In the recent Missouri Supreme Court case, Eikmeier et. al., vs. Granite Springs Home Owners Association, Inc., (Missouri No. SC 101161, decided January 23, 2026), the Court held that a Missouri Statute proscribing any covenant from limiting or prohibiting installation of solar panels also applied to preexisting covenants that existed before the statute was adopted.
Factual Background
In 2003, the developer of Granite Springs, a subdivision located in Greene County, recorded its declaration of covenants and restrictions applicable to the subdivision. One of the restrictions states as follows:
No television, radio, citizens band, short wave or other antenna, nor any satellite dish greater than 18” in diameter, solar panel, clothesline or pole, or other unsightly projection shall be attached to the exterior of any residence or erected on any Lot.
The appellants, who were the homeowners involved in this litigation, purchased a lot in the Granite Springs subdivision and built a new home on the lot. The homeowners were aware of deed restrictions that prohibit solar panels which was in effect at the time of the purchase. Since the homeowners wanted solar panels, they contacted the “HOA” about changing the restriction of solar panels but the HOA president stated that while the discussion about such a change had taken place, the restriction would remain on the property.
Then the homeowners became aware of the new legislation signed by the governor in June, 2022, which they believed would not allow the HOA restriction to prohibit solar panels. To that end, they obtained a bid from a contractor for installing solar panels and then sent it to the HOA. However, rather than banning solar panels altogether, the HOA stated that it would allow solar panels but not if the solar panels were visible from the street. In response, the homeowners received estimates for alternative designs but to obtain the same production level as those proposed from the street side, the non-street facing proposal required more panels with a higher upfront cost.
Because of the failure to obtain the consent of the HOA for the solar panel installation at a reasonable cost, the homeowners filed a petition for declaratory judgment and injunctive relief arguing that the HOA restriction prohibiting the solar panels violated Mo. Rev. Stat. § 442.404.3 which was enacted in 2022. At the same time, the homeowners sought a further declaration that any portion of the HOA’s policy that adversely affected the cost or efficiency of solar panels violated the statute. After a hearing, the circuit court denied the relief sought by the homeowners and entered judgment in favor of the HOA. According to the circuit court opinion, it found that the homeowners’ request, if granted, would result in the “Retroactive application of the new statute … [and] … results in an impairment of the contract between the HOA and the residents.” In so ruling, the circuit court determined that the statute “is to be applied prospectively, meaning affecting any newly created subdivision [homeowners association] who file original [covenants] after January 1, 2023. The Supreme Court reversed the circuit court holding that Section 442.404.3 applies to all covenants, including those in existence before the statute’s effective date. Although Mo. Rev. Stat. § 442.404.3 (2) allowed the HOA to adopt reasonable rules regarding the placement of solar panels providing, inter alia, such rules do not adversely affect the cost or the efficiency of the device, the rules adopted by the Granite Springs HOA did not meet this exception and the Court held in the homeowners’ favor on this issue as well.
Analysis
In addressing the circuit court decision, the Court reasoned that all statutes in Missouri are presumed to operate prospectively and that such a presumption “controls unless the legislative intent that they be given retroactive operations clearly appears from the express language of the Act or by necessary or unavoidable implication”, citing Lincoln Credit Co. V. Peach, 636 S.W. 2d 31,34 (MO.banc 1982). Thus, a statute is permitted to have retroactive effect but that under the Missouri Constitution Act.1, Section 13, it cannot be” retrospective in operation” See opinion, P4.
The Court then attempted to provide an explanation of the difference between the terms “Retroactive” and “Retrospective”. The Court then quoted a law review article, “Gregory J DeMars, Retrospectivity and Retroactivity of Civil Legislation Reconsidered, 10 Ohio N.U.L. Rev 253, 256(1983) which states that “A retrospective statute, like a retroactive one, operates backward, but unlike a retroactive statute, it attaches new future legal consequences to an event that occurred before the statute was passed”. According to the Court, Missouri case law has consistently held that” [a] law is retrospective in operation if it takes away or impairs vested or substantiated rights acquired under existing laws or imposes new obligations, duties, or disabilities with respect to past transactions” Id at page 6, citing Cedar Cnty Comm’n v. Parson, 661 S.W 3d766, 774 (MO.banc 2023).
Legislature Intent
After referencing existing law, the Missouri Supreme Court then considered whether the legislature intended, Mo. Rev. Stat. § 442.404.3 to apply to those covenants that were in existence prior to the effective date in addition to new covenants adopted after the effective date. In ruling in favor of the homeowners, the Court found that the four-month delay before the effective date of the statute was designed by the legislature to permit homeowners associations to (1) remove covenants limiting or prohibiting the installation of solar panels and/or (2) adopt reasonable rules that were envisioned by MO. Rev. Stat. § 442.404.3 (2). According to the Court, the delayed effective date served to provide notice to HOA’s so that such associations could adopt reasonable rules as contemplated by MO. Rev. Stat. § 442.404.3 (2) as the Granite Springs HOA attempted to do in the case before it.
Section 442.404. did not violate Article 1 section 13 of the Missouri Constitution
The next issue the Missouri Supreme Court considered was whether the clauses in the Missouri Constitution Article I, Section 13 prohibiting a statute from being “retrospective in operation” and /or “impairing the obligation of contracts” were violated by the retroactive effect of MO. Rev. Stat. § 442.404.
Here the Court held that the two terms are not mutually exclusive and such limiting phrases are analogous and overlap. In holding for the homeowners, the Court found that Section 442 404.3 applied retroactively. It also found that it did result in some impairment of contract but even assuming it was substantial, the public policy of the State of Missouri, i.e, promoting the use of solar power, serves a significant and legitimate purpose. It then observed that a different holding would prevent the legislature “from exercising it police powers in response to changing societal needs “ Id at 15.
The HOA’s Rule Prohibiting Street Facing Solar Panels Adversely Affects Cost or Efficiency
The final issue for the Court to rule upon concerned whether the Granite Springs HOA Rule, which prohibited street-facing solar panels, but otherwise allowed for solar panels, satisfied the requirements of Section 442.404.3 (2) which allowed for reasonable rules regarding the placement of solar panels so long as, inter alia, such rules do not adversely affect the cost or efficiency of the device. After reviewing the evidence presented by the homeowners in the circuit court, which the HOA did not dispute, the Supreme Court held in favor of the homeowners. In so ruling, the Court stated that the homeowners original proposed layout for the panels produced 11,492 kwh annually but that similar system on the non-street facing roof would produce only 8,741 kwh, a 24 % reduction. To achieve the same level of output as the street-facing proposal, the system size for the alternative system on the non-street-facing side would have to be increased by 32 percent and cost the homeowners an additional sum approaching $17,000. This additional cost and burden adversely affected cost or efficacy and cannot be enforced according to the Court. Id. at 17.
Conclusion
The Missouri Supreme Court clearly held that MO. Rev Stat. § 442.404.3 can have retroactive effect. Furthermore, the Missouri Constitution, Art 1, Section 13, prohibiting retrospective legislation and the impairment of contracts is not a barrier to statutes enacted by the legislature which serve a significant and legitimate purpose in the exercise of the state’s police power for the benefit of the general public even if it results in some impairment of private contracts.