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We purchased a home a few months back that had leased solar. This was disclosed to us but we did not sign the lease transfer because of a combination of things, primarily the usage rate was extremely high (50% more than local utility) AND communication between the leasing company was significantly delayed due to holidays. There was no lien associated with the property and as far as we know, no contingency that we need to assume the lease.
The seller is claiming we breached the purchase contract. As far as we know, this lease is completely separate from the house contract (how else could we close??) and it should be a matter the seller has to deal with. Does the seller have any recourse here?
We purchased a home a few months back that had leased solar. This was disclosed to us but we did not sign the lease transfer because of a combination of things, primarily the usage rate was extremely high (50% more than local utility) AND communication between the leasing company was significantly delayed due to holidays. There was no lien associated with the property and as far as we know, no contingency that we need to assume the lease.
The seller is claiming we breached the purchase contract. As far as we know, this lease is completely separate from the house contract (how else could we close??) and it should be a matter the seller has to deal with. Does the seller have any recourse here?
You are asking people who haven’t seen any of your contracts or the contracts with the solar company. I would take all of your paperwork and seek the advice of an attorney.
Oh man, this sounds tough. Some of these solar companies actually put liens on your property depending on the type of situation. Definitely talk to an attorney to see what your options are.
Oh man, this sounds tough. Some of these solar companies actually put liens on your property depending on the type of situation. Definitely talk to an attorney to see what your options are.
Agreed - Lawyer time. The laws and contracts vary from state to state (and sometimes within states) It might also be worth contacting your state consumer affairs office (sometimes under the Attorney General)
We purchased a home a few months back that had leased solar. This was disclosed to us but we did not sign the lease transfer because of a combination of things, primarily the usage rate was extremely high (50% more than local utility) AND communication between the leasing company was significantly delayed due to holidays. There was no lien associated with the property and as far as we know, no contingency that we need to assume the lease.
The seller is claiming we breached the purchase contract. As far as we know, this lease is completely separate from the house contract (how else could we close??) and it should be a matter the seller has to deal with. Does the seller have any recourse here?
You have all the documents, so read them.
Either the solar lease has been recorded in your chain of title or it hasn't been. If it was recorded, you're liable for the despite not signing any lease transfer (although it should been disclosed if you had a title search and/or a title insurance). You bought the house subject to any existing title impediments.
If the lease was not recorded, then you may not have lease liability, but I fully expect that the solar company has the authority to remove all of their equipment. They may or may not have have the responsibility of restoring the property after the equipment is gone, or to complete any electrical work needed to return to utility service.
I suspect you will end up litigating with some or all involved parties.
Most solar companies file a UCC lien on homes. It isn't an actual lien in the house like a mortgage, but more comparable to a mechanics lien. Normally it needs to be cleared at closing.
Did you get a title commitment and title ins policy on the house? Look at your title commitment under Sched C.
I would be contacting the title co and asking about it. If they don't provide the info you need, have a consultation with a real estate atty.
The solar companies lie to get people to get solar. They say their is no lien on the house, but that it a lie. It's not a 2nd mortgage but it is a lien.
Either the solar lease has been recorded in your chain of title or it hasn't been. If it was recorded, you're liable for the despite not signing any lease transfer (although it should been disclosed if you had a title search and/or a title insurance). You bought the house subject to any existing title impediments.
If the lease was not recorded, then you may not have lease liability, but I fully expect that the solar company has the authority to remove all of their equipment. They may or may not have have the responsibility of restoring the property after the equipment is gone, or to complete any electrical work needed to return to utility service.
I suspect you will end up litigating with some or all involved parties.
The solar lease is not attached to the house at all, there is nothing related to it on the title. No liens. We have to sign a transfer contract with the solar company before it can be legally tied to us. The solar lease document recommends the seller to make solar lease assumption a contingency of sale, and I don't see that on the contract. This lease is a personal lease (not tied to the house) between the solar company and the seller, and the panels are owned by the solar company.
I read all of the documents and it is unclear if they can claim we breached the purchase contract. Can they even claim that months after the close of escrow?
There are some grey areas on CAR form RPA-CA related to solar leases, but I don't see any writing that says we absolutely have to assume the lease, just that we have to read the disclosures. See below
LEASED OR LIENED ITEMS AND SYSTEMS: Seller shall, within the time specified in paragraph 14A, (i) disclose to Buyer if any item or system specified in paragraph 8B or otherwise included in sale is leased, or not owned by Seller, or specifically subject to a lien or other encumbrance, and (ii) Deliver to Buyer all written materials (such as lease, warranty, etc.) concerning any such item. Buyer's ability to assume any lease, or willingness to accept the Property subject to any such lien or encumbrance, is a contingency in favor of Buyer and Seller as specified in paragraph 14B and C.
Also on form "STATEWIDE BUYER AND SELLER ADVISORY" there is this note:
SOLAR PANEL LEASES: Solar panel or power systems may be owned or leased. Although leased systems are
probably personal property, they are included in the sale by the C.A.R. purchase agreement which also obligates the
Seller to make a disclosure to the Buyer and provide the Buyer with documentation concerning the lease and system.
Leasing companies generally secure payments by filing a UCC-1 (a Uniform Commercial Code form giving notice of
a creditor's security interest) against the property. Buyers are given a contingency right to investigate the solar related
system and documentation and assume any lease. Assumption of the lease may require Buyer to provide financial
information to the leasing company who may require a credit report be obtained on the Buyer. Should a solar panel
or power system be on the Property, Buyers should determine if the system is leased or owned. Buyers willingness to
assume any such lease is a contingency in favor of Seller. For more information, Buyer may request from Broker the
C.A.R. Legal Q&A titled: “PACE Programs and Solar Leases”. Brokers do not have expertise in this area.
Last edited by shoot2thrill; 06-19-2021 at 12:53 PM..
Most solar companies file a UCC lien on homes. It isn't an actual lien in the house like a mortgage, but more comparable to a mechanics lien. Normally it needs to be cleared at closing.
Did you get a title commitment and title ins policy on the house? Look at your title commitment under Sched C.
I would be contacting the title co and asking about it. If they don't provide the info you need, have a consultation with a real estate atty.
The solar companies lie to get people to get solar. They say their is no lien on the house, but that it a lie. It's not a 2nd mortgage but it is a lien.
There are no liens on the house and none of this was brought up at closing because the title is clean.
Even if you weren't fully advised about the solar lease I don't think you have an easy out. Kind of like buying a home in a HOA without being fully disclosed by the listing agent or owner. You would still be held to the community rules and/or dues of the HOA. You might have grounds to go after the seller or listing agent after the fact but not likely to exempt you from the commitment. The best advice was offered, lawyer up and don't assume anything at this point.
Personally, I think the OP didn't complete their due diligence and refusing to sign a solar lease means very little in the grand scheme of events. Only my $.02 worth, take it for what it is worth. I am not a lawyer and I don't play one on television.
I hope the OP keeps the community updated after speaking with an attorney.
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