Hot Conveyancing Issues: Solar Panels

Update: this blog has now been updated, and you can view it here.

In this post we concentrate on another new entry into the TA6 :Solar Panels

“Ubiquitous Solar Panels”

Well not far off, ubiquitous:  you’ve no doubt seen solar panels on all types of roofs as you drive around the country.

We’re all supposed to go green so a big hat –tip to those using renewal energy form the sun via their very own roofs.

But, are there any particular problems you should be aware of before installing solar panels on your roof?

Will Solar Panels Cause a Problem When I Sell My House?

If you bought your solar panels outright there would normally be no issues.

No planning permission, subject to certain conditions, would have been required for the solar panels, although for a Listed Building you would have needed Listed Building Consent from your Local Authority. Good luck on that one by the way!

So, provided you have the necessary supplier guarantees and building regulation certificates and you purchased the Solar Panels outright - then full steam ahead.

The Bad News about Solar Panels when Selling your House

But, many solar panels were marketed on the “free” model by door to door salesmen.

The spiel would go something like this:

 “We (the Supplier) would install the Solar Panels for “free” in return for a Lease over the roof space. You the Owner of the property get free electricity “

The reason for such apparent largesse is that the Supplier gets the benefit of very generous Government tariffs, the so called “Feed In Tariff Scheme” which were  introduced in April 2010.

What is a Solar Panel Lease?

Generally, the Supplier would own the solar panels throughout the duration of the lease with an obligation to maintain them.

Usually a Lease was for a 25 year period with (in the best cases) a buy out clause to terminate the Lease earlier. These early termination charges could range from £15000 to £25000 or more depending on the size of the roof and years remaining on the Lease.

A potential problem may arise when you come to sell your house.

Unless you were able to buy out the Lease, the Buyer and perhaps more importantly any mortgage company would be reluctant to lend

Mortgage Problems with Solar Panels

The Council for Mortgage Lenders has issued Guidance in respect of Solar Panels.

The CML states that:

Lenders support the principle of green energy initiatives, but want to ensure that solar panel leasing agreements do not adversely affect the value or marketability of the property. Ensuring compliance with the CML’s minimum requirements should reduce the chance of a borrower encountering problems in trying to sell or remortgage the property, or in carrying out repairs and maintenance

 [The CML] advises borrowers to include their lender in the discussions with the panel provider from an early stage. That should enable any security or valuation issues to be addressed before signing a lease agreement.”

Why You Should Contact Your Conveyancing Solicitor About Solar Panels Before You Sell Your House

You may have nothing to worry about, but it would be advisable to contact your Conveyancing Solicitor at the earliest stage to check any Lease you may have entered into – even before you have put your property on the market for sale.

It make sense to take such precautions to avoid any hold ups when you find a buyer for your property.

Don’t get burned by your own Solar Panels!

Paul Hajek