Monday 25 June 2012

Homeowners could breach their existing mortgage arrangements or even see the value of their home affected by agreeing to have solar panels installed on their roof, warns law firm Ridley & Hall.

The Huddersfield-based firm, which is one of the national Law Society’s Conveyancing Quality Scheme (CQS) members, says in some circumstances, utility companies are offering homeowners are offering homeowners a 25 year lease to use their roof space for solar panel installation. Ridley & Hall warns that while solar panels can help the environment and reduce energy bills, the move could breach the terms of a mortgage and even affect the property’s value.

Adam Fletcher, Managing Partner at Ridley & Hall, said: “Solar panel leases could breach the terms of a homeowners mortgage agreement. They are a type of business lease and therefore involve certain liabilities for the homeowner and their mortgage provider. When they come to sell the house or remortgage the property homeowners could find that some buyers do not want to take on the additional liabilities of the solar panel lease. The value of the property could be affected by the existence of such a lease.

“The Council of Mortgage Lenders has recently issued guidance on what minimum requirements are expected of a solar panel lease of this kind, but even then some mortgage lenders might have additional requirements. There could also be repair and maintenance costs on top of that. It is therefore essential to consult a CQS solicitor before agreeing to any such lease.

“We at Ridley & Hall would never deter anyone from seeking out ways to generate energy in their home that are good for the environment and reduce energy bills, but we would urge anyone doing so to do it with sound legal advice from a CQS firm. You could be signing up to more than you realise.”

To save money on the cost of buying and installing solar panels themselves, many homeowners opt to lease out their roof to a utility company. The company installs the panels and owns the air space above the property as part of the lease agreement.

Buyers

Ridley & Hall says that anyone buying a home where there are existing solar panels should ask their solicitor to check if they are part of the solar panel lease.

Adam Fletcher said: “If you buy a home with a solar panel lease you are taking on the remaining time left on that lease as well. Buyers will need to check it does not breach the terms of the mortgage they have agreed with their bank and get a full understanding of what the terms of that solar panel lease are.”

Ridley & Hall underwent a rigorous application and assessment by the national Law Society to become part of CQS initiative, which recognises high quality in residential conveyancing.