Selling house with Rent a roof solar panels

Biccus1

Help please i have a dilemma in 2011 we signed up for solar energy as it sounded great for the use of our roof for 25 years we were offered as much free electric as we wanted. So we signed up and Freetricity fitted our solar panels, We have had cheaper electricity bills since. BUT this is where the problems start, we now want to sell our house but the estate agent and our chosen solicitor has told us its not going to be easy as banks will not lend with them in place and solicitors advise against them. When we signed up the sales team did mention that our house price will be changed by having solar fitted when we said oh hows that we were told it will increase value by at least 5% and make it easier to sell..

I have been trying through my solicitor to contact Freetricity to ask what my options are but taking the company reg number and putting it to companies house it shows the company was dissolved in 2013. Has anyone had similar issues and has anyone got advice what i can do ?

Thank you

eddddy

Some banks will lend on properties with 'rent a roof' leases - as long as the lease is 'CML compiant'. i.e. It is acceptable to mortgage lenders.

So you have to find out:

- Is you lease 'CML compliant'
- If it's not compliant, will the solar panel company agree to vary the lease to make it compliant?

Alternatively, you can find out the cost of 'buying out' the lease. (i.e. Ending the lease by paying the solar panel company a chunk of money.)

Some info:
https://www.cml.org.uk/lenders-handbook/solar-panels-and-the-lenders-handbook/

And some mortgage lenders' positions on solar panels:
https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/2115/

Biccus1

Thank you Eddddy the info there is interesting , my biggest issue is finding who rents the roof now as since the day they were fitted i have had no correspondence at all. Has anyone paid the lease off to see what it costs? i seem to remember him saying something like £20k in the first year but that would drop per year or month what ever way they calculate it ..

davidmcn

Biccus1 wrote: »

I have been trying through my solicitor to contact Freetricity to ask what my options are but taking the company reg number and putting it to companies house it shows the company was dissolved in 2013.

Not sure which company you're referring to, but there are a variety of live "Freetricity" companies listed, so I expect they've assigned the lease to one of them.

ProDave

Biccus1 wrote: »

Thank you Eddddy the info there is interesting , my biggest issue is finding who rents the roof now as since the day they were fitted i have had no correspondence at all. Has anyone paid the lease off to see what it costs? i seem to remember him saying something like £20k in the first year but that would drop per year or month what ever way they calculate it ..

The owner of the panels will be likely receiving £1500 or more per year in FIT payments.

So over the 25 years of the FIT contract, they would expect to receive in excess of £37K

I will guess these were installed in about 2011 so still 18 years or so to run and still £27K expected payments.

It might be interesting to get a quote to buy out the contract, if only as an option to offer to buyers.

Biccus1

I just found this posted by iscamaid who has the homesun panels, The parts of the lease seem to be the same as mine ie "This is subject to serving the correct written notice in accordance with clause 2.7 of not less than 3 months and not more than 6 months. Please note that notice and payment must be served on the same day." same wording exact..

The quote iscamaid received was for 77 months ours have been in for 83 months so maybe same sort of figure..

"Good Morning,

Many thanks for your below email.

We can confirm the lease for the PV system transfers automatically upon completion of the sale. The only requirement Homesun have when a property subject to their solar lease is sold, is that the new homeowner completes a new homeowner pro-forma form (attached) and returns this along with the updated Land Registry title deeds showing proof of ownership.

Please send these documents for my attention to the below address:

Homesun Limited
C/O Unit 9
The Green
Easter Park
Benyon Road
Reading
RG7 2PQ

Once in receipt of these documents, we shall update our records accordingly.

In order to terminate the lease agreement and become the legal owner of the system the PV System Purchase Price must be paid.

The PV System Purchase Price is calculated in accordance with clause 2.7 of the lease agreement, the calculation is broken down below:

PV System The price to be paid to purchase the PV System from the Tenant calculated in accordance with the following formula: Purchase Price

303-x x y = p
303

Where
x = number of months which will have passed since the Term Commencement Date at the Break Date
y =£17,200.00 (seventeen thousand two hundred pounds only) Plus VAT
p = PV System Purchase Price

Therefore:

X = 77
Y = £17,200.00
P = £12,829.04

Total (Inc. VAT) = £15,394.85

This is subject to serving the correct written notice in accordance with clause 2.7 of not less than 3 months and not more than 6 months. Please note that notice and payment must be served on the same day.

Once payment has been received we shall instruct Homesun’s external solicitors to close the leasehold title at the Land Registry.

If you wish to proceed with the PV system buyback, please notify me and I shall provide you with an invoice and the relevant documentation.

If you would like to have the panels removed, the PV system purchase price must be paid. Once paid for, Anesco can remove the solar panels for approximately £1,800.00."

Biccus1

I have just found my documents for the buy out can anyone with knowledge help please? I have added the formula, when we had it fitted and the KW of the system fitted, also does anyone understand clause 2.7 i have also added the exact wording below...

It says

pv system purchase price

The price to be paid to purchase the PV system from the tenant calculated in accordance with the following formula:
S multiplied by I = p
Where:
S = the figure in column 2 of the table that corresponds with the year of the Lease during which the tenant receives the notice served by the landlord pursuant to clause 2.7 that is contained in column 1 of the table.
I = installed system capacity
P = PV purchase price

Column 1 Year Colum 2 (£GBP)
1 £4,750.00
2 £4,742.40
3 £4,726.59
4 £4,701.93
5 £4,667.74
6 £4,623.28
7 £4,567.80
8 £4,500.49
9 £4,420.48
10 £4,326.87
11 £4,218.70
12 £4,094.95
13 £3,954.55
14 £3,796.37
15 £3,619.20
16 £3,421.79
17 £3,202.80
18 £2,960.81
19 £2,694.34
20 £2,401.81
21 £2,081.57
22 £1,731.86
23 £1,350.85
24 £936.59
25 £487.03

We had it installed in oct 2011 and the certificate show the KW is 1.88

Clause 2.7
The Landlord may end this Lease on not less than 3 months' and not more than 6 months' Prior written notice to be served by the landlord on the tenant such notice to specify the break date. the lease will end only if the Landlord pays the PV system purchase price to the tenant on the same day as the service of notice in accordance with this clause 2.7.

AdrianC

Biccus1 wrote: »

...also does anyone understand clause 2.7 i have also added the exact wording below...

We had it installed in oct 2011 and the certificate show the KW is 1.88

Clause 2.7
The Landlord may end this Lease on not less than 3 months' and not more than 6 months' Prior written notice to be served by the landlord on the tenant such notice to specify the break date. the lease will end only if the Landlord pays the PV system purchase price to the tenant on the same day as the service of notice in accordance with this clause 2.7.

You are the landlord.
The owner of the panels is the tenant.
You give them 3-6 months written notice, paying them the "purchase price", and you then own the panels - and get the FiT transferred to you. The roof is then no longer leased, and the sale will be a lot easier.

It says

pv system purchase price

The price to be paid to purchase the PV system from the tenant calculated in accordance with the following formula:
S multiplied by I = p
Where:
S = the figure in column 2 of the table that corresponds with the year of the Lease during which the tenant receives the notice served by the landlord pursuant to clause 2.7 that is contained in column 1 of the table.
I = installed system capacity
P = PV purchase price

Column 1 Year Colum 2 (£GBP)
...
7 £4,567.80
8 £4,500.49
...

So the purchase price P = S x i
i is 1.88(kW)
If the system was installed in October 2011, then your 3-6 months notice will be issued in year 7, if received before October, so S = £4,567.80, or year 8 (£4,500.49) if received after.

£4,567.80 x 1.88 = £8,587.46
£4,500.49 x 1.88 = £8,460.92

Biccus1

Thank you that’s what I thought it was it says nothing about vat, but after reading some which seem to be 20k I was worrying, why would the want between 3 and 6 months notice I would have thought if I paid it would be done straight away ?

AdrianC

Usual rules apply - if a price is given to a consumer, VAT must be included, unless it's explicitly stated otherwise.


Why they want 3-6mo notice is kind of academic - they do, and you signed a contract that says you agree to that.

Biccus1

Ok thank you again yes i know at work we have to write plus or inc vat on quotes, the only reason i can seem to find for the 3 to 6 months maybe because they use a standard lease agreement and customise for solar apart from that im unsure..