This seemed like a good time to post a message regarding Solar Panels and the real estate transaction! Whether or not the seller owns or leases these energy savings panels is an important factor in the contract negotiations between buyers and sellers. In order to assist in the facilitation of this discussion/negotiation you may wish to review the tips below.
1) Listing agents: When listing a property with solar panels ASK the seller if they are owned or leased.
a. If the solar panels are leased request a copy of the lease agreement.
b. Provide the lease agreement and the terms of the agreement to the buyer by way of an attachment to a counter offer or contract addendum.
c. Amend Paragraph 8 “Items Included In And Excluded From Purchase Price” of the Residential Purchase Agreement to state that the seller does not own the solar panels.
d. In addition, include verbiage that requires the buyer to both qualify for (within the timeframe specified in paragraph 14B of the Residential Purchase Agreement) and to assume the existing solar panel lease agreement unless otherwise agreed in writing between the parties.
e. Advise the seller that the buyer may ask for a price concession equaling the remaining balance on the lease OR ask that the lease be paid off.
2) Buyer’s agents: When selling a property with solar panels ASK the listing agent if they are owned or leased.
a. If the agent says they are owned include language in the purchase agreement requesting proof of ownership.
b. If the agent says they are leased include a request for a copy of the lease agreement as a term/condition of the purchase agreement.
c. If leased the buyer should provide the lender with a copy of the lease to determine whether or not the payments will affect the buyer’s debt/income ratio.
d. Buyer should be advised to contact the leasing company to determine what, if any, steps need to be taken in order to qualify for the lease.
e. Buyers may wish to negotiate a lease pay-off as a condition of the purchase agreement or some other concession.
3) The buyer should contact the leasing company directly for additional information. For example: (i) “In the event wood pest fumigation is required and should the integrity of the solar panels be compromised would warranty be negatively impacted?” (ii) “Will the leasing company inspect the panels prior to close and after the fumigation to insure everything is in good working order?” (iii) “If there is damage to the solar panels, who is deemed the responsible party for necessary repairs/replacement?”
Asking questions gets to the truth, getting to the truth makes for a smoother transaction; smoother transactions mean happier clients and agents!