceability in the and Recorder’s Office.  The purpose of the Notice is to put all current and future owners on notice that HB1270 supersedes contrary provisions of the declaration.  If you would like our assistance in reviewing your declaration and, if applicable, drafting and recording this Notice, we will charge a flat fee of $75.00.
 
Review your Rules, Regulations, and Guidelines. If your rules, regulations or guidelines contain provisions that are contrary to the Bill, you cannot enforce such provisions.  In that case, we recommend the Board amend the rules, regulations or guidelines to eliminate contrary provisions.
 
Adopt Reasonable Aesthetic Restrictions.  If your association is regularly reviewing any devices or structures that fall within the application of this Bill, we recommend the Board adopt reasonable aesthetic provisions that are consistent with the standards of the Bill. 
 
Remember, however, that the standards are different depending on the device:
  • Aesthetic provisions for Renewable Energy Generation Devices must not significantly increase the cost of the device OR its performance or efficiency,
  • Aesthetic provisions for Energy Efficiency Measures must consider the impact on the purchase price, operating costs, and performance of the energy efficiency measure AND the criteria contained in the governing documents of the association. 
Review your Architectural Application and Approval Process.  Make sure your architectural review process and application forms are consistent with the Bill, which requires a standard of review that is particular to the foregoing devices.  For example, if the association is reviewing an application to install solar panels, the association must know the purchase price of the solar panels to determine whether its aesthetic provisions “significantly increase the cost of the device."
 
To that end, we recommend the association add a supplemental form that is only used for reviewing applications to install Renewable Energy Generation Devices and Energy Efficiency Measures. We can assist you in drafting this form if desired.
 
Educate Homeowners.  The best way to ensure understanding of this Bill is through education.  We recommend the association include an article in its next newsletter that explains the Bill in detail.  In the near future we will be providing a general article for inclusion in your newsletter.