Q: We are selling our home and thought we were days away from closing. Then the title company found a “UCC” filing for the solar panels we leased a few years ago, and now the buyer’s lender is refusing to move forward until it is cleared up. We had no idea this was a problem. What is going on, and how do we save our sale? — Howard

A: Do not panic. This is a common problem with a well-known solution, and it rarely kills a sale outright.

The title company found a public notice indicating that the solar company still has a financial interest in the panels on your roof. When panels are leased or financed rather than owned outright, the solar company files a “UCC-1 fixture filing” in the public records to protect its equipment.

It appears in the title search much like a lien, and the buyer’s lender will not fund the loan until it is cleared or properly handled.

The fix depends on how you hold the panels, and there are three common arrangements.

If you own them outright, there is usually no issue, and they convey with the house.

If you financed them with a solar loan, you usually have to pay off the remaining balance at closing, much like a second mortgage, and the solar company releases its lien.

Your situation, a lease, is the one that takes the most work because a third party actually owns the equipment. You will either need the buyer to qualify with the solar company and take over the lease, or you will need to buy out the remaining term of the lease from the leasing company before closing. Usually you do not have to come up with the money in advance, and can pay the solar company from the proceeds of your sale.

This feels like an emergency because it surfaced late, which is the most common mistake I see with solar. These transfers and payoffs take time; solar companies can be slow, and your buyer may have to apply for credit approval.

Contact your solar company today, tell them you are selling, and ask for the transfer packet and a buyout figure so you know both options and their costs. Share that information with your buyer and the closing agent right away.

Like most closing problems, this one is manageable if you get ahead of it and keep everyone informed. Ask your closing agent or a real estate attorney to coordinate the payoff or transfer to ensure it happens properly.

And for readers who may face this problem in the future, gather your solar paperwork before you list your house for sale so this becomes a footnote in your closing rather than a crisis at the end.

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