Solar Panel Win for Lot Owner

The Queensland Supreme Court has recently considered the enforceability of a Building Covenant in the case of Bettson Properties Pty Ltd & Anor v Tyler [2018] QSC 153. This matter involved a dispute between a Developer (“the Developer”) and a lot owner (“Tyler”) as to the location of solar panels installed by the lot owner at the property.

Unable to reach a resolution after lengthy negotiations, the Developer subsequently applied to the Court for a declaration that the solar panels installed were in breach of the Building Covenants and requested that the Court grant injunction for the relocation of the panels.

Building Covenants are commonplace in newly established residential development and are designed to impose certain restrictions on a land owner with respect to their use of the property. Ordinarily, the restrictions relate to the appearance and quality of structures and landscaping on the property to ensure that houses within a development adhere to a prescribed “look” to benefit the overall development. However, not all Building Covenants are enforceable.

The Building Covenants in question required Tyler to submit plans to the Developer to obtain approval for the size, number and location of any solar panels prior to installation at the property. Pursuant to the Building Covenants, the Developer had the right to refuse to grant Tyler approval to install the solar panels if the Developer was not satisfied with the aesthetics, size or location of the solar panels. Soon after purchasing the property, Tyler engaged a contractor to install the solar panels on the roof of her home on the advice that the best location for the solar panels to maximise their efficiency would be the north-eastern quadrant of the roof.

The installation of the solar panels quickly came to the attention of the Developer who was concerned not only because the panels had been installed without their consent but because the panels were in a highly visible location that affected the aesthetics of the development. The Developer insisted that Tyler relocate the panels to a location where their presence was less visible. However, Tyler refused to relocate the panels on the basis that the panels would be approximately 15% to 20% less efficient in the alternate location. Ultimately, the parties were unable to reach an agreement, and the Developer applied to the Supreme Court for a declaration and injunction for the removal of the panels.

In determining the application, the Court considered relevant sections of the Building Act 1975 (Qld) (“the Act”) which deals with contractual obligations that benefit a person other than the owner of the building. Importantly for Tyler, the Act expressly prohibits any restriction on the installation of solar panels and hot water systems on the roof or exterior of a house if such restriction is to enhance or preserve the external appearance of the building. The Developer attempted to argue that while the Building Covenants restricted the location of the solar panels, Tyler was not restricted from installing the solar panels pursuant to the Building Covenant and as such the Building Covenant was not in breach of the Act.

In the end, the Court found that a covenant which allowed a Developer to restrict the location of a solar panel was in breach of the Act and ineffective. As such, the Court set aside the Developer’s application and allowed the solar panels to remain in their original location.

Should you have any queries relating to the drafting or enforceability of Building Covenants, please contact our commercial law team for further information.