Purchase or Pre-paid lease of 4-year old Solar System

[solarps]

You have every right to turn on the system right now

The leasing company owns the solar panels, that doesn't mean they can tell you that you can't use them. You can turn them on, you can remove them, you can let them sit and collect dust. There is no legal theory that says if you turn it on you have to buy it. They had the last two years to remove their equipment, they haven't. Turn it on and wait for them to let you know they want to come by and remove it.

I wouldn't offer them a dime for it. It will cost them as much to remove it as a normal installation costs, maybe a bit more. Figure $5000 to send a team out there to disassemble everything and haul it off. Then they are left with used solar panels that are worth maybe 25% of new (since new panels really only cost 70% after tax credits), a used inverter that might be worth 40% of new and a pile of wires and other stuff that is going to the dump. I doubt they would even recoup the removal costs.

BTW, the are under no obligation to remove it either. You bought the property with the stuff installed, you have no legal contract with them that requires removal, they are free to simply abandon it to you. Which I suspect they will do if you get smart and simply stop talking to them. If their inverter breaks down, replace it and toss the broken one up in the attic in case they ever ask for it back. Which they won't.

[russ]

The leasing company owns the solar panels, that doesn't mean they can tell you that you can't use them. You can turn them on, you can remove them, you can let them sit and collect dust. There is no legal theory that says if you turn it on you have to buy it. You are a lawyer or just blowing smoke? What is the real status of the utility connection agreement? If you fry the inverter because one is playing with it then what happens?

They had the last two years to remove their equipment, they haven't. Turn it on and wait for them to let you know they want to come by and remove it. He just bought the place

I wouldn't offer them a dime for it. It will cost them as much to remove it as a normal installation costs, maybe a bit more. Figure $5000 A big number to pull out of your backside - a really dumb number for that matter. If you have a basis then say what it is.

to send a team out there to disassemble everything and haul it off. Then they are left with used solar panels that are worth maybe 25% of new (since new panels really only cost 70% after tax credits), a used inverter that might be worth 40% of new and a pile of wires and other stuff that is going to the dump. I doubt they would even recoup the removal costs.

BTW, the are under no obligation to remove it either. You bought the property with the stuff installed, you have no legal contract with them that requires removal, they are free to simply abandon it to you. Which I suspect they will do if you get smart and simply stop talking to them. If their inverter breaks down, replace it and toss the broken one up in the attic in case they ever ask for it back. Which they won't.

Beware of offering useless and potentially problematic advice.

If you have some basis for what you say tell what it is.

[quicksilver8907]

I'm curious as to the legal basis of this as well. Thanks russ and solarps

[solarps]

Beware of offering useless and potentially problematic advice.

If you have some basis for what you say tell what it is.

Do you have a specific question about my "advice"?

"The leasing company owns the solar panels"
Fact, or do you disagree with what I am saying.

"that doesn't mean they can tell you that you can't use them"
They couldn't tell the original lessee, his guests, neighbor or his kids not to use them either. Their rights are spelled out in the lease. Stop paying and we can come take them away and sue you is the limit of their rights. That's a fact, I've read solar leases. They don't control the system any more than the leasing company controls my leased car.

"You can turn them on,"
Fact, go ahead and try it and see if it is in fact true. The lease does not give the lessor control over who operates the system. I've read solar leases, I've read car leases.

"you can remove them"
Absolutely true, if someone leaves their stuff on your property you are free to remove it, particularly after they've abandoned it for years. Do you disagree?


"you can let them sit and collect dust"
Obviously true, that's what has been happening for two years. Or do you disagree?


"There is no legal theory that says if you turn it on you have to buy it"
Would you like me to prove a negative? Feel free to find a legal theory that says if he turns it on he has to buy it. Good luck, take all the time you need.

I don't know what the status of the utility connection agreement is, I wouldn't advise turning it on without getting an electrician involved and making sure the utility is fine with it but that has nothing to do with the leasing company.

"They had the last two years to remove their equipment, they haven't'"
Fact, that he just bought the place is irrelevant, the place has been in foreclosure and according to the OP has been vacant for two years. Presumably the lease hasn't been paid for that period of time either. The leasing company had two years to invoke their legal right to remove the equipment, they haven't.

" It will cost them as much to remove it as a normal installation costs, maybe a bit more. (your comment ---> Figure $5000 A big number to pull out of your backside - a really dumb number for that matter. If you have a basis then say what it is.)"

I gave the basis for my number, the cost to install. Feel free to get a few quotes for installing his size system and let me know what you get. All the install steps taken in reverse plus restoring the property to it's original condition. Do you have some deinstallation of PV system numbers to share or are you just upset?

None of my advice was useless or problematic. But continue to believe he has to enter into some negotiations with some company that has abandoned a bunch of stuff on his roof and has been aware of it for two years. Solar City really appreciates it when you do, as of March of last year they stated that they only had to repossess 5 systems and actually got a few suckers to agree to assume the lease or enter into a new one, let them if they want to. In the meantime, keep using it JUST LIKE the previous owner was free to keep using it even after he stopped making his lease payments (free in the sense that the lessor's only recourse was to repossess the system and attempt to collect what the previous homeowner owed through collections as per the terms of the lease).

[solarps]

one more comment

There IS a legal theory that says that solar system could belong to the new homeowner with the lessor's lien wiped out in the foreclosure.
Courts have ruled that way with some solar water heating systems, I wouldn't be surprised if a court case turns up in the PV area as well.
I'm not going to speculate on what way it would go but there is a strong legal argument, sufficient for the new owner to treat the system as his own, just like any other permanent fixture that came with the house (those installed garage cabinets, even if there is a lien on them but not if he finds a car sitting in the garage).

So enjoy the system and if the lessor wants it back they can ask, at which point you can either set a time to have it removed or consult with an attorney to see if it is worth arguing that it isn't theirs any longer.

[wanabefree]

I think if it were me I would have turned the system on long ago.

I have no skin in the game but tend to agree with the opinion that it is abandoned equipment and until they come and remove it its yours to do as you please. I do not even think they could hold you liable for anything as they have had plenty of time to remove it and have chosen for there own reasons to leave it in place and try to get you to re sign a lease or purchase it. In fact much like an any other abandoned property after 30 days you can probably dispose of it or do what you wish as long as you have given proper notice.
Then again I am a bit or a rebel and believe that they are SOL and think they know it like the previous poster said.
So like I said I would turn it on and enjoy the free ride as long as it lasts but that's me.

[quicksilver8907]

I'm going to consult another real estate attorney before I do anything, but at this point if I don't hear from them in the next week I may be calling california edison and having them come out and take a look and turn the sucker on. Then I can send them a letter and say make me an offer or come get it.

[solarps]

The easiest way to think of this is:

1) There is a lease, it isn't with the current homeowner
2) If it was Solar City they probably filed a fixture lien, that puts anyone on notice after the date of the lien that the item is the property of SolarCity and doesn't convey with the house
3) A fixture lien gives Solar City some rights to recover their property
4) Neither the original lease (with OP is not a party to) or a fixture lien prevent the current occupant from using the fixture

I can buy a house, get someone to install a built-in BBQ with a lease protected with a fixture lien. I can use the BBQ, my guests can use the BBQ, I can rent the entire house out and my tenant can use the BBQ. If I stop making my house payment I can continue to live in the house until foreclosure and eviction. If I stop paying the lease on the BBQ I can continue to use it until the lessor makes arrangements to come pick it up. My tenant can do likewise (stay in the house I'm not paying for and use the BBQ I stopped making payments on). If the house is foreclosed and someone else moves in they can also use the BBQ until the lessor makes arrangements to pick it up. The new buyer of the house is under no obligation to remind the lessor that they have property and has no obligation to enter into negotiations for the property.

If the lessor didn't file the right paperwork or file it in time then they could possibly have lost ownership of the property and it conveyed with the subsequent foreclosure purchase. It's also possible that only parts of the system are protected by the fixture lien, for example while I could lease you a concrete patio and file a fixture lien it is likely that my fixture lien would get chucked by a court if you tried to force me to allow you to remove it. The rooftop mounts for the rails are an example of something that the lessor couldn't enforce a lien and remove if you objected. If there was reinforcement of the roof that almost certainly could be kept. But the bottom line is, it is as much yours to use as a BBQ in the backyard or a leased toilet in the house. The only recourse of the lessor is removal, not a demand that you leave it in place but not use it. Now if you take a hammer to it, you would probably be held liable, if it simple broke in normal use, that isn't your problem or liability. Likewise if someone stole parts of it, that's the lessor's problem.

Enjoy it while you can and recognize that they don't have any right to simply show up, enter your property and remove it, absent a court order or your agreement to allow them to do so. They have to negotiate with you for when to remove it, how it will be done, what will be removed and exactly what needs to be done to restore your property.

[solarps]

I'm going to consult another real estate attorney before I do anything, but at this point if I don't hear from them in the next week I may be calling california edison and having them come out and take a look and turn the sucker on. Then I can send them a letter and say make me an offer or come get it.

Why send them a letter demanding they do something when you are happy with them doing nothing?

For those interested in more details, here is a fine article by the ABA talking about this sort of thing, though not specifically solar systems. Note in particular that fixture liens expire and unless they are continued and with this solar array being 4 years old there is again the possibility that the lessor has not or will not do something correctly and the current owner will gain legal ownership of the array.

http://www.americanbar.org/content/dam/aba/publications/blt/2012/01/inside-buslaw-fixated-fixtures-201201.authcheckdam.pdf

Which is why I said I wouldn't have even contacted them in the first place.

[Volusiano]

Solarps, most of what you said do make a lot of sense. The only iffy part I see is number 4 where you stated ("Neither the original lease or a fixture lien prevents the current occupant from using the fixture"). While this is true, you can also say that "Neither the original lease or fixture lien ALLOWS the current occupant to use the fixture". It's an assumption that if the language doesn't forbid the use of it, then you're free to use it based on common sense. But common sense can also says that if it's not yours, then don't touch it. So it falls into the area of ambiguity subjected to interpretation.

But I agree that if you decide to interpret that you can use it, then you should go ahead and use it and don't need to write a letter demanding them to do something because you would rather they do nothing so you keep on using it.

In fact, this approach will probably help drive them to react more quickly toward a resolution instead of stonewalling you forever, since they now notice that you're starting to benefit from it and they will want to reach a final resolution with you before you reap too much benefit from it. But if they still stonewall, then it's still to your benefit anyway. So this approach is a win-win for you and actually is one good way to force their hands toward a resolution more quickly if that's what you want.

In terms of whether the labor cost to remove the system is just as much as installing a new system or not, it's probably not as much but pretty darn close, I would think. The only thing they will save is not the labor for the design and permit. But in terms of installation, they'll probably have to revert all installation steps just the same, except maybe not having to do as much coordination as they would on the installation.

So I would also agree with solarps that you should just demand the removal of the system to force their hands into abandoning the system to your favor. If they had sat on it for 2 years already, it's obvious they don't want to have to remove it. Sure, they want to wait and hope to score something with the new owner. But if the new owner forces their hand, it's probably better for them to write it off as a loss in the end than to try to throw more good money after bad to remove the system.

[quicksilver8907]

My hope is that I can get solarcity to come out and turn it on, which they already agreed to do for a trial period and that trial period was supposed to be like three months but I am planning on just leaving it on until we come to a decision. At least that way they are turning it on and not me. Hopefully that happens in the next week or two.

[KRenn]

My hope is that I can get solarcity to come out and turn it on, which they already agreed to do for a trial period and that trial period was supposed to be like three months but I am planning on just leaving it on until we come to a decision. At least that way they are turning it on and not me. Hopefully that happens in the next week or two.

Hopefully you get it worked out. Usually in such a situation the buyer either takes over the lease or the seller is forced to buy it out or sell it to someone else. What happened with the seller in this situation? My apologies if I missed it from earlier in this thread, I've been reading the posts trying to play catch up.

[Volusiano]

Hopefully you get it worked out. Usually in such a situation the buyer either takes over the lease or the seller is forced to buy it out or sell it to someone else. What happened with the seller in this situation? My apologies if I missed it from earlier in this thread, I've been reading the posts trying to play catch up.

The previous owner defaulted on the house 2 years ago (and probably the solar lease, too). So the seller is a bank, I presume. The OP just bought the house from the bank. The bank was not forced to buy it out by the OP. The bank ask OP to sign and acknowledge that there's a fixture lien on the solar system. Basically the bank stays out of it and let the OP and the solar lessor to work it out.

[KRenn]

The previous owner defaulted on the house 2 years ago (and probably the solar lease, too). So the seller is a bank, I presume. The OP just bought the house from the bank. The bank was not forced to buy it out by the OP. The bank ask OP to sign and acknowledge that there's a fixture lien on the solar system. Basically the bank stays out of it and let the OP and the solar lessor to work it out.

Thanks! I'm guessing and hoping that the lessor would be willing to work on the pricing in this case, might make more sense for them to do that then to have to pay to yank the panels off a rooftop.

[russ]

solarps with his country wisdom and legal advice is off to other pastures I suppose.

Just because you want something does not make it true or legal - as was said way early on this thread - lawyers are required.

Ignoring the law and doing what one wants is usually a good path to headaches.