How Does Solar Panels Affect Title Of A Property?

Hello, this is Deirdre Brown your settlement agent serving the District of Columbia, Maryland, and Virginia. Today we’re going to talk about solar panels.

Solar panels can help with electricity and energy savings in homes. However, they can affect the title of a property.   Some solar panels are not owned by the property owner. They are leased and those leases have UCC financing agreements that are recorded in the land records and that is a lien against title.

If you’re a listing agent no matter which jurisdiction you are in you need to talk to the seller about whether or not their solar panels are leased. Unfortunately, sometimes sellers think that their solar panels are owned but they are not.  So you might want to take a look at the solar panel documentation. If it says lease agreement, the solar panels are leased. In that case, you have to disclose to the buyer via the Seller Disclosures that there is a leased solar panel on the property and that the lease agreement will be assigned to the new buyer.  Once there is a ratified contract the seller will contact the solar panel company. The solar panel company will assist the seller in assigning the new lease to the buyer and then the solar panel company will send us, the title company, a new UCC agreement that we will record in the land records after settlement.  Time is of the essence, as this paperwork must be initiated before settlement. This is the only way we can go to closing because all liens in the seller’s name have to be either paid or released in order for us to move forward with settlement.

If you have any title related questions please reach out to us at lexicontitle.com.