Last year a Canterbury couple got caught out badly and faced losing almost $23,000 from the sale of their home after their leased solar power system was incorrectly included on the chattel list in their sale and purchase agreement.
It’s important to understand what your obligations are before putting your property on the market if you have any leased fixtures. The first step is to get out the paperwork and give your knowledge a bit of a refresh. That should help remind you what the terms were you signed up to and give you a steer on what you need to do when selling.
If you’re selling a property with leased solar panels, you must ensure they are covered by specific terms in your sale and purchase agreement. There are several options to consider.
1. Transfer the lease to the new owner
First off check that the lease agreement allows you to transfer the lease. If it does, then you will need to include an assignment of lease clause in the sale and purchase agreement and get the solar providers acceptance of the assignment. This is usually the best option as you are then transferring the system and the requirements on to the new owner.
2. Pay out the Lease and take over full ownership
Checking that this is possible is the first step down this path. The paperwork you signed when the system was put in may tell you if this is an option for you. Alternatively, a conversation with the provider should also let you know if this is possible and what the cost would be. If this option is chosen, then you can pay out the lease and take over ownership. The system is then included as a fixture / chattel in any sale agreement.
3. Take the solar system with you to another property
Taking the solar system with you will need full disclosure to any buyer as well as the agreement from the solar provider. You will need a clear clause in your sale and purchase agreement allowing you to take it with you and ensuring that any damage in removing it is sorted out before settlement. The key thing here is to make sure the solar panels are clearly excluded from the chattels list, and that everyone is in agreement with what you are doing.
4. Remove the solar system from the property
If you decide on this option, then the work needs to be done before settlement and any sale contract needs to provide enough time for that to happen. You also need to make sure it is crystal clear that the solar system is not included in the sale, and that the lease with the provider is cancelled when the system is removed.
Figuring out which options are possible, and what is the best for your situation should be part of the work to get your property ready for sale. Don’t leave it to the last minute.