Introduction to Solar Panels
Solar panels have increasingly become more and more popular these days. We are becoming more “pro-environment” than ever before; and the installation of solar panels on our homes is a great way to show that support. There are many benefits of installing solar panels on your home, including that they provide a reliable source of energy, they potentially lower your energy bills, and they reduce your carbon footprint. But when it comes to buying or selling a home, solar panels can be problematic if the parties aren’t familiar with the process of transferring them.
As a general rule, most homeowners do not own the solar panel equipment; instead the equipment is subject to a long term lease with the solar panel company. Because the solar panel equipment is attached to the roof and not easily removed, solar panel companies want to ensure that they continue to receive payment for their leased equipment even after the property is sold. As a means of protecting their interest, the solar panel company will record a financing statement [lien] against the property in the Land Records. Much like a mortgage lien, this lien must be removed when the property is sold.Related Articles:
Before selling a home that has solar panels, be sure to call the solar panel company and inquire about their procedure for releasing the financing statement. They will likely advise you that you need to buy out the lease or ensure that your buyer is willing to have the lease transferred. Be sure to disclose this information to potential buyers so they know the ramifications of purchasing a home with solar panels.
Before buying a home that has solar panels, be sure that you have been provided a copy of the
solar panel lease, as well as the requirements for assuming the solar panel lease. In addition, you need to be sure that your mortgage lender is aware of this monthly lease obligation when
qualifying you for the loan.
Bottom line – before buying or selling a home with solar panels, be sure to do some research first.
This has been a guest blog by our friends at RGS Title Insurance. If you have any questions, drop a comment below or reach out to them directly! Thank you, Helen Dankos of RGS Title! If you have any other questions about your home, fill out our What's My Home Worth form below to learn more!