Albuquerque - Dealing with Solar already on a property questions

[Corban Kurz]

Greetings All...

I am curious if anyone has experience with Solar Contracts. 

The back story is that I have an off-market lead for a rental gone wrong that they want to sell quickly and easily. The mother (an older lady) bought the property her for her son who was renting it out. The son stopped being consistent with payments, and she has evicted everyone from the property. I like the property as it is basically like a duplex with a 3br, 2ba home and a separate 1br/1ba apartment/mother-in-law quarters. The property itself needs a little work, but is not in terrible condition. With both units, I like the potential for rent income. 

The main issue is Erus Energy got the son and mother into a recent Solar Contract for $45k with 20 years of payments at 3.99% for a payment of $280/month. I don't know why or how they thought this was a good idea, but I have no interest in the property with the solar contract. It appears to me that the solar contract remains with the signor (the mother) and they can lien the property senior to all other liens. 

Is there anything I can do to get them to remove the solar and buy the property without the risk of a lien? Anyone familiar with this?

[Andrew Smith]

Originally posted by @Corban Kurz:

Greetings All...

I am curious if anyone has experience with Solar Contracts. 

The back story is that I have an off-market lead for a rental gone wrong that they want to sell quickly and easily. The mother (an older lady) bought the property her for her son who was renting it out. The son stopped being consistent with payments, and she has evicted everyone from the property. I like the property as it is basically like a duplex with a 3br, 2ba home and a separate 1br/1ba apartment/mother-in-law quarters. The property itself needs a little work, but is not in terrible condition. With both units, I like the potential for rent income. 

The main issue is Erus Energy got the son and mother into a recent Solar Contract for $45k with 20 years of payments at 3.99% for a payment of $280/month. I don't know why or how they thought this was a good idea, but I have no interest in the property with the solar contract. It appears to me that the solar contract remains with the signor (the mother) and they can lien the property senior to all other liens. 

Is there anything I can do to get them to remove the solar and buy the property without the risk of a lien? Anyone familiar with this?

 Typically if the system is a lease or PPA then the lien will stay with the property so you would either assume the lease/PPA or buy off that agreement and own the system.
If the system is owned, then typically the system will be covered by UCC1. This means that the equipment would be recovered in the event of a default.
If it's an owned system then it will appraise fully. If it's leased/PPA then it will not.
In either event it sounds like you would have significant leverage to reduce the property purchase price and pay off the solar system. Raising the rent with the attraction of "power included" could be very attractive to renters with the caveat that they are responsible for excess power that would be billed by the utility.