How to Avoid Problems with Leased Solar Panels When Selling a Home

roof of residential house with solar panels

Solar panels can be a great selling point. Studies show they can increase the value of a home as much as $15,000, and may be appealing to home buyers who want to save on energy costs or who are particularly concerned with the environment. While solar doesn’t appeal to all buyers, solar panels are a plus to many and may help houses sell faster. If you’re representing a seller of a home with solar panels, make sure you steer clear of one of the most common missteps with solar homes. 

The big question is who owns the solar panels:

  • Did the homeowner buy them outright? 
  • Are they still being financed? 
  • Or are they leased? 

Leased solar panels are very common. If it isn’t clear in your listing details  that solar panels are leased, a buyer may assume they’re included with the sale. 

Buyers need to understand the status of solar panels when purchasing a home. It may affect their offer or their ability to get a mortgage. In the case of leased solar panels, it likely requires a transfer of the lease. 

Not being clear about leased solar panels could cost you a contract — and lead to a lawsuit. 

Leased Solar Panels and MLS Listings

Let’s take a look at an actual example of a sale of a home with leased solar panels gone awry. 

Recently, an agent who represents a buyer of a home with solar panels contacted the CRES ClaimPrevent® Legal Team about the following:  the listing agent on MLS didn’t state that the solar panels on the unit were leased and implied the solar came with the unit. In addition, the transfer disclosure statement didn’t say that the panels were leased. The seller did note the leased solar panels in the Seller Property Questionnaire (SPQ), but the buyer didn’t sign it until after entering into the contract.  

The buyer believed the solar panels were included in the sale. 

In this case, the buyer wanted to complete the purchase, but they were very upset with the listing agent for what they considered misinformation. Upset buyers often lead to lawsuits. How do you avoid that — as a listing agent or as the buyer’s agent? 

Advice for the Buyer’s Agent

In this situation, we advised the buyer’s agent to call and email the listing agent about the MLS posting. The communication should focus on the fact the MLS listing suggested that the solar panels came free and clear with the unit. 

The buyer’s agent should also suggest that the buyers consult with an attorney about the issue. That’s because the SPQ  may give them the right to cancel the contract and get their deposit back, if they decide they don’t want to go ahead with the purchase. 

If the buyers decide to go ahead with the sale, they may need legal advice on issues related to the transfer of the lease. 

As always, documenting action is critical, and the agent should save all emails in the transaction file. 

In the future, the buyer’s agent may want to encourage the buyer to ask specifically if solar panels are leased. In the case of leased solar panels, the buyer will want to learn more about the reputation of the system provider, review of the warranty, and understand costs related to the leased solar panels.

Advice for the Listing Agent

  • Make sure you understand the challenges solar panels can present in a sale and what your selling clients need to know.  
  • Ask questions. The listing agent should confirm with the seller if there are solar panels on the property. If there is solar equipment, the listing agent should ask if they are leased solar panels. The listing agreement should confirm this status.
  • Be very careful with MLS listings. Make sure your listing doesn’t imply that the solar panels are part of the sale if they’re actually leased. Errors in MLS listings can lead to lawsuits, even if they’re accidental. 

Get Advice from the CRES Legal Team 

If you have a legal question related to solar panels, a problem with anMLS listing, or anything else, wouldn’t you be relieved to know you have access to free legal advice? CRES clients can call the CRES ClaimPrevent® Hotline 7 days a week and receive a response from an experienced attorney within 4 hours or the next business day. Every recommendation is confirmed in writing. It’s just one of the things we do to help clients prevent claims. 

What challenges have you come across when selling property with solar panels? 

This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.

Originally Published August 26, 2020

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