One of the most recent must have features to adorn your roof is the Photovoltaic panel. These panels are gaining in popularity (along with the solar hot water panels) but for a surveyor they present a new challenge in reporting on them.
Some early installations have been blamed for putting too much weight on the existing roof structure but more recent installations should have been installed following an agreed code of practice in accordance with the Microgeneration Certification Scheme.
Obviously if there is any sign of distortion to the roof then the surveyor must report it and in certain circumstances even ask for further investigation. However where the roof structure is not showing visible signs of stress there are additional considerations that must also be documented in the Survey.
Some of the panels on roofs are currently being installed on leasing arrangements. That is the installers agree with the property owner to erect the panel under a lease agreement of up to 25 years on the understanding that the property owner will receive the free electricity that they consume from the panel but the installer will receive the feed in tariff to the National Grid. The issue with such an arrangement is that any responsibilities in accordance with the lease will pass with the property upon sale to the new owner. It is therefore important that this lease be checked by the conveyancer to make sure it contains no onerous responsibilities or infringes any rights that the property owner needs to preserve.
Many home owners wouldn’t even consider that they might need the permission of their lender before agreeing to the installation of a solar panel. In the case of leased panels a recent draft guide from lenders clearly indicates the scope of what Surveyors should be flagging up to the conveyancer to check for: Essentially the lender expects the installer to take full responsibility for the panel and for this to be fully documented in a written declaration made by the installer.
In the Survey therefore Surveyors must ask the conveyancer to first check if the panels are owned outright by the property owner or are leased. If the panels are leased this identifies a whole range of issues and while Surveyors are essentially posing the question – Is the lease arrangement one that a lender would accept? – many of the things a lender would require are also pertinent to what the property owner might also need to ensure, for example:
- Is the panel insured and by who? In addition most building insurers will require notification that the panel has been erected as a condition of building insurance cover.
- Is there provision in the lease for a lender to terminate the lease upon taking possession of the property? A lender will not wish to have title that is encumbered by a lease which might otherwise undermine the value of the asset.
- If the property is held on a long lease (this applies to flats but also to houses in some parts of the country) then consent of the landlord would also be required for the subletting of space on the roof for the panel
In addition Surveyors must ask the conveyancer to clarify if the panels were satisfactorily installed. In the first place the conveyance should be asked to check that the installer carried out a physical inspection of the roof to verify that it was safe to install the panels. Secondly that the installer obtained any necessary statutory/ local authority consents and approvals for the installation that might have been necessary.
Lastly , the conveyance should be asked to check who is responsible for maintenance
- Does the lease for example include responsibilities for maintenance and who takes responsibility for these costs? Lenders will not wish to be saddled with such costs in the event that they repossess a property
- Does it allow for the panel to be removed if work is necessary to the roof structure or covering? In the event of repairs to the remainder of the roof owners need to be able to have the panel temporarily removed to allow the fabric of the building to remain wind and watertight
The attitude of mortgage lenders to these installations is an indication of just how seriously Surveyors should be flagging up to the conveyancer what checks to make. The impact on value of lender requirements is considerable. Therefore failure to identify potential legal issues that affect the salability of the property could undermine the value of our client’s investment.
For further advice contact the team.