Solar system lease – don’t let it derail your sale/purchase


solar panelWith increasing electricity bills, it does not come as a surprise that the number of solar system installations has increased drastically in the past few years. Most of the systems are possible with little or no up front cost to the home owner due to long-term lease agreements and tax credits. With the lease of the solar system comes a so called fixture filing that will show up on a title search as a so called UCC-1 filing. While the fixture filing attaches to the solar system, not the real estate itself, most lenders will consider the fixture filing equivalent to a lien on the real estate and they will not agree to provide a loan on the property. This can cause problems if the seller wants to refinance or sell to a buyer who needs a loan to purchase. Some solar companies will agree to remove the fixture filing temporarily to facilitate the refinancing or sale of the property, others will not agree.

There are lenders that will provide financing, but they will require a substantial down payment (i.e., 25% or more) which will in most cases affect the buyer pool.

Contact us before you list your home for sale. We can help ensure a smooth transaction by taking the steps necessary to work with the solar company. Also feel free to contact us if you are considering installation of a solar system. We can help you make an informed decision that you won’t come to regret in the future.

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