The summer is coming and with it our ever shinning sun! Many people jumped on the solar panel band wagon to save money by using the power of the sun. We have found that it takes just as much power to transfer title for the leases on some of these solar panels.
As an investor when you are buying homes, be cautious of some of the pitfalls of solar panels. Solar panels exploded a few years back and many companies opened that really had no business being in business. When you buy a home with a solar panel lease it is the seller’s responsibility to get you all the paperwork you need to transfer the lease into your name. If they fail to do so you may find some strangers ripping the panels off the roof one day. If the panels are leased they are the property of the owner even though they are attached to the home. You should never remove them on your own because any damage that you might cause to the panels could be costly.
We have had instances where the seller could not find the party responsible for the lease because the company they are leasing from went out of business. The best place to start is the city as they have been buying up the leases or taking them over for consumer protection. The title company can assist in prorating any lease payments if they are directed to by the parties with in the contract. The title company is not responsible for transferring or paying off the panels as it is the seller that needs to get the payoff info to the title company or assist them in obtaining the needed information. Many times, unless it is disclosed in the contract your Escrow Officer will not even know the home has solar panels as there are rarely any recorded instrument on the property. There may be a UCC filed or recorded but we find this practice to be few and far between.
Be sure when you are negotiating on a home with solar panels you make it clear in the contract that there are panels and who is responsible for costs, etc. Sometimes the parties get so frustrated trying to get the lessor to cooperate that they want to rip the panels off and drop then at their door. Just keep in mind that the seller has signed a contract for the lease and everyone one I have seen indicates damage to the panels is their responsibility so please just push them to get you what you need.
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By Jill Bright, AVP/Sr. Sales Executive Chicago Title