What’s Trending: Solar Company Liens
Shedding some “light” on what is occurring with solar panel companies and their contracts.
Recently our office has encountered solar panel company liens that are attaching to the seller’s property. This presents title and closing issues because the solar companies are recording liens against the properties or attaching a line item payoff onto seller’s property taxes. Of course, a recorded lien must be paid prior to a seller closing their sale. In some cases, the contracts can be assumed or assigned. Current owners should read the solar contracts very carefully. Assign-ability is not easy or automatic. A buyer may have to file a new application for the assumption. The solar finance company may be resistant to allowing a new customer to take out a new loan since the finance company may prefer to receive full payment at closing instead. Our experience has been that the solar panels can be expensive and the loan may be an interest only type loan. Payoff amounts could be quite high. When the line item payoff is added to a seller’s property tax bill, this becomes a priority lien and moves into a first position payoff coming before an existing mortgage payoff. If a buyer is obtaining mortgage financing and is interested in assuming the solar panel loan, he or she should discuss all requirements with their lender. When taking a listing, be sure to ask the owner about any current solar panel contracts or any other similar type of contracts they may have pending. In representing your buyer, be sure to inquire with the listing agent about any active contracts the seller may have open before you place your offer.
The Roknich Law Firm
Article authored by:
Cathleen Acosta, 4-10 Licensed Title Agent #A0000884
Business Development Officer
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