Connecting North West business to relevant training, insight, conversation and each other
- Napthens Podcast
- Media Relations
- Newsletters & Updates
- Legal Glossary
Dealing with the sale of a property with solar panels
The installation of solar panels has spread across the nation's roof tops over the past few years. Householders have been tempted by the long-term free electricity and in some cases, an income generated from selling electricity to energy companies.
When selling a property with solar panels installed there is a large amount of information required to be obtained which any prospective buyer will need to be aware of:
For Estate Agents - questions that could be asked of the sellers at the outset:
- Are the solar panels owned outright or leased?
- Some home owners have paid outright for the panels and their installation, with a typical cost of around £10,000 plus. However, the majority of home owners have opted for a cheaper method, avoiding the expense of the initial payment. The panel providers will retain ownership of the panels and obtain a lease, usually for 25 years, on the roof and airspace above. The panel providers will install the panels for free. There is an attraction to the home owner that they will obtain free electricity for the long term, incurring no cost.
- Who will benefit from the Feed In Tariffs (FITs) after completion of the sale?
- Are the solar panels roof and wall mounted or standalone?
Obtaining this information at the very early stages of the sale will assist in the smooth running of the transaction.
Examples of information that may be required of the sellers by the buyer’s solicitors:
- If the solar panels are leased, there will be a standard 25 year term lease in place. The buyer’s solicitors will require sight of this.
- Details of any planning and building regulations consents that will have been required.
- Confirmation that any requirements of the seller’s mortgage lender were complied with.
- Confirmation as to whether there have been any breaches of the terms of the agreement.
- Details in respect of any payments made for the solar panels and who insures the panels.
In addition to the enquiries that will be raised by a buyer’s solicitors, any mortgage lender involved will also have their own requirements.
From a mortgage lender’s perspective, there is also a requirement that a lender will have the panels removed if they are adversely affecting the sale of a property.
It is extremely important that any homeowner selling a property is aware of the terms agreed in respect of the solar panels. Some terms are not acceptable to lenders and as such, will cause a problem when trying to obtain a mortgage secured against the property.
And…not forgetting the impact on marketability
Currently, valuers are waiting for the housing market to demonstrate whether buyers will agree to pay more for houses with solar panels, due to the savings on energy costs.
If panels are owned outright then any maintenance of them will fall on the homeowner. There will be an issue however, if the new purchaser does not want to take over the lease agreement. There will inevitably be costs associated with terminating a lease. Who will bear these costs - the seller or the buyer? This will be another issue to be dealt with during the transaction.
Therefore, any information that can be obtained from the seller at the initial stages of the process will be critical - to save precious time in the following weeks.
Any concerns? Just ask!
If you need any guidance or further information on this process, please do not hesitate to speak to a member of Napthens’ conveyancing team.