Thursday, 29 March 2012

Solar panels could make your property difficult to sell


Solar panels may be associated with green issues but beware as they might be viewed as a red card when it comes to re-mortgaging your house or when looking to purchase a property with a mortgage where solar panels are fitted .  This is according to an article recently appearing in the Guardian.

Guardian Money reported on a Southampton couple who were refused by several companies when they tried to re-mortgage their home. The couple had previously agreed, with their lenders permission, to allow a firm to install solar panels on their roof for the duration of a 25-year lease.  They now face the prospect that their property has become ‘unsalable’.


The owners are reported to have said:


"We signed up to this scheme on the basis that we were doing the green thing, but it has turned out to be a nightmare," says John, who works as an air traffic controller.


The implications for us are that we cannot re-mortgage our house on a lower interest rate. We would still have a mortgage but one on the standard variable rate which will increase with the Bank of England interest rates.


We are extremely concerned that we will not be able to sell our house as no buyer will be able to get a mortgage on it. We can't be the only people in this position, can we?"


The big question is how many more home owners are there out there who are oblivious to this potential problem.  Solar leasing deals were heavily marketed last year by companies  looking to take advantage of  Government backed incentives to  those with solar PV panels on their roofs.


The most credible companies advised their customers to seek their lenders agreement, but many didn't.


The issue does not affect those who paid for their panels to be installed. It only relates to those installations undertaken under a lease arrangement.


One can only surmise as to why lenders are struggling to come to terms with these arrangements.    They may be concerned that if they have to repossess and sell quickly there could be a problem in finding someone to purchase the property where there is lease with financial obligations to take on.   This is because the leasing arrangement for the panels follows the property and not the owner who installed the panels. The lease company will only remove the panels if the lender can show it has tried and failed to sell it.


The article suggests having contacted the Council of Mortgage Lenders that the  issues which have begun to arise  may be down to  a failure on the part of the banking sector to formulate a clearer policy on solar panels and how these cases should be approached.


This reported case should however send out a warning to those looking to install panels under a leasing arrangement and also to those acting for those looking to purchase a property where an arrangement exists.   Time will tell whether those homeowners who have sought to reduce their energy bills in line with Government advice and encouragement will be left with problems in selling their property at  market price.  

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

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