Solar Panel Leases
Many people don't really think about solar panels when they buy a home. Homeowners who like the idea but can't afford to pay upfront the installation costs choose to lease them over a period of time. Sometimes during this period of time, the homeowner puts their home up for sale and that can open a can of worms.
Why am I bringing this up? A) In Southern California it's really popular and it's slowly creeping up here to Northern California. and B) The new residential purchase agreement (RPA) just added new verbiage to address this issue. It gives the seller 7 days to make the disclosure and provide any paperwork necessary to assume/cancel the lease to the buyer.
What are the issues? One of them is that the seller needs to transfer the lease to the buyer upon sale of the home or cancel it. If the buyer doesn't qualify for the lease or doesn't agree to the terms, trouble starts. I've heard a seller pay $50k+ in cancellation fees because they didn't look at the fine print and agreed to pay for the cancellation costs. Others have had solar companies place mechanic liens on the homes until the final lease payment is made. If a mechanics lien is the #1 lien on a property and not the mortgage loan, most lenders will not lend on the property. This adds an extra bump in the transaction process.
Great NPR article about this made over the summer--
Why am I bringing this up? A) In Southern California it's really popular and it's slowly creeping up here to Northern California. and B) The new residential purchase agreement (RPA) just added new verbiage to address this issue. It gives the seller 7 days to make the disclosure and provide any paperwork necessary to assume/cancel the lease to the buyer.
What are the issues? One of them is that the seller needs to transfer the lease to the buyer upon sale of the home or cancel it. If the buyer doesn't qualify for the lease or doesn't agree to the terms, trouble starts. I've heard a seller pay $50k+ in cancellation fees because they didn't look at the fine print and agreed to pay for the cancellation costs. Others have had solar companies place mechanic liens on the homes until the final lease payment is made. If a mechanics lien is the #1 lien on a property and not the mortgage loan, most lenders will not lend on the property. This adds an extra bump in the transaction process.
Great NPR article about this made over the summer--
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