Solar Panels and Title Clearance
Do not proceed to closing without documentation showing how the solar agreement will be handled. If a solar filing creates a title requirement, ClosePoint must approve the method of clearance before closing.
We are seeing closings postponed or fall apart because solar transfer paperwork was not completed early enough. Identify the arrangement and begin the approval process as soon as solar panels are disclosed.
1. Start with the agreement and a current owner search
Determine whether the panels are owned outright, financed, leased, or covered by a power purchase agreement (PPA). Obtain the complete agreement and amendments, account information, solar company contact, and written transfer or buyout requirements. A PPA is not necessarily a loan; confirm its actual terms.
Order a Current Owner Search and Copies: www.ClosePointUSA.com/titlesearchorder
Select Current Owner Search and Copies and specifically request review for solar UCC-1 fixture filings, with copies of related filings. Ask ClosePoint to confirm the search scope and whether additional searches or examination are needed. A deed-only search is not sufficient.
2. Let ClosePoint determine the title requirement
A UCC-1 is a financing statement under the Uniform Commercial Code. A county-recorded solar fixture filing may affect title and the new mortgage's priority. Provide all filings, amendments, assignments, and terminations. A seller's assurance that there is no lien is not enough.
The collateral description and purpose control the review. A security interest in solar fixtures may have priority over a later mortgage; a precautionary filing giving notice of equipment ownership is not automatically a blanket lien on the home. If ClosePoint confirms no solar filing or other encumbrance requires clearance, there is generally no solar lien requirement for ClosePoint to clear. Contractual transfer duties remain with the parties and solar company, and lender review may still be required.
No county UCC-1 does not automatically establish that the panels are personal property (personalty), establish ownership, or rule out a state-level UCC filing. Disclose any other solar lien, recorded agreement, or assessment.
3. Clearance path one Approved transfer and termination with refiling
Before closing, provide: (a) executed transfer or assumption documents and the solar company's written approval of the buyer; (b) written instructions identifying the existing UCC-1 and providing an authorized UCC-3 termination or appropriate release acceptable to ClosePoint; and (c) instructions requiring any replacement UCC-1 to be recorded after the deed and new mortgage. ClosePoint must approve the documents, release arrangements, and recording sequence. A pending application, verbal promise, or buyer-seller agreement alone is insufficient. Not every UCC-3 terminates a filing.
4. Clearance path two Payoff or contractual buyout
If the buyer is denied approval, or the parties elect a buyout, obtain the solar company's written payoff or buyout statement, valid through payment and including all charges. Obtain its written commitment to terminate or release the identified filing upon payment. Document who pays, confirm sufficient closing funds, and reflect the approved charge on the settlement statement. ClosePoint must approve the payment and release arrangements and track the required release evidence.
For a financed purchase, do not close with an unresolved solar filing that impairs the lender's required priority. Any alternative, including subordination or acceptance of a precautionary filing, requires written approval from ClosePoint, its title underwriter, and the lender as applicable.
5. An escrow is not a substitute for transfer approval
Do not promise an escrow without ClosePoint's written approval and any required lender and title underwriter approval. An escrow does not guarantee buyer acceptance. If approval is denied and a full buyout is required, an insufficient escrow leaves a shortfall. The buyer and/or seller must supply the additional funds as their written agreement provides. ClosePoint will not fund the shortfall.
6. Before confirming the closing
Realtors and attorneys: Obtain documents early, start the transfer, and allocate costs and denial risk in writing. Lenders: Confirm financing and priority requirements. ClosePoint staff: Verify record status, approve clearance, and track releases and recording. Have the documentation in hand and resolve the title requirement before proceeding. Please be guided accordingly.
References: Fannie Mae Selling Guide B2-3-04, Properties with Solar Panels; NJ Treasury, File UCC Financing Statements.
Loan-program and state requirements vary.
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