Key Documents You Need When Transferring Your Solar Lease
Within the transfer of your solar lease and the sale of your home, there are a variety of documents that you or one of the key players will need to procure, sign, or handle. These documents include:
Solar Lease Documents
You will want to obtain a copy of your complete solar lease, including all terms, conditions, and payment schedules. First, you need to know the terms and conditions that the lease will stipulate the transfer of responsibility including what criteria a buyer will need to satisfy in order to qualify for the lease transfer. Second, any potential buyer will want to know what their obligations will be under the lease before buying your home. Third, most contracts will require the solar lease to be included so that there is full disclosure to the buyer, the lender, and the escrow company. If you do not have a copy of your complete solar lease, most solar leasing companies should be able to provide you with one.
Solar Lease Transfer Paperwork
Besides asking for a copy of your solar lease from the solar leasing company, be sure to ask them for a copy of the solar lease transfer application. The transfer application is the form that the buyer fills out to find out if they are qualified to take over your solar lease. In some cases, the solar leasing company may want the buyer to call them directly in order to fill out the application over the phone.
Solar Marketing Material (Yes, something more than a copy of your utility bills)
The larger solar leasing companies usually have a variety of marketing materials that you and your listing agent can use in the marketing and sale of your home. These materials may include flyers on the simple steps to lease transfers, the benefits of having a solar lease, and booklets on how solar works. While most of these materials are general in nature, it should be a minimum step that your listing agent takes to promote your solar. On the other hand, system specific materials about your actual usage, production, and savings will give your buyer a greater understanding on how beneficial your solar system actually is and give them a greater degree of comfort and confidence that they are taking over a beneficial system rather than something that creates a monthly liability that they don’t want. A great article on how NOT to market a solar home can be found at:
http://www.solarhomebroker.com/how-not-market-solar-home-arizona/
Solar System Data Sheets
When the system was installed, the solar company should have provided copies of the panel information, solar inverter manuals, and other data sheets that detail the specifics of the solar system. Sometimes this information is available and a lot of times a little research online can yield the answers. As a listing agent, I look for this data to use in the marketing, especially if the system has higher than normal efficiency, low annual degradation of production, or extended warranties.
Utility Bills and Solar Production Data
The seller should provide the listing agent with a 12 to 24 month history of their electric bills. Furthermore, the seller should be able to download from the web the actual monthly solar production data for the last 12 to 24 months (though if it is not available, the listing agent should be able to accurately estimate the solar production of the system based upon the size of the solar array, the age of the system, the system azimuth, and other system data. As a listing agent, I can use this data to calculate actual savings, usage and production graphs for both on peak and off peak usage, and complete a variety of infographics and reports to illustrate the benefits of the specific solar system.
Solar Lease Contingency
The solar lease contingency is an addendum that you *must* include in the purchase contract of your home that obligates the buyer to take over your solar lease upon the purchase of your home, assuming that they qualify to do so. This contingency outlines the duties of the buyer and seller, spells out the timelines to apply for and transfer the lease, and is there to protect both the buyer and the seller. Arizona Realtors have a Solar Lease Addendum that we use in this type of situation. Without it in the purchase contract, the buyer does not have a contractual obligation to apply and transfer the solar lease into their name.
UCC-1 Filing
You may have heard that your solar leasing company places a lien against your home while they vehemently deny that there any such lien. While they are technically correct, most solar leasing companies do file a UCC-1 notice with the county recorders office indicating that they have ownership interest in the solar panels that sit on your roof. This document protects their ownership in the solar panels and equipment in the event that the home is sold or transferred through foreclosure to another party. While seemingly harmless, it is a filing that you will want removed since most mortgage lenders will require it to be removed prior to closing. Your escrow agent should be able to tell you if there is one filed against your home.
Selling a Home with a Solar Lease: