Solar Panels May Not Be As Advantageous As You Thought When Selling Your Home
Amanda Holden, Partner in our Residential Conveyancing team warns that conscientious homeowners wanting to reduce their carbon footprint by installing solar panels could encounter unforeseen difficulties when they come to sell their house.
In addition buyers need to be aware it might be difficult to get a mortgage on a property they have set their heart on with solar panels on the roof.
When solar power government incentives were introduced in 2010, start- up companies cashing in on these generous feed- in tariffs offered homeowners free installation and low energy bills in return for a 25-year lease of the air space above their roof. These companies then received the feed- in tariffs themselves for the period of the lease after which the ownership of the panels and roof returned to the homeowner who would then receive the feed- in tariffs themselves.
In 2013 the Council of Mortgage Lenders and the Building Societies Association introduced a contract for solar panel companies to enter into with stringent rules put in place to ensure that any damage to the property would be repaired. However anyone having solar panels installed in this way in those interim three years are not protected by this contract and may find it difficult to sell their home.
Installation costs have now gone down dramatically and so have the feed- in tariffs. These will in fact be abolished altogether for solar panels installed after 31 March this year. If you are hoping to get in quick with plans to meet this deadline then be careful that you are fully aware of what you are entering into. The 25-year leases are registered against the title to the property regardless of who owns it and you will have to find a buyer willing to take on the remaining years of any existing lease. Even if your buyer is happy their proposed mortgage lender may have additional requirements in this respect.
If you are determined to do your bit for the planet in this way then be sure to familiarize yourself with all of the implications. Your solar panel provider will need to obtain permission from your mortgage company to grant consent for the lease of the air space above your roof .
Even if you own your home outright then you should still seek legal advice before agreeing to such a lease otherwise you could be compromising your ability to sell.
If you would like to discuss any conveyancing matter in more detail please contact Amanda Holden on 0121 733 8000 or [email protected].
You can find out more about our conveyancing team here.