3-2-1 Real Estate Ready: Solar panels and the transfer problem

This week's three insights from me, two quotes from others, one question to carry with you...

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I.

If you own your panels outright, they're part of the house and this issue doesn't apply to you. If you lease them, or you're on a power purchase agreement, the panels on your roof belong to somebody else. That distinction sounds like paperwork. It's the whole story.

II.

Here's what surprises people. A leased system doesn't transfer with the deed. California has no law that moves it automatically. The buyer has to apply to the solar company and be approved, and that approval is completely separate from their mortgage. Which means a buyer can be fully qualified to purchase your house and still get declined on the panels. Add that the transfer often takes two to four weeks, that the monthly payment may count against the buyer's debt ratio, and that many leases have a clause giving the seller only days to buy out the remainder if the transfer fails. Buyouts run into the tens of thousands. That's the phone call nobody wants in week three of escrow.

III.

None of this is a reason to avoid a house with solar. It's a reason to start early. If you're selling, pull your agreement out of the drawer before you list. Find the transfer terms, the buyout figure, and how long the company says approval takes. Call them and open the file. Put the whole thing in your disclosure package so buyers see it up front instead of discovering it at week three. If you're buying, read the lease during your contingency period the way you'd read an inspection report, and start the credit application the day your offer is accepted rather than the week before closing. Solar isn't the problem. Timing is. Almost every deal I've seen wobble over panels wobbled because somebody opened that envelope too late.

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"The devil is in the details, but so is salvation."

— Hyman G. Rickover

"Whatever you do, work at it with all your heart."

— Colossians 3:23

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ONE QUESTION TO CARRY WITH YOU:

What's in the paperwork you haven't read since the day you signed it?

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Thanks for reading,

Samuel Vera

DRE #01911575

Vera Co Real Estate Team | Rapisarda Real Estate

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