RECENT figures show that the South West is the nation's leading area for homes with solar panels. The number of properties with solar panels on the roof is increasing all the time. This raises a number of issues for prospective purchasers to consider.
The first thing to check is whether the panels are owned by the seller or installed by someone else with under a lease or licence. Even if they are owned by the seller, the buyer needs to check whether they are subject to a financing agreement such as hire purchase or the Green Deal.
The second issue to check is whether the seller intends to remove the panels prior to vacating the property and, if he does, what the arrangements will be to ensure that any damage caused by the removal of the panels will be made good by him.
If the roof space has been leased out to a solar panel provider it is essential that the seller provides a copy of the lease to the buyer's solicitors. The buyer will need to establish whether the property owner is to receive any Feed In Tariffs generated by the solar panels or whether these are received by the "rooftop lessee".
Whether the seller owns the panel outright or otherwise, the buyer will need to know if the panels are likely to affect the structural integrity of the building or the ability to repair the roof.
Obviously questions need to be asked about the level of electricity generated by the panels and the cost savings. Details of any Feed In Tariffs receivable will also need to be checked.
A buyer should also check the state of repair of the panels, their expected life span and whether there are any warranties or guarantees available which can be transferred to the buyer.
Questions need to be asked about the outstanding balance of any loan or hire purchase. This might need to be transferred over to the buyer unless the seller is to pay off the loan using the proceeds of the house sale.
Rooftops which are leased to a solar panel provider (usually in return for the installation of the solar panels free of charge) can cause particular problems. The first thing to check is the extent of the airspace leased to the provider. The extent of this may prevent extensions into the roof and it might be difficult to carry out repairs to the roof without infringing the terms of the lease or without obtaining the consent of the lessee.
Where a prospective buyer requiring a mortgage is looking to purchase a property subject to a rooftop lease, the lender will need to be satisfied its lender's "minimum requirements" are met.
If the lease does not meet those requirements, the lender may require the lease to be varied. It is very important to contact the mortgage lender at an early stage in the process to check its requirements and the process involved.
Importantly, the lender will need to be satisfied that the installer/lessee is accredited under the Microgeneration Certification Scheme and that the lease has been contracted out of the Landlord and Tenant Act 1954.
Perhaps most important of all, the lender will probably insist upon a break clause allowing it to terminate the lease if it feels that the presence of the solar panels is likely to make a property harder to sell.
If the break clause is exercised, then the company which installed the solar equipment will lose everything (it would have installed the solar equipment free of charge on the basis of a guaranteed return for a likely 25-year period from the Feed In Tariff Scheme).
Peter Walmsley is a partner at Boyce Hatton Solicitors. He can be contacted on 01803 403403. More information is available by logging on at www.boycehatton.co.uk