Solar Panels are everywhere!
You see them on more houses, glistening across rooftops large and small. Energy efficient, a great relief for the environment and our bank accounts, solar panels are in. They are even appearing on cars now! But how does this affect the houses we buy and sell? How do solar panels work when it comes to real estate transactions? There are some key points you should be aware of as your client’s trusted real estate agent and advisor.
* Solar panels need to be addressed when writing an Agreement of Sale
First and foremost, the solar panels need to be addressed on the Agreement of Sale. The buyers need to be advised when there is a balance due for the payment of the solar panels and a plan for payment of the balance needs to be made. This information is crucial to the buyer at the time of signing the agreement of sale because they are assuming the balance of the payment of the solar panels.
If this is not addressed either by buyer’s assumption or seller’s payment in full there could be dire consequences. Without addressing the payment the solar panel company could reclaim their solar panels and, along with the panels, the cost of a roof replacement. Don’t leave this costly issue up to chance, make sure the payment is addressed and understood by all parties.
*Buyers should discuss assuming solar panels with their lender
If the buyers need to obtain mortgage financing to purchase their new home, the buyer’s lender must be informed of the solar panels. The buyer should discuss with their lender how the lender wants to handle this additional purchase and how the lender will handle this additional financing. Some lenders are hesitant to allow payments to be assumed because a solar panel lien is superior to a bank’s mortgage lien on title.
*Sellers need to contact their solar panel company
There are many different solar companies in the business and they all handle their contracts differently. The seller should contact their solar panel company to find out what their options are. Some will allow the contract to be transferred to a new owner and others will allow it with stipulations, like a pay down of the balance before a transfer can occur. However, some solar panel companies may require the balance be paid off in full prior to or at the time of settlement and will not agree to a transfer.
*Termination filing needs to be provided to the title company
If the buyer does not assume the solar panel contract and instead the seller pays off the balance due before or at settlement, there are important documents the seller must provide to the buyer’s title company to ensure settlement can take place as scheduled. If they are paying the balance off on the settlement statement the title company will need a payoff statement from the solar panel company. If the balance is paid off prior to settlement the title company will need proof of payment. Whether it’s being paid off before or at settlement the title company will also need written evidence of termination provided by the solar panel company. Usually, this is a termination agreement to be filed once they receive the payoff funds.
Your options for handling solar panels can seem complicated. Advising your clients so they can make the best decision for them can be tricky, but with Trident Land Transfer Company, LP by your side we will make sure you know what options the parties involved have and will work together to ensure a smooth transaction.
Contact your local Trident Land Transfer representative to learn more about Solar Panels and how they can effect your home’s settlement.