With the expected increase in Right to Buy sales, it is important to consider the impact of leases entered into for the provision of solar photovoltaic (PV) panels on the sale of houses.
The usual arrangement is for the freeholder to lease the roof space to a FIT provider. What will be the effect on the lease if Right to Buy is exercised? Is there an ability to break and are there any penalties? Are there any restrictions in the lease on the disposal of the property? What rights, obligations or reservations can be imposed on a Right to Buy purchaser if the panels are to remain in place, such as the right for maintenance and ongoing payment of the FIT Export payment?
It is not yet clear whether the presence of the panels will deter any Right to Buy purchasers or if it will affect the valuation. Values may be depressed if purchasers cannot carry out improvements such as loft conversions. Mortgages may also be restricted as some lenders have remained loath to accept the provisions of the leases for the roof space.
These are questions and issues that a Registered Provider should consider when preparing for the expected Right to Buy applications.
Registered Providers also need to consider the alternative situation where a purchaser wishes to install solar panels after exercising their Right to Buy. Clear policies should be in place to deal with such applications which need to consider:
- whether reasonable people having regard to the ordinary use of a house would suffer nuisance;
- is the structural integrity of the roof considered to be safe;
- would it be disproportionate to refuse consent eg are any aesthetic complaints of significance;
- does the arrangement amount to use as a business and if it does, is this a breach of any covenant