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Closing complications : Solar Panels

January 5, 2023 General

The sale of an existing home with solar panels will likely require extra planning and negotiation.  Most solar panels are installed under a lease agreement with a solar power company, many of which extend for a twenty-year term.  These lease agreements require monthly payments from the homeowner to the solar company, and are accompanied by a UCC financing statement which is filed on the land records.  In most instances, the solar companies finance the installation through large finance companies and may assign or transfer the lease to one of these companies after the installation is complete.  When you wish to sell your home, your buyer will need to agree to assume the lease, which would likely require a credit check and approval of the buyers mortgage lender since this will create another financial obligation for the buyer.  These types of terms are not often included in the standard contract forms that realtors utilize for single family homes.  You should speak to an attorney in advance of listing your home in order to be sure you are prepared to document these issues fully in your contract.  The installation of solar panels on your home may also impact home inspection and repair issues.  In the event your roof requires replacement, the solar panels will need to be removed and reinstalled.  Most roofing companies will not do this work, and the parties should factor in the additional time which will be required to have these extra steps performed by another party.  Whether you are buying or selling a home with solar panels, its important to inform your attorney of the existence of the solar panels and to obtain all relevant documentation early on in the process.