Bank owned foreclosure

[Ampster]

...........
I am going to wait to see what the title company says. I think this really comes down to if they are fixtures or personal property at this point.

Yes, I think that is how the issue will turn. You have gotten good advice and now it is up to Tesla to make the next move. I am sure your research and your lawyer has explained to you lots of instances where personal property when affixed to the real estate becomes part of the real estate. I know you would like to get closure but the facts appear to be on your side. Good luck.

[Ampster]

As I wrote, I'm mostly out of my knowledge base here, and unless others here are lawyers proficient in such things matters, so are all the other posters to this thread - including you.

Attacking the person instead ot the argument? I worked for a bank for 11 years and ran a foreclosure department. On my own account I have participated in over 50 real estate transactions all of which carried title insurance.

So, from my ignorant perspective, I would seem to me that if Tesla is the valid lessor, and if they do not pursue legal remedies as stipulated in that lease, then as one not versed in the ins/outs of such things, but still possessing some common sense, call it what you will, I'd say it looks to me that in that case, Tesla would have walked away.

Valid lessor? Then who would be the valid lessee, the former owner? How is the lease relevant to the current owner? My opinion is that the security instrument (UCC filing) may or may not be effective anymore and that is the document that is important. I stated that in an earlier post.What about that do you not understand?

BTW, have you even seen, much less read a SolarCity/Tesla lease ? If you're going to mouth off like you know something about it, I'd suggest you get informed before bloviate and possibly mislead someone reading your stuff. Otherwise, your opinion is no more valid than mine or anyone else's as posted here so far.

Yes, I read the lease that was on the home that my daughter and her husband purchased 15 months ago in California. I also read the title report that showed the UCC filing. That lease contained a provision for the Lessee to have the system moved to another structure and I encouraged my daughter and son in law to insist that the seller do that. That was their dream house and they didn't want to rock the boat. I am working with them now to see about exercising the option to purchase the system when that opportunity comes around in another year and a half. It will all depend on the market value that is quoted at that time. The other option would be to prepay the system. However the lease is not relevant to the operative issue in this thread.

I have several copies of SolarCity/Tesla leases. They have not changed much in the 11 or so years I've been reviewing those and other PV 3d party ownership arrangements that IMO, too many fellow HOA members have been and continue to get conned into.

Then you can tell us what the remedies Lessor has if the lease is in default. Of course that is a moot point since the poster is not part of that contract. Also the lease form may be different in Massachusetts. The issue here is not the lease because the poster has not signed that lease so he is not bound by the terms of the lease. . The issue is whether Tesla/Solar City has any rights to the system. If they do, then the issue becomes what will the title company do to protect the poster. I am not a lawyer but I have had 50 years experience dealing with lawyers on mostly real estate contractual issues. I enforced mechanics liens when I was in the building materials business.

In legal analysis it is important to understand what the critical issue is all about to avoid blovating and spinning your wheels on irrelevant issues.That is why I focused on the title issue and not the lease.

[JSchnee21]

Also not a lawyer. But possession is 9/10 of the law and Tesla has no legal claim against you directly -- previous owner, yes. bank, yes. title company, yes. Nor can they trespass on your property to remove items that may or may not be their property (without a court order and a police / court official escort).

That said, at the present moment, are the panels benefiting you in any way? Who are your purchasing power from? Your local PoCo? Do you have a bi-directional meter? Is the current PV production offsetting your consumption? Are you earning SREC's? I have no idea about the details of the previous homeowners lease / PPA. But if they were financing / renting the panels through a power purchase agreement from Tesla, I'm not sure what impact (if any) this would have on the "normal" grid-tied Net-Metering setup that folks who own their systems would have.

It may be in your best interest to have your lawyer draft a proposal suggesting that Tesla remove their equipment and pay you reasonable and customer expenses for the replacement of your roof which was damaged / degraded by their installation.

-Jonathan

[PNW_Steve]

I have to wonder what kind of financial sense it would make for Tesla to pay installers to remove the system. What would a used system be worth to them?

[Ampster]

............

By vacating the lease, Tesla may be putting all their current lease revenue into some jeopardy, particularly when/as the lease trap becomes more commonly known in the future and home buyers of homes w/ PV leases simply refuse to accept the B.S. leases.

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This is hardly a case of voluntarily vacating a lease. Tesla's interest was foreclosed, involuntarily. Tesla did not have a choice in the matter except they could have cured the default in the original mortgage. They chose not to do that either because they didn't know or the financial burden and risk was greater than the value of their investment/

The lease is with the former owner, who apparently lost the home in foreclosure. The important facts are that the security interest (UCC filing) of Tesla/Sloar City may have been wiped out by the foreclosure. The poster has title insurance and the operative issue is whether the title compny will defend their opinion about "clear title". There is a very small chance that the title policy contains an exclusion for personal property. The worse case is that Tesla/Solar City may have the right to remove the panels.

The only thing that might influence future Tesla/Solar City policy is that when a lease becomes delinquent, they may wish to do something to avoid their security interest being wiped out by a foreclosure. That is beyond the scope of this thread.

[J.P.M.]

This is an excellent point.
While Tesla has an extensive legal team, and the money to fight you, what do they gain from doing it? The value of the panels is not worth them going to court. And if they were to lose, they would lose a huge bargaining chip for any future cases.
They are banking on you coming to the table and offering to assume the contract.

I'm out of my knowledge base here for the most part, and while agreeing with Peakbagger on Tesla's dilemma, I wonder if that dilemma has more aspects.

If I was Tesla or their ambulance chasers, part of the hard thinking I'd be doing might include a look at the lease revenue and its potential loss by not challenging situations like Beans31 has and so setting a precedent.

By vacating the lease, Tesla may be putting all their current lease revenue into some jeopardy, particularly when/as the lease trap becomes more commonly known in the future and home buyers of homes w/ PV leases simply refuse to accept the B.S. leases.

That might be a situation that Tesla may find worthy of some investment of time and resources, and so part of the hard thinking with respect to alternatives or ways forward, not all of which will work out well for home buyers.

[emartin00]

I have suspicion that Tesla's legal counsel is going to be thinking hard about pushing this. They ended up with thousands of potentially screwed up leases. Right now they can threaten legal action to bully folks into accepting leases but once they go to court and potentially loose the case they have a lot tougher time using that lever. At this point it sounds like you are dealing with the minions that implement Tesla policy, at some point it gets pushed up to the level where the policy gets made and that is where decisions get made on the best approach to settle this.

Good idea to send the certified notice.

This is an excellent point.
While Tesla has an extensive legal team, and the money to fight you, what do they gain from doing it? The value of the panels is not worth them going to court. And if they were to lose, they would lose a huge bargaining chip for any future cases.
They are banking on you coming to the table and offering to assume the contract.

[NCmountainsOffgrid]

no matter what 'happens', legally, I would highly doubt that anyone is going to come and 'rip off' any solar panels at your home, or even step on your property, for that matter, whether or not they have a 'claim' to them, or not. These are attached TO your property, and therefore become PART of your property - they are not like a car that can be 'repoed' in the night. Tesla might can eventually push for a lein claim on your property, but that too is probably past tense. They had a deal with a former owner, not you, and they have a contract with the former owner, not you. Your title insurance is designed to handle these types of claims that were not 'caught' by the title lawyer, or mortgage provider - it should by the vehicle that handles this claim by tesla, if any. Tesla is looking for money, not panels.

[Ampster]

I plan on calling the title company tomorrow to ask. The lawyer actually wasn't trying to get money out of us. He said taking it to litigation would cost a significant amount of money. That was not the route he recommended. Tesla has a lot of money and a legal team. Plus there is no guarantee that we would win in court anyways. I'm going to see what the title company says, and then decide if I'm going to contact Tesla.
.........

Court? Your seller paid for a policy of title insurance and the question for the title company is whether that policy covers claims arising from fixture filings (UCC filing). Did the lawyer read the title policy? Have you read the title policy?

[peakbagger]

I have suspicion that Tesla's legal counsel is going to be thinking hard about pushing this. They ended up with thousands of potentially screwed up leases. Right now they can threaten legal action to bully folks into accepting leases but once they go to court and potentially loose the case they have a lot tougher time using that lever. At this point it sounds like you are dealing with the minions that implement Tesla policy, at some point it gets pushed up to the level where the policy gets made and that is where decisions get made on the best approach to settle this.

Good idea to send the certified notice.

[Ampster]

Did he say anything about your title policy? Your seller paid for that and you might as well get some value. On the other hand I can understand why a lawyer might not want to give up the chance to get more fees by suggesting you had perhaps a way to get a free defense of your claim that the security interest of Solar City/Tesla was wiped out and become your personal property.

Did the lawyer at least read the title policy?

[gbynum]

Still looks to me that you are ignoring the best advice; have your title insurance company resolve it. THEY guaranteed clear title.

[John_Dumke]

Update: we met with the lawyer today. He said that he could not find anything that specifically matched our situation. There were a few things close to it in California and Arizona, but they had specific laws. As far as he could tell this hadn't happened in MA yet. From a legal stand point Tesla's interest in the panels were wiped out in the foreclosure, making them fixtures on the house. Tesla also would have been notified when this happened and should have came and got them, or sought money.

he said on the other hand Tesla will say that they are not fixtures and personal property and cannot be assumed by the new owner. Which is where it would get tricky and end up in litigation and could get very expensive for us to try to fight them..

that our best bet is to call them and say they are ours and play hard ball and see what they offer and try to settle... if they do not, to make sure we have them take out a bond on the roof before they take them down ensuring that it is done correctly

Thanks for the update. Very interesting. If your lawyer says there is not definitive answer, then I would say that "Possession is 9/10th of the Law" may now apply. I would not let them on my property.

[Ampster]

I am talking to a lawyer because am not positive that even if the UCC liens were wiped out it actually wipes out Tesla's right to the panels. I haven't actually met with the lawyer yet, as I have stated 3 or 4 times now, that will happen on Tuesday.

I mentioned my 3 family because numerous people have mentioned a true foreclosure, which this was.. because the buying process was more involved than a typical sale.

Okay I think I understand your concerns. I still think you could save yourself some time and money by starting with the title company. They also have lawyers to defend your title.
You have framed the legal issue well. The question to ask the title company (or the lawyer) is without a security interest (the UCC filing that was wiped out) does Tesla have any right to the system?

I don't know what you mean that the buying process was more involved. Is that because of the people involved? Are you referring to the negotiation process? I ran a foreclosure section at a bank many years ago and agreeing on a price and filling out a deed was fairly simple. The bank did have to make sure each of the steps before the foreclosure sale were done properly. From rereading this thread I assume you bought the home after the foreclosure sale where bank took title?

[Ampster]

Does the lawyer know you have title insurance? If so, why hasn't he been talking to the title company? Unless you are getting free legal advice, you are throwing away your money talking to a lawyer when the title compny should be defending your free and clear title. If the title company doesn't respond then your lawyer could be useful to leverage them..

What do your three family members have to do with this? Were they part of the foreclosure?