28 December 2022

The rights of the Owners’ Association regarding solar panels

By Marie-Christine Veltkamp-van Paassen

There are currently many initiatives to build and live more sustainably.

Generating energy through solar panels is a prime example of innovation in this regard. However, solar panels also require space, especially when an entire project or area is to be powered by solar energy. Roofs of houses and buildings are very suitable for this purpose. Unfortunately, the law sometimes hinders the practical implementation of solar panels. In this blog, I will discuss the rights of the Owners’ Association to solar panels.

Ownership of solar panels

It is significant that solar panels remain the property of the supplier. After all, they are its capital. Therefore, when installing solar panels on the roof, care should be taken to ensure that the solar panels do not become part of the roof or that they are acquired by accession. This is because the owner the roof or land then also becomes the owner of the solar panels.

Related to the above is the question of whether the solar panels belong to the roof according to generally prevailing opinion. But also whether they can be removed easily and without significant cost. And whether or not there is a long-lasting affinity with the roof. In practice, this often generates discussion.

Establishing building rights prevents further discussion. In a manner of speaking, it establishes a legal dividing line between the roof and the solar panels. In this way, the solar panels remain the property of the supplier. Suppliers and/or financiers of solar panels therefore often require a building right when installing solar panels on the roof.

Building rights of the Owners’ Association

The owner of a building is entitled to establish a building right on it. However, paradoxically this does not apply to an Owners’ Association. This follows from Article 5:117 of the Dutch Civil Code (Burgerlijk Wetboek). However, an owner of an independent apartment right can encumber that apartment right with a restricted right, such as a building right. But the roof is almost always part of the common area in an Owners’ Association. If it concerns a new construction project, a building right may be established before the division, but after division the property cannot be encumbered with a building right. This is unfortunate because it is by no means uncommon for a building divided into apartment rights to be inherently very suitable for the installation of solar panels.

The above problem can be solved by amending the subdivision deed and removing the roof from the subdivision. The roof is then apportioned to the common owners rather than the Owners’ Association. These common owners must then establish the building rights with each other. Such a construct was also applied in the past in Amsterdam during the construction of the metro tunnel. The municipality wanted a building right for the tunnel, but could not establish a building right for plots that were divided into apartment rights.

Needless to say, this is a very complicated undertaking. Amending the subdivision deed requires the cooperation of all owners, as well as all mortgagees or other holders of restricted rights. Subsequently, such cooperation is again required when establishing the building rights. If such a construct succeeds at all, it is preceded by much haggling.

Draft legislative proposal

A draft legislative proposal was presented this year to make Book 5 of the Dutch Civil Code (which regulates apartment rights, among other things) more forward-looking. Part of this is an amendment to Article 5:117 of the Dutch Civil Code, which will make it possible for the Owners’ Association to establish a building lease right in the common areas.

Establishing a building right will change the property law situation (the right of ownership is restricted), so it does require the consent of mortgagees and other holders of restricted rights. This is also included in the draft legislative proposal. As long as the mortgagee or other holders of restricted rights are not hindered by the building rights, it is expected that consent will not be refused or cannot reasonably be refused. This is even more true now that the request for permission will often be made in the interest of sustainability. To this end, shared responsibility is laid down in the Climate Agreement. Should a mortgagee or other holder of restricted rights acts unreasonably in this regard, then Court authorisation may be sought.

In the event that the draft legislative proposal will become law, it will not only give an Owners’ Association much more leeway for the installation of solar panels. This would also count for the installation of thermal energy storage systems or green roofs. I am happy to keep you updated on progress in this regard.

Would you like more information?

Would you like advice on innovation in law or do you have another legal question? Please do not hesitate to contact me.

Marie-Christine Veltkamp-van Paasen

Marie-Christine Veltkamp-van Paassen

Lawyer / associate partner

Marie-Christine Veltkamp-van Paassen is an experienced real estate lawyer.

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