From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Sunny side up! Leasing the roof for solar panels

News

Published: 15 June 2011 | Author: Bernard Clarke

We have published new guidance for firms seeking to lease roof space to install solar panels on mortgaged properties. We recognise that borrowers may wish to do this both to improve the environmental performance of their homes and to reduce energy bills. Our new guidance will help ensure that the interests of both householders and lenders are properly protected.

The guidance applies to firms operating in England and Wales and includes:

  • background information on the process of seeking consent from the lender to enter into a leasehold agreement with the borrower; and
  • a helpful, standardised letter that can be used to seek the lender’s consent.

In getting the consent of lenders, firms wishing to lease roof space to install panels will have to fulfil a series of requirements protecting both the lender and the borrower. These include giving undertakings that:

  • no panels will be installed until there has been a proper inspection to ensure this can be done without damaging the property;
  • any damage to the property caused in installing, maintaining or removing solar panels will be repaired;
  • panels will be removed to allow home-owners to carry out property repairs or improvements if necessary, and any charges for this will only reflect reasonable costs;
  • lenders have the right to break the lease if they end up taking possession of the property and solar panels hinder efforts to sell it;
  • solar panel equipment is insured by the firms installing it, and the borrower has been advised to inform his or her own insurance company about the new arrangements;
  • solar panel equipment, once installed, will be properly maintained;
  • all relevant planning consents have been obtained;
  • the firm installing the panels is accredited to the Microgeneration Certification Scheme, which should ensure that equipment is properly installed;
  • the firm installing the panels has supplied a letter signed by the borrower giving permission to contact the lender for consent;
  • full contact details for the solar panel firm have been provided; and
  • the lender has been given a chance to see the agreement between the householder and the firm installing the panels.

Once all the requirements are fulfilled, the lender will tell both the householder and solar panel firm that it gives consent. But the firm installing the panels must agree to tell the lender about any relevant changes to its agreement with the householder.

Lenders also recommend that borrowers seek professional advice from a suitably qualified conveyancer on the terms of the lease to install solar panels and any impact it may have on the value of the property.

We understand that home-owners may want to lease roof space for the installation of solar panels for environmental reasons or to reduce their energy costs. Our guidance will help to ensure that this is done properly, the process runs smoothly and the interests of home-owners and lenders are protected.