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Seller Must Disclose Solar Panel Lease

Question: Last year we purchased a home in Arcadia. The home had solar panels on the roof. The purchase contract and the title insurance policy said nothing about a solar panel lease. After moving into our home, we started receiving notices from a solar panel company saying that we owed them monthly lease payments for the solar panels. Apparently, four years ago our seller had signed a 15-year lease for the solar panels, but never told us. Do we have to make these lease payments?

Answer: Probably not. The seller should have disclosed the solar panels lease to you. There could then have been negotiations with the seller to determine who would make the monthly payments for the solar panels lease. At this time, however, you should have no obligation to make these monthly payments. You should be the owner of the solar panels as they are attached fixtures to your home. Most solar panel companies, however, will record documentation showing that the solar panels are subject to a lease or to a loan, e.g., a UCC-1 financing statement. Your title insurance policy showed no such recording and, if accurate, you own the solar panels free and clear. Your seller, however, will probably have to make the monthly payments on the solar panels lease.

Note: Since October 2017, the Arizona Association of Realtors has a new form, Solar Loan Assumption Addendum, that should be used in the sale of a home with solar panels that are not owned by the seller, but are subject to a lease or other financing.

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