Solar Panels – A Hot Conveyancing Issue
Solar Panels are everywhere, it seems.
If not ubiquitous then fairly ubiquitous.
You’ve no doubt seen solar panels on all types of roofs as you drive around the country, they’re even sprouting up in fields
We’re all encouraged to go green so a big hat tip to those using renewal energy from 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?
Could Solar Panels jeopardise the sale of your house?
Welcome to Chapter 21 of our Series, your Conveyancing Questions Answered All in One Place: Solar Panels
Will Solar Panels Cause a Problem When I Sell My House?
The answer to that question will depend on whether you bought your solar panels outright or leased them.
When bought outright there would normally be no issues, but there can be problems when you have leased.
Do You Need Planning Permission for Solar Panels?
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!
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) can Solar Panels for “free” in return for a Lease over the roof space. You as the Owner of the property will be entitled to 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.
The Feed in Tariff is a payment made to households or businesses generating their own electricity through the use of methods that do not contribute to the depletion of natural resources, proportional to the amount of power generated.
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 £15,000 to £25,000 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.
but, provided you have the necessary supplier guarantees and building regulation certificates and you purchased the Solar Panels outright – then full steam ahead.
Don’t get burned by your own Solar Panels!
Your Conveyancing Questions Answered – All In One Place
