Landlords urged to watch for shady solar panel dealingsMake Text Bigger
Landlords maximising income from buy to let properties by leasing their roof space to firms generating energy from solar panels are warned that they need to comply with mortgage lender guidelines.
Many landlords are installing solar panels that offer tenants cut-price power while siphoning off excess energy for an income under the feed-in tariff.
The Council of Mortgage Lenders (CML), the trade body for bank and building society mortgage lenders, is urging landlords and homeowners to comply with their guidelines to avoid legal problems when selling or refinancing.
Typically, solar panel leases last for 25 years and the CML wants homeowners to benefit from long-term green initiatives without adversely affecting access for maintenance and property values.
The CML is warning homeowners to make sure:
- Installers have any planning and lender consents
- Installation is completed to an accredited standard
- Regular maintenance is carried out – providing any fees are no more than £60 per year, with any grace periods required for maintenance adequately protecting the homeowner’s interests
- Lenders can remove panels without charge, if the property is repossessed during the lease period if the panels affect selling the property or any resale value
- No onerous conditions affect the value, marketability or sale price of the property
“Individual lenders may have their own specific, additional requirements. It advises borrowers to include their lender in the discussions with the panel provider from an early stage. That should enable any security or valuation issues to be addressed before signing a lease agreement,” said the CML.
“Any changes to the borrower’s circumstances over that period, or the need for maintenance or repairs, should not create a financial burden for either the lender or borrower.
“The guidance is not intended to deter people from installing panels, but seeks to ensure that the lender’s security is not affected by the arrangement.”
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