Selling A Home with Leased Solar Panels
Solar leases are recorded at the County Recorder's Office and reported on the Preliminary Report of a property. When it's time to buy or sell a house with existing solar panels, the lease will appear on the title search.
When a homeowner decides to enter into a contract with a solar company to lease or purchase a solar system. for their house, there is a notice recorded against the title to the real property on which the electricity is generated. The notice is named "Notice of an Independent Solar Energy Producer Contract." This is to establish that an independent solar energy company has entered into a contract for the use or sale of electricity produced by a solar energy system, to an entity or person, for use in a residence. In addition to the "Notice of Independent Solar Energy Producer Contract" being recorded, a financing Statement will be recorded to reflect that financing has been provided for either the lease or purchase of the solar system. The recorded "Notice of an Independent Solar Energy Producer Contract" does not constitute a title defect, lien, or encumbrance against the house. However, the financing statement indicates that there is a voluntary lien against the property. The solar company is solely responsible for the accuracy of the information provided in the Notice and for recording the documents with the County Recorder.
To extinguish the "Notice of Independent Solar Energy Producer Contract" if the contract is terminated, a document terminating the notice must be recorded. The independent solar energy company must produce the release to extinguish the "Independent Solar Energy Producer Contract." A Termination of the Financing Statement must be recorded as well. If the contract is assigned or assumed by the buyer, the solar energy company is responsible for recording a new "Solar Energy Producer Contract" and Financing Statement under the new ownership name.
Your escrow or title officer can provide you with additional information and assistance with any required documents.