A recent decision of the Queensland Court of Appeal has cast a long shadow over the right of lot owners to install solar PV panels, despite restrictive covenants or by-laws.
The court’s decision, while correct at law, opens the way for bodies corporate or developers to effectively ban the installation of solar PV cells.
Prior to 2010 it had been a common practice for developers or bodies corporate to put in place by-laws or architectural codes which restricted the installation of solar PV cells, prohibited certain light roof colours, prohibited the use of (typically reflective) energy efficient windows or imposed a minimum floor area, number of bathrooms or particular building orientation. These restrictions led to the construction of less energy efficient buildings.
To promote sustainable and energy efficient construction the Queensland Government brought in amendments to both the Building Act 1975 and the Body Corporate and Community Management Act 1997 which were known as the “ban the banners” amendments.
The effect of the amendments was to prohibit such restrictions within by-laws or architectural codes. In non- community title scheme developments, the target was restrictive covenants, typically required to be entered into as a condition of purchase of a vacant block of land within a new estate.
There was a minor backlash against the “ban the banners” amendments and changes were made in 2012. Since then, there have been restrictions in place on certain prohibitions, restrictions or consent requirements within community management statements (including by-laws) and building management statements.
Particularly, and relevant to the case of Bettson Properties Pty Ltd & Anor v Tyler  QCA 176, provisions in a developer’s restrictive covenant that:
- prohibit the installation of solar PV cells on the roof have no force or effect;
- restrictions on where solar PV cells could be installed on the roof that were simply in place to enhance or preserve the appearance of the building and prevented an owner from installing the solar PV cells on the roof are also of no force or effect; and
- if a developer (or body corporate) consent was required for the installation of solar PV cells on the roof then that consent cannot be refused where the only reason to withhold consent was to preserve or enhance the external appearance of the building.
In the Court of Appeal case of Bettson, Mrs Tyler had purchased a property in the suburb of Griffin and at the time of purchase had entered into some “building covenant conditions”. The building covenant conditions provided that:
“the Buyer shall submit to the Seller, plans for covenant approval including the size, number and location of any solar panels. Any panels that are considered by the Seller to cause a visual impact or not aesthetically pleasing, will not be approved.
The Buyer shall not proceed with affixing solar panels to any roof or structure until it has received the consent in writing for the same from the Seller and then only in accordance with terms of the Seller’s consent”
Despite that condition Mrs Tyler engaged a contractor to install solar panels on the roof of her house without first obtaining approval from the developer.
The solar panels were located in the best spot on the roof to maximise their efficiency. Unfortunately however for Mrs Tyler that side of the house was also facing the street and visible from various other places within the housing estate.
The developer formed the view that the solar PV panels location on Mrs Tyler’s roof had an adverse aesthetic impact.
After trying to convince Mrs Tyler to relocate the solar panels the matter ended up in the Supreme Court before Justice Burns. At trial his Honour referred to evidence of a solar panel expert that if the solar panels were relocated to a different, less obvious area on the roof they would still be viable but would be up to 20 per cent less efficient. The developer’s evidence was that if the solar panels were not relocated to where they would not adversely effect the aesthetic appeal of the estate then the value of the estate (and the land and houses in it) would be diminished. That would result in a significant but not easily quantifiable loss of revenue for the developer, and in the capital value of the other houses in the estate.
Justice Burns referred to the “ban the banners” provisions within the Building Act 1975 and found that the developer’s covenant had the effect of preventing the installation of the solar PV cells merely to enhance or preserve the external appearance of the building.
A result Mrs Tyler was, at least initially, allowed to keep her solar PV cells in place.
The developer took the matter to the Court of Appeal. On appeal the developer’s covenant was upheld.
There were, in effect, two primary issues.
The first was that where a covenant (or by-law) prevents the installation of solar PV cells for purely aesthetic reasons, the preservation or enhancement of this aesthetic appeal must be in relation to the building that the solar PV cells are on and not with respect to other buildings in the estate or indeed the estate as a whole. The developer’s evidence was that it was concerned about the aesthetic appeal of the estate by virtue of the solar PV cells on Mrs Tyler’s roof. In other words, the developer’s covenant was in place to preserve or enhance the external appearance of the estate as a whole. As such the covenant was not prohibited under the ban the banners provisions.
The second significant issue was that Parliament had used the words “prevents a person from installing ……photovoltaic cells on the roof.”
The evidence in front of the trial judge, was that solar PV cells could still be installed on the roof in a different location which would not contravene the developer’s covenant. Installation in the other location would however mean that the cells were a lot less effective (20 per cent less efficient).
Interpreting the word “prevent” in its normal way, the developer’s covenant did not offend s246Q of the Building Act 1975.
Accordingly, Mrs Tyler was ordered by the Court of Appeal to remove or relocate her solar cells.
The decision, whilst containing rigorous and correct legal reasoning, significantly undermines the ability of the “ban the banners” amendments to address the policy objective of removing obstacles from the installation of roof top solar. Clever developers or bodies corporate can now draft restrictive covenants, by-laws or landscaping and architectural codes, which technically do not prohibit or prevent the installation of solar PV cells but do relegate them into locations which render them infeasible.
A 20 per cent loss of efficiency can have a significant impact upon the ability of a solar cell to generate electricity and therefore to pay for itself. In turn that increases the pay back period; being the period over which the power generated by the cells pays for the cells purchase and installation) cost. That can create a significant disincentive for owners to install solar PV cells.
By putting in place an overarching requirement that the solar PV cells do not adversely impact the aesthetic appeal of (say) the “scheme land” the “ban the banners” restrictions can be neatly side-stepped.
If you are an owner wanting to install solar PV cells and are unsure of what your by-laws mean for you, or if you are a developer or body corporate wanting to responsibly regulate an installation of solar PV cells within your community titles scheme then Stratum Legal can help you.
This article was contributed by Michael Kleinschmidt, Director – Stratum Legal