Do Solar Companies Put a Lien on Your House?
According to the Solar Energy Industries Association (SEIA), solar electricity accounted for nearly half of all new energy in the U.S. last year, and there is now enough solar to power 23.3 million American homes. Many people want solar because it is friendlier to the environment, helps reduce the country's dependence on fossil fuels, and can even increase the value of one's home. Often, the panels are financed through a lender, such as a bank or solar panel company.
These lenders cannot place a lien on your home, but they can place a , which gives them rights to the property if you default on the loan. Fortunately, DoNotPay's Remove a Lien product can help you get the lien removed if you are planning to sell your home.
Property Liens and UCC-1 Filings
The table below explores the differences between property liens and UCC-1 filings.
|What Is a Property Lien?||A that can be used as collateral by a lender for an unpaid debt. Liens placed on homes can make it extraordinarily difficult to sell the home, as there must be a clear title in order to do so.
Unless the buyer is willing to pay off the loan, you're able to pay it off yourself, or renegotiate the terms and convince the lender to release the lien, no sale can be made because the lien is attached to the property.
|What is a UCC-1 Filing?||A UCC-1 filing is a legal notice that is filed by creditors as a way to declare their right to obtain the property of debtors in the even they fail to pay off the loan.
These notices are filed publicly, often in the newspaper of record for the area where the debtor lives. There are many types of business loans that require a UCC-1 filing. Not all solar companies use them, but many do.
These filings only apply to secured assets -- in this case solar panels -- that are specifically named in the filing and the lender is only permitted to confiscate secured assets if the debtor defaults on the loan.
What Is the Difference Between the Two?
A UCC-1 filing is a type of lien, but it is slightly different than other liens, such as one that would be placed on your property. Some key distinctions include:
- A property lien is placed on the property when the owner defaults on the loan.
- A UCC-1 filing is merely an assertion of rights when the solar panels are purchased or the filing is made, not when the loan is in default. It is a way to ensure that the debtor continues to make regular payments of the cost of installing the panels. However, if the debtor defaults on the loan, a lien can be placed on them so that the lender is prioritized for payment, should they sell their home in the future.
The Trouble with Liens and UCC-1 Filings
The problem with , and UCC-1 filings, is that they hinder your ability to sell or refinance your home. A buyer's mortgage lender (or even your own) can mistake the UCC-1 filing with a lien when performing a title search for the home, leading them to believe that the property does not have a clear title.
Three Ways to Remove a Solar Panel Lien
- Pay off the loan. While this seems a rather flip answer, bear in mind that you can market the home as eco-friendly, and can expect more than 4 percent more for the home than one that isn't equipped with solar.
- Have the solar company remove the panels before the sale of the property, or temporarily remove a lien for refinancing of your mortgage.
- Have the new owners assume the solar panel loan. If they understand that the UCC-1 filing, itself, is not a lien but simply a filing that occurs when a solar panel lease or a power purchase agreement is put in place, and they're willing to take on the monthly payments to keep the panels on their home, many buyers don't have a problem with this.
DoNotPay Makes Removing a Solar Company Lien Easier
generally requires a number of documents and a formal request. DoNotPay can collect the information you need to make your request and can file a Release of Lien form on your behalf. Simply follow these three steps:
- Search for remove my lien on DoNotPay.
- Start our Remove My Lien product.
- Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.
DoNotPay will write a letter to the creditor who placed the lien, and you can expect to hear back from them within two weeks.
Other Ways DoNotPay Can Save You Money, Time, and Effort
Helping remove a lien is just one of the many ways that DoNotPay can help you put money in your wallet and give you back some of the time you spend every day on time-consuming tasks. Check out the pages below to learn about other tasks DoNotPay can help you with.
- Release of Liability
- Reducing Property Taxes
- Help with Bills
- Increase Your Credit Limit
- Clean Up Your Credit Report
- Close Bank Accounts
- Small Claims Court
- Customer Service
See what other tasks DoNotPay can accomplish for you today.