House Purchase falling through because of solar panels

simonandmelissa

Hi All,

Hope you can help / advise me.

To cut along story short, I have been in the process of buying my first home since June, everything went through absolutely fine apart from the property has leases solar panels with 19 years left on the lease.

I was told by my solicitor 4 months ago the lease was not CML compliant, and agreed a Deed of Variation with the solar panel company solicitor to make it CML compliant.

Last Wednesday I was informed the director of the Solar Panel company (Solarfair Investment LTD) has refused to sign the lease as it was a ‘risk’ to his investment.

My solicitor then had no option but to ask the mortgage provider First Direct if they would proceed with the mortgage, after their legal team reviewed the lease, they declined and advised it needs to confirm with minimum CML guidelines.

The director now has the sellers in a corner and is trying to get them to pay £25,000 to buy out the lease, otherwise the property is unmortgageable.

The property in question has been inherited by 3 sisters from their late mother.

This has turned out world upside down as we have lost our solicitors fees, survey fees etc.

My question is, can the solar panel company refuse the request to make the old style lease CML compliant? And can he blackmail the sellers into buying out the lease?

Thank you for reading

capital0ne

I was always suspicious of these solar panel deals causing problems when selling

AnotherJoe

You call it blackmail, the solar company might ask why they should make a whacking big loss ona deal that was agreed? I dont see why they cant do what they deem reasonable, the previous owner made an agreement, why should that be broken just because its now convenient for the new owners?

I think fortunately solar has moved on and people tend to purchase it outright these days, mostly because its much cheaper to install, back in the day when it was many times more expensive the only way to make it pay was through these deals which obviously can have massive downsides to them.

You might get the sisters to ask their solicitor if there is a get out clause, maybe on death? Or perhaps there is an agreed formula in the lease to buy it out that is less costly than proposed. Or maybe the sisters are just going to have to take a hit on the value.

p.s you might find a lender that doesn't have this issue but this will still affect you when you come to sell so that ultimately affects the price you would pay now.

eddddy

simonandmelissa wrote: »

My question is, can the solar panel company refuse the request to make the old style lease CML compliant? And can he blackmail the sellers into buying out the lease?

Yes - the solar panel company can refuse.

I suspect the sticking point is a clause about repossession. To be CML compliant, the lease must automatically end if the house is repossessed.

The solar panel company will be thinking "Why should we lose out, if somebody doesn't pay their mortgage, and gets their house repossessed."

cjmillsnun

I had the very same problem. It ended up the executors (mine was also part of a deceased estate) buying the panels out on completion. They lost about 14k in the process.

eddddy is correct, it is about the repossession clause.

Some lenders will lend, however you are in the same boat when you want to sell.

AdrianC

simonandmelissa wrote: »

My question is, can the solar panel company refuse the request to make the old style lease CML compliant?

Absolutely. The mother signed a contract with a solar company, the beneficiaries of her lease are trying to change that contract to benefit themselves, at the detriment of the solar company.

Whether the solar company are being reasonable in that is a completely separate question.

And can he blackmail the sellers into buying out the lease?

You call it blackmail, I'm sure the solar company would see it rather differently - they're offering to assign both ownership of the panels themselves and the receipt of all future FiT payments, as well as terminate a perfectly valid and legal contract. Why should they not be paid for that?

Again, whether it's a reasonable sum is a completely separate question.

DCFC79

Just walk away.

The panels would have put me off from the start if it were me.

GDB2222

The 3 sisters are going to have to agree a figure with the solar panel company, or else the house becomes effectively unsaleable. That's not your problem, assuming they pay up, rather than deciding to keep the house and rent it out.

Where it does become your problem is when they turn to you and expect you to pay more as you'll be getting the full value of the solar panels. You'll need to have an idea of what they are worth.

ProDave

This is a headache for the seller, not for the buyer. Worst case yu can go and buy a different house instead.

Let's look at some numbers:

Assuming this is a 4KW system (most were) and on the original high FIT rate paying currently about 50p per unit, then each year it will give them an income of about £1500. If there are 19 years left to run on the contract, then there is a remaining income to collect of £28,500

Of course they may have to pay out for maintenance and repairs over that time, so the remaining profit for them would be lower.

They have offered to sell the contract for £25,000 which is way too high. In essence they are asking for all their profit up front. If I were the home owner I would not pay that much.

I would however negotiate with them, and offer £10K and perhaps settle on £15K for the panels and the contract.

But you as a buyer I don't see you have much option but go and look for a different house.

Scotbot

The solar panel company has the three sisters over a barrel. They have to buy out the contract or they can't sell their house. It's not blackmail it's perfectly legal. Their mum signed a lousy contract.
As for the OP leave this to the seller to resolve, if they haven't come to an agreement with the solar company by Christmas withdraw the offer and look elsewhere. Yes you have lost money, but not 25k.

chappers

tell the owners to cover the panels with a tarp and tell the company it will cost 25k to take it down.
We are only just starting to see the beginning of the issues with this sort of solar lease