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Was someone supposed to disclose this before I entered escrow? Options now?

Looking for agents to weigh in on my situation.

I made an offer on a home that came with "100% Solar power".

My agent's notes  said, "X Company's Solar Contract comes with home. Monthly Fee $150/last month's electric bill only $1.77 or a credit to homeowner (Details and Contract provided)."

MLS public description that I see says "100% solar home". Nothing else about cost.

By "Monthly Fee $150" in agents notes, I was under the impression that it was a $150/month to maintain the solar system as long as we lived there. 

We had no idea what was to follow:

Our offer was accepted. About 5 days into our due diligence the seller's agent sends over SOLAR contract that reveals that it is not just "150/month fee" but a 20 year lease that increases $5/year!

We were then told by the listing agent that we must  "assume" this 20 year $49,000 dollar lease from the seller in addition to the cost of the executed Purchase Agreement.

We complained.  The buyer reluctantly said he would pay off his 20 year lease, if we would agree to add 16,000 dollars to the already executed Purchase Agreement.

Both agents will also take a 1% cut in their commission to help him pay off his solar contract.

Technically speaking, the default words of the Purchase Agreement lists "solar system"  as one of the pre-written items included in the sale. We know that the seller just probably forgot to exclude it.

We are still in due diligence so...

Your thoughts? Normal? Is anyone to blame?
  • July 23 2013 - Los Angeles
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Answers (5)

It sounds like everyone is going..above and beyond to help the sale complete. It is part of your "due diligence" to investigate everything that you are buying, up to and including the solar lease. Solar is the way of the future and many homeowners are putting solar in their homes. Some people "buy" their solar panels outright, you might consider doing this instead of leasing if it makes sense to you. It will save you money, in the long run particularly if your home has air conditioning!
  • July 30 2013
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This is clearly a Disclosure issue.  Have you checked with the Solar Company to verify that they will accept a lease from you?  Many Solar companies require much higher FICO scores that some lenders.  Since you are still within your 'Inspection Period" it is certainly your choice to cancel if you so chose.  Make sure you do your homework!!!
  • July 23 2013
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Disturbingly, this is becoming a common occurence with the increase in interest in Solar. Of course it should have been fully disclosed in the Transfer Disclosure Statement and/or the Seller Property Questionnaire. In ideal circumstances you would have read those documents before committing to any inspections. Some abbreviated mention should ideally have been in the MLS listing also (say, "leased solar system"). My guess is that the seller didn't pass on full details to the listing agent.

I don't know who is to blame, but it sounds like you are still negotiating so the main issue is how much you are prepared to pay for the home with the seller paying off the lease. You can certainly cancel the contract if you have not yet removed inspection contingencies.
  • July 23 2013
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Thank you Mr Deam for replying. I have an agent, and told her basically the same - that the listing agent should have made such a large disclosure (this $50,000 lease) upfront, or at least clearly the agents notes.

It was a big surprise to both me and my agent to get the news days after we had entered escrow and already spent money on a house inspection.
  • July 23 2013
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It is my opinion that a material fact was left out of the listing. If you are going to need to assume any type of lease agreement be it a water softener, security system or solar system that should be disclosed upfront.
  • July 23 2013
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