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Renting out roof space for solar panels: trouble for homeowners?

Solar energy remains very much in the news with the Department of Energy and Climate Change's (Decc) decision to cut subsidies for "feed-in tariff" payments to households generating electricity with solar panels having been branded "unlawful" by a High Court judge last month. The government has lodged an appeal which has caused anger in the industry as it prolongs the uncertainty as to tariffs, and threatens job losses.

Whatever the outcome, and effects on the industry, solar panels are changing the rooflines around us, and no doubt this will continue to be the case for the future.

Homeowners may install panels themselves or, as is increasingly common and on which we are often asked to advise, lease their roof space to host solar panels for a third party company.

Homeowners may need planning consent if the property is in a Conservation Area of if it is Listed. Otherwise, homeowners should check with their local council as to whether the proposal is exempt as 'permitted development'. The work however would probably need building regulation approval and homeowners are well advised to seek advice from a surveyor. Roof damage, and consequent leaks, can be costly both financially and emotionally.

Homeowners who own the freehold to their property and who are tempted by lease arrangements should heed the warnings from the Royal Institute of Chartered Surveyors last year.

David Dalby, RICS Director, said:

"While we wholeheartedly support the use and production of green energy, it is important that consumers are aware of the potential dangers before entering into these agreements. Leasing roof space can generate much-needed additional income for households. However, anybody considering it should consult their mortgage provider and seek legal advice beforehand. The terms of the lease may not be acceptable to all lenders, so some homeowners could find themselves in the extremely difficult position of being tied to a long-term lease, yet in violation of the terms of their mortgage."

"Furthermore, with installers currently not being subject to formal regulation, the addition of solar panels could potentially create structural problems on a property as some roofs may not be strong enough to take the additional weight. It is also important to ensure that the roof covering is in good condition before any installation takes place, to reduce the risk of future maintenance problems."

Leases of roof space need to be viewed with caution as there are a number of implications which can have serious consequences:

Leases are typically for up to 25 years, with no 'break clause', to enable the homeowner to get out of the lease
Homeowners with mortgages would need the consent of their lenders to the grant of the lease or they risk being in breach of their mortgage terms.

The 'Tenant' will want the lease to be registered against the homeowners title and the lease will bind any new owners of the property which may reduce the ability of the homeowner to sell the property, and may reduce it's value.

The roof will probably need to be strengthened to take the additional weight, to avoid structural damage.

The fabric of the roof should be in good condition to prevent problems later: any benefit can be soon lost if leaks are suffered.

Consideration has to be given to who is liable for any maintenance or repairs needed, and the fact that the 'tenant' will need to be able to have access 24/7.

Homeowners need to be vigilant in ensuring any necessary local authority consents are taken or otherwise may be subject to potential legal action by the Council.

Caution is therefore essential for any homeowner enticed by a lease arrangement, and legal and surveyor advice should be taken before any commitment is made.

For more information please contact:
Susan Ellis, Partner & Head of Residential Conveyancing E: susan.ellis@wards.uk.com
or
Heather Jones, Associate Solicitor: Commercial Property E: heather.jones@wards.uk.com