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Frank Hovis

Unsellable Houses With Solar Panel Roof Leasing

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Dangerously close to being on-topic but I'm sure we'll stray.

I am only talking about where a third party has put panels on a roof, where the owner has done this then they are not an issue and add to the value.

A friend was buying a house with these on, whilst they had been registered and receiving income for somebody (not the owner) the original installing company had disappeared, the company named on the contract had gone into liquidation, and the charge had not been registered.

Now whilst you or I might take a flyer solicitors follow a step by step guide for housing transactions from which they will not deviate; or risk being sued by the mortgage company. After much expense the only way forward was that the existing owner, at their own risk, took the panels off the roof and dumped them in the garden. As this would have left them open to legal action and costs from whoever was receiving the income they refused to do this. No sale.

Then on a local radio phone-in last week somebody was saying she was unable to sell her house because none of the potential buyers were being offered a mortage for it because of the leased roof and panels.

This looks like the first rumblings of a big storm over these, with houses with these leased panels on it being as attractive to mortgage companies as those built out of asbestos. So cash buyers only and big discounts ahoy.

I did dissuade friends and family from taking them up at the time as I could see this coming. I dealt with it at work and turned it down because of the paltry income, huge commitment and requirement (which they don't highlight) to make good their income if it is interrupted. So for example if you need a new roof within the 25 / 20 years of the contract you have to pay them what they would have earned had the panels stayed on. Plus even then banks were very unhappy (and charging big fees) to allow these to go on. Which is probably why most charges never got registered at the Land Registry.

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Such a house could be an interesting bargain.

If presented with one as a prospective buyer, I'd be approaching the owner of the panels with a view to buying them out. The cost of that would of course be reflected in any offer I might then make.

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So who is getting the FIT money?

Yes this was always going to be on very dodgy grounds.

There is usually a city 'income' fund behind it. In the early days, these were eligible for EIS treatment - so really nice tax breaks - but this was stopped by HMRC a couple of years ago.

Such a house could be an interesting bargain.

If presented with one as a prospective buyer, I'd be approaching the owner of the panels with a view to buying them out. The cost of that would of course be reflected in any offer I might then make.

It'll be very expensive; many of these 'free solar' schemes went onto houses when the FiT was around 40p. In the months before the FiT reductions in 2012, and before the Government had realised just how far and how fast the costs of the hardware were falling, the first year yield was around 20%. Add in indexation and a 25 year contract, buying out those cashflows will be costly.

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So who is getting the FIT money?

Yes this was always going to be on very dodgy grounds.

Whoever it's registered with.

I was approached several times about putting these on to a few k houses; several had a very short business model where the future income was immediately sold on to an investor.

From whom you will hear nothing unless their income stops; then they will sue you.

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There is usually a city 'income' fund behind it. In the early days, these were eligible for EIS treatment - so really nice tax breaks - but this was stopped by HMRC a couple of years ago.

It'll be very expensive; many of these 'free solar' schemes went onto houses when the FiT was around 40p. In the months before the FiT reductions in 2012, and before the Government had realised just how far and how fast the costs of the hardware were falling, the first year yield was around 20%. Add in indexation and a 25 year contract, buying out those cashflows will be costly.

And as you say, a big fund behind it who want the revenue stream and won't be interested in negotiating on individual properties.

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Well my council house has a large roof and is southerly facing. Most houses have solar panels on them.

I`ve been asked several times when they could come round and do a survey.

Don't say I`ve missed an opportunity ?!

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Well my council house has a large roof and is southerly facing. Most houses have solar panels on them.

I`ve been asked several times when they`ve could come round and do a survey.

Don't say I`ve missed an opportunity ?!

What, the council offering to put them on? Why say no to that, one day's inconvenience while they put them on and then some free electricity?

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So giving someone 25-year access to a part of your property damages the value of that property? Who'da thunk it?! I can't believe anyone took these up. I wish I had the morals (or lack of) to take advantage of the naive, stupid and greedy in such ways.

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3 days inconvenience Frank.

+ you only get 10% of the free electricity, 90% goes to the investors .

Eh? Is this via the council?

I wouldn't bother with that either. Most HAs give the electricity to the tenants for free, I can only think of two that don't and they don't take anything like that, more like half.

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We were told that we`d get UP TO £100 !! That means more like 20 to £30 after 2 or 3 years.

I heard the installers talking and they said that roves hadn't changed for hundreds of years and weren't designed to handle the extra pressure and weight !!

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We were told that we`d get UP TO £100 !! That means more like 20 to £30 after 2 or 3 years.

I heard the installers talking and they said that roves hadn't changed for hundreds of years and weren't designed to handle the extra pressure and weight !!

Roofs were very solidly built, in general, up to about the early 80s when timber framing came in.

I was expecting problems to arise but gave actually only heard of one roof collapsing, late last year in Gloucs IIRC.

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I think I moaned about these schemes a while back. It is about as useful a millstone, as having to replace the church bell. A legal minefield. :blink:

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There is usually a city 'income' fund behind it. In the early days, these were eligible for EIS treatment - so really nice tax breaks - but this was stopped by HMRC a couple of years ago.

I have a few quid invested in solar funds, including some with VCT tax breaks (similar to EIS).

They're not interested in domestic rooftops. They like bigger buildings like schools, offices, factories, warehouses, where they can deal with the buildings manager. It's a win-win there.

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Roofs were very solidly built, in general, up to about the early 80s when timber framing came in.

I was expecting problems to arise but gave actually only heard of one roof collapsing, late last year in Gloucs IIRC.

They have about three times the trusses needed to support the weight of the tiles to allow for the extra potential weight of a foot or more of snow covering the roof.

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Hang on, if the company went into liquidation then how can they sue the homeowner for removing them? The company as an entity no longer exists, in Company Law so it cannot initiate legal proceedings.

My cursory understanding of it would be that "nobody" owns the solar panels once the company has gone bust, so if I were the homeowner I'd tear up the paperwork and say they were mine now when asked. I can't see any reason not to.

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Hang on, if the company went into liquidation then how can they sue the homeowner for removing them? The company as an entity no longer exists, in Company Law so it cannot initiate legal proceedings.

My cursory understanding of it would be that "nobody" owns the solar panels once the company has gone bust, so if I were the homeowner I'd tear up the paperwork and say they were mine now when asked. I can't see any reason not to.

My thoughts - If the original company were to fold, then I would imagine that the future income would still be very attractive and therefore be sold on as an asset to another company. I bet deep down in the contract there is something written that says the contract can be passed on to another company.

Thinking about this logically, these companies probably do very few installations these days so are mostly just in the business of administering the generation income. I don't think they would have many overheads these days so no reason to fold. All that is required is for them to remotely read the meter (via SIM card) and enter the number in the system. Few days later, nice BACS transfer into the account. Unless these companies are struggling with the servicing of their debts, or they've dome something really reckless, I don't see why they would be forced out of business. At first glance it appears to be passive income.

In theory, the yield of the panels can be anything up to 20%, so servicing a debt should not be a problem. Income is pretty much guaranteed at a known rate, any loans should be fixed too, and certainly at a lot lower rate than the income.

Also if they had any sense, the company installing the panels would be separate from the company receiving the income, so if for any reason the risk-taking part of the business were in trouble, then the income receiving part would not be affected.

However you look at it, it's not a good deal for the homeowner.

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Hang on, if the company went into liquidation then how can they sue the homeowner for removing them? The company as an entity no longer exists, in Company Law so it cannot initiate legal proceedings.

My cursory understanding of it would be that "nobody" owns the solar panels once the company has gone bust, so if I were the homeowner I'd tear up the paperwork and say they were mine now when asked. I can't see any reason not to.

It does seem a bit complicated. I'd say that if it isn't completely clear on the deeds then the legal obligations don't transfer with the property.

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Hang on, if the company went into liquidation then how can they sue the homeowner for removing them? The company as an entity no longer exists, in Company Law so it cannot initiate legal proceedings.

My cursory understanding of it would be that "nobody" owns the solar panels once the company has gone bust, so if I were the homeowner I'd tear up the paperwork and say they were mine now when asked. I can't see any reason not to.

If a company goes into liquidation, its assets will be sold by the liquidator. Someone will have bought the rights to those solar panels.

Note that liquidation may be entirely voluntary: it doesn't imply the company went bust. For example, if the panels were installed by a one-man-band and he then retired, he could have liquidated to cash in the value of the company (he would probably have a buyer for the assets lined up). If the company was bust, the money raised by selling assets would go to the creditors.

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