It has finally happened! A solar addendum. Arizona Realtors now have a standardized solar lease assumption addendum to use when writing purchase contracts on homes with solar leases. While it is far from perfect, it is a huge step forward to helping Phoenix area solar home owners protect themselves from the oversights and problems that has plagued solar home sales due to lack of disclosure and oversight in the lease transfer process.
New Arizona solar lease addendum designed to facilitate the transfer of a solar lease.
The first critical section that the new Arizona solar lease assumption addendum addresses is the responsibility of the seller to disclose the terms of the solar lease. Under the new solar lease addendum, the seller has the obligation to deliver to the buyer within 3 days after the contract is accepted by all parties 1) a copy of the solar lease, 2) any other solar related documents, usually items such as panel information, warranties, etc, 3) contact information to the solar lease transfer department, and 4) requires the seller to contact the solar lease transfer department of the pending solar lease transfer.
The onus of the solar lease transfer does is not solely the responsibility of the seller. Under the new solar lease addendum, the buyer has the responsibility to investigate the solar system as a matter of buyer due diligence. The buyer’s due diligence is the period of time (usually during the inspection period) where they have the opportunity to investigate the terms and conditions of the solar lease, verify performance, operation, cost, and savings, and ensure that the assumption of the solar lease agreement will not impede their ability to close on the sale of the home.
The solar lease assumption addendum does add an additional contingency to the purchase contract. With the new solar lease addendum, the buyer has the obligation to complete the lease transfer, including filling out applications and providing required personal information to the lease transfer department, no later than three days prior to the closing date. Should the buyer not qualify to assume the solar lease, the purchase contract can be cancelled and the buyer may be entitled to receive a full refund of their earnest money.
The new Arizona solar lease assumption addendum is a must include document to any purchase contract where the home owner has a solar lease system on the home. It is added protection for both the buyer and the seller while standardizing the process and expectations for all of the parties involved in the sale of the solar home.
