Home sellers facing solar panel burden

Tue 2nd Feb 2016

An estimated million UK homes now have roof-top solar PV panels, many obtained through a lease. But what happens if you took advantage of one of these schemes and now want to sell your home? Coodes’ Partner and Commercial Property lawyer Kevin George outlines some of the issues.

“Over the last few years, huge numbers of people have been tempted by schemes promising free electricity in return for a solar installation on their roofs. Many people signed up on the doorstep, without seeking legal advice. While numbers of new installations are now dwindling as a result of subsidies being cut, we are now seeing the impact of these schemes on house sales. What seemed to be a benefit is, to some people, now becoming a burden.

“At Coodes we are advising an increasing number of clients who want to buy or sell a house that is tied into such a lease. Unfortunately, the issues with some leases are causing some house sales to be delayed or fall through entirely.

“Most schemes involve leasing your roof to the solar panel business over a period of 25 years. In the event that you sell your property then the lease will transfer to the new owners – and with it, a series of obligations. The contracts vary, but unfortunately they are all biased towards the businesses.

“In most cases obligations are placed on the owner of the building not to alter, rebuild or renovate any part of the roof and to maintain the integrity of the roof, which includes not permitting trees or other plants to grow on the roof. Likewise there should be obligations placed on the company to make good any damage caused, to manage and register the system and keep it in good repair and to comply with all statutory obligations. There should also be an obligation for the company to insure the system.

“It is highly likely that a lease of a roof space will create what is known as a ‘protected business tenancy’. This means that if the property owner wants to be sure to gain possession of the roof space at the end of the lease, various procedures will have to be followed. The solar panel company will probably also be granted easements, which give them access to the roof to carry out repair works.

“As well as there being issues with what is in these leases, there are problems with what is not in them. For example, there is no provision for bringing the lease to an end if the company is insolvent.

“If you are preparing to sell your house and want to rid yourself of the burden of a lease, it may be that you can terminate the contract early, by paying a capital sum to buy out the panels. This option is worth investigating, but can be costly.

“I would strongly recommend that you get your lease reviewed by a legal expert now–at the very least to get a better understanding of what you originally signed. I have persuaded some solar panel companies to change aspects of a lease, so it is worth getting legal advice to see what can be done. It is better to do this now than to risk delays and stress when you want to sell your house.”

For more information on this issue, please contact Kevin George of Coodes on 01579 347600 or kevin.george@coodes.co.uk

Tue 2nd Feb 2016

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