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There's another forum I used to frequent that had an awesome "beating a dead horse" emoji that would be really useful right now. Seriously . . . we all get it. You have a completely irrational hatred of all real estate agents. Personally, I don't trust insurance adjusters but that's a story for another time.
In this situation the solar company is out of business though. So, at the end of the lease you'd probably just be left with the panels. Highly doubtful someone would be coming to take them away. I'm not saying assuming the lease is a good idea. Just saying this is a somewhat different situation than what you went though.
That's a good one!
Solar leases are rarely a good idea. Typically, the leasing company gets all the tax incentives too. If they came with the house, i would take them. If I personally, would not agree to assume the lease especially this one which sounds like a particularly bad lease.
The fact that the leasing company is out of business would make me want to assume this lease even less. Solar leases are BAD in general. I have one client who's wrestling with one now.
Years ago this client leased panels for his house. Unfortunately, some squirrels decided to nest under them one winter and chewed up all the wires ruining about half the panels. He called the leasing company to have them fixed and they gave him the run around for at least a year. Then he called one day to follow up, only to find his lease had been sold to another company and he had to start the battle over again. This happened a couple of times. Finally, he decided to just buy out the lease to the tune of $16K only to throw out half the panels and combine the remaining ones into a single array. Pretty terrible that he paid so much money for 50% useless junk so that he could have the privilege of throwing it away.
So, they did disclose the presence of the lease up front. This would have raised a serious red flag for me. Why did your agent not inquire about it? It would have been great if they had offered more info up front, but there was enough of a red flag in the disclosure where you and your agent should really be shouldering some of the blame for this situation occurring.
I have no idea what the laws are in your area, but around here I could advertise it as a feature so long as I disclose that it's a lease which the buyer would need to assume which it sounds like this seller did that.
Maybe things are fishy. Maybe they assumed you saw the disclosure and were cool with assuming the lease. A lot of people in the current seller's market are agreeing to things they would not agree to in a more balanced or buyer friendly market. Again, I think that should have raised a red flag and should have kicked off some investigation up front before the offer was made.
Asking the seller to pay off the lease is what I would do. Why would you want to pay $30K for old panels when you could have brand new ones for that much or less? I would only assume the lease if I was absolutely desperate to have the house.
In my opinion the realtors may have some culpability. The disclosure was ambiguous/silent about assuming the lease, and, generally speaking, ambiguity is construed against the drafter. Given you are paying $100,000 over list price, and presumably the realtors stand to lose out, I would put it in the realtor(s) court to negotiate a financial resolution with the sellers.
Last edited by Maddie104; 09-02-2021 at 08:20 AM..
I suspect the filing with the county has to do with the lien that the solar company has on the house. Not sure though.
That's what I'm thinking. I've never heard of a lease being recorded as a lien but real estate laws work differently in different states.
Quote:
Originally Posted by Maddie104
In my opinion the realtors may have some culpability. The disclosure was ambiguous/silent about assuming the lease, and, generally speaking, ambiguity is construed against the drafter. Given you are paying $100,000 over list price, and presumably the realtors stand to lose out, I would put it in the realtor(s) court to negotiate a financial resolution with the sellers.
There was definitely a disclosure made and if I were the listing agent I definitely would have personally provided more information. It's not uncommon to see a disclosure of "buyer to assume solar panel lease of $161/month" around here and I think relaying the cost is an important part of the disclosure but even without providing it you've still disclosed.
This being said, any agent worth their license who saw this disclosure should have known enough to ask some follow up questions. Also, if you're a buyer and you see something you don't understand in a disclosure and you don't ask someone about it then IMO you carry some responsibility as well.
IMO, there were a lot of people who share blame in this scenario. There was a problem and then people failed to deal with it which made it worse.
That's what I'm thinking. I've never heard of a lease being recorded as a lien but real estate laws work differently in different states.
There was definitely a disclosure made and if I were the listing agent I definitely would have personally provided more information. It's not uncommon to see a disclosure of "buyer to assume solar panel lease of $161/month" around here and I think relaying the cost is an important part of the disclosure but even without providing it you've still disclosed.
This being said, any agent worth their license who saw this disclosure should have known enough to ask some follow up questions. Also, if you're a buyer and you see something you don't understand in a disclosure and you don't ask someone about it then IMO you carry some responsibility as well.
IMO, there were a lot of people who share blame in this scenario. There was a problem and then people failed to deal with it which made it worse.
Two things:
I stated the realtors may bear some culpability. Most importantly, the question is who bears the burden of "full disclosure." The seller had knowledge that the loan would need to be assumed and the listing agent should have known, so why wasn't such a material matter disclosed? I am not a lawyer but I do not believe the disclosure burden was met.
Then the practical question is do the realtors want this deal of $100,000 over list to fall apart over this? It has already been on the market for three months I believe.
It seems to me the OP should consider these questions before she decides the best course of action.
Last edited by Maddie104; 09-02-2021 at 11:29 AM..
Mike that is true, that we were ignorant as buyers. Now we know. I took the 3 day crash course on these solar leases and now we know. But we knew nothing of solar and lease vs own when we looked at the house.
The disclosure says "Solar panel lease installed in 2013 from ASD direct" and that's it
Then we were given a form with no heading on top other than "Assumption of lease" Attached to that form was the first page of the seller's contract with this solar company and it just says that payments are $161 a month
So this is one of those scenarios where you think you understand but you don't. We were told that we'd have to continue paying the 161 but we'd save on the electric end.
It wasn't until I tried calling the solar company to set up an account with them that I found out they are a debt collector. Then I went back to my agent, she went to the sellers to ask and then came back and told us of the debt.
Still nobody explained the lease thing. I did all of my own research on that part.
So I feel like at the very least, my agent should have said "Hey let's look into this lease. I know there are some not so good deals out there with solar" And one could say that maybe my agent who's been doing this 20 years has never come across this, but in the beginning she told us she has. She said she's sold homes with these panels and made like it's no big deal.
So unfortunately the words solar lease didn't raise any flags for us because we knew nothing about them. But boy do I know now!
I stated the realtors may bear some culpability. Most importantly, the question is who bears the burden of "full disclosure." The seller had knowledge that the loan would need to be assumed and the listing agent should have known, so why wasn't such a material matter disclosed?
Then the practical question is do the realtors want the deal to fall apart over this? It has already been on the market for three months I believe.
It seems to me the OP should consider these questions before she decides the best course of action.
I don't think anyone wants to lose the deal. We do love the house. You are correct it was on the market from May to August until we made an offer. You would think the sellers would be more willing to pay their debt but I think they are in denial over their bad deal. But I'll never love anything so much that I'm willing to go blind into a bad deal. But sellers are fixed on us paying the 10k because if we don't, according to their agent we "are getting free solar".
Well it's not free if I'm getting into a big headache.
So course of action now is 1)we want the contract they signed 2) we want to see 12 months of electric bills and 3) I called a company to come out and do some kind of assessment on the panels to see if they are working properly.
They are called Stellar Solar and they mention that they service ASD panels. They won't honor a warranty but they will service them. So far no other company will come out other than to sell us new panels.
If a house has been on the market for 3-months, why would you offer $100K over list?
We have Solar with a Power Purchase Agreement, similar to a lease. 20-year contract. I would never do it again. We tried to buy it out, but they want some crazy price. Solar has changed so much in a few years that we can get a system about 2x the size for probably 1/2 the cost.
So, unless they pay off the lease and you know what it will take to have them removed, I wouldn't do it, no matter how much you want the house. We recently were getting a HELOC and our company was bought out by another, it took an extra 3 weeks to get it done because they were such a pain.
Thank you all again! We have asked the seller to provide his lease contract. We need to see the entire thing. We also want to see a few months of utility bills.
They are now asking us to pay for 1/3 the balance of the lease which would be 10k. We don't want to pay anything.
Also to cancel the lease, this debt collector told the seller they need to file with the county which can take 14 business days. I wonder what this has to do with the county?
so closing will be delayed for sure. But we had to give the seller a 29 day free rent back anyway. So it's not like we were getting in the house until October anyway.
I can't believe what a mess so many of these solar lease deals are! And to think nobody mentioned this huge balance on the account to us!
I'm reading so many stories of buyers who are way into the closing process only to find this stuff out.
I'd counter that $30K of proceeds will be placed in an escrow account for the payment of the lease. But that's just me.
It is excellent advice! But he won't go for it! They want us to pay that $8,000 of their debt.
These sellers are in total denial of the solar lease shams of the past decade. All they'd have to do is google it. I've made plenty of bad decisions in my life. Just own it and pay for it. I paid for mine. I'm not paying for his.
From what I'm reading it's actually bordering on being illegal what they are doing. I'm not sure though. Not that we'd sue. Just walk away. But from what I read with these leases, at closing they are treated completely separately from the sale of the house. No different than if I bought the house and took over the seller's car lease payments. Separate transactions.
So while a seller can ask the buyer if they want to take over the lease, the buyer can say no. And that should not affect the sale of the house and the accepted offer. Except with us it is affecting it! We are being made to feel like if we don't pay for this lease, the deal is off.
The lawsuits behind these leases is why I'm reading so many agents tell sellers to pay them off before selling or disclose it right up front before an offer is even made. They don't want any drama around these leases. And yet we somehow end up with both seller's and buyer's agent who are acting like it's their first day with this. I know more about solar leases than they do at this point.
ChrisCD, we were duped into making a higher offer because we were told of this sudden offer than came out of the woodwork. These invisible buyers were going to snatch up the house if we didn't give best and final offer. We got snowed on that part, I'll admit. I won't do that again on a house that's been sitting that long.
It is excellent advice! But he won't go for it! They want us to pay that $8,000 of their debt.
These sellers are in total denial of the solar lease shams of the past decade. All they'd have to do is google it. I've made plenty of bad decisions in my life. Just own it and pay for it. I paid for mine. I'm not paying for his.
From what I'm reading it's actually bordering on being illegal what they are doing. I'm not sure though. Not that we'd sue. Just walk away. But from what I read with these leases, at closing they are treated completely separately from the sale of the house. No different than if I bought the house and took over the seller's car lease payments. Separate transactions.
So while a seller can ask the buyer if they want to take over the lease, the buyer can say no. And that should not affect the sale of the house and the accepted offer. Except with us it is affecting it! We are being made to feel like if we don't pay for this lease, the deal is off.
The lawsuits behind these leases is why I'm reading so many agents tell sellers to pay them off before selling or disclose it right up front before an offer is even made. They don't want any drama around these leases. And yet we somehow end up with both seller's and buyer's agent who are acting like it's their first day with this. I know more about solar leases than they do at this point.
ChrisCD, we were duped into making a higher offer because we were told of this sudden offer than came out of the woodwork. These invisible buyers were going to snatch up the house if we didn't give best and final offer. We got snowed on that part, I'll admit. I won't do that again on a house that's been sitting that long.
Do they want to add it as a part of the house purchase? Then it becomes the base value of the house for your tax purposes - meaning that that you actually overpaid $108K to get that house. Appraisal would matter.
The agents get commission on that too.
Do they want you to write them a check fo $8000? Then it is a gift?
I know you like the house, but maybe this pre-closing difficulty is a warning sign from the fate that the house is not for you and something not good could happen - when something so simple is becoming that difficult- maybe start looking elsewhere?
Sorry for the mystical reading!
I wouldn’t budge and demand they remove the panels, fix the roof and settle the lease before closing- like Jonov suggested with escrow- however- you would not know what other potential charges- you need something from the leasing company in writing- could it be more than $30K? Penalties, termination, late interests fees?
The appraisal wouldn’t be able to tell you anything about the state of the panels, the quality and the safety of the system, etc- you need an independent specialist - the guys who agreed to service your panels may be happy to “maintain “ - but it would cost you an arm and a leg to service this system?
And may result in them telling you it is time to put new panels? Another sale for them?
What a mess.
Have they shown you their electric bills? In some states it is a requirement pre-sale. How many kilowatts are they using per month and what the panels contribution?
Does the utilities company charge fees or pays them for extra electricity?
Do they have other utilities like propane or gas too?
How much your family is usually using? Could you even benefit from these panels? Sounds like a pain money non-withstanding
Last edited by L00k4ward; 09-03-2021 at 05:18 AM..
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