Selling with a Solar Agreement – 10 Tips for Guiding Your Clients

Jul 12, 2023 | Uncategorized

The solar industry is booming. There are currently more than 1.5 million residential solar installations in the U.S. and that number is projected to reach nearly 4.2 million by 2024. Solar panels have become such a popular energy solution that in May 2018, California regulators approved a plan to mandate solar panels on all new home construction. Soon, this type of legislation could come to other sunny states to reduce environmental footprints.

One way builders and homeowners are looking to install solar systems is through a lease or power purchase agreement (PPA) (i.e., a “solar agreement”) with a third-party solar provider. These solar agreements are currently available in a little over half of all U.S. states, and provide homeowners with a way to use solar panels without the upfront cost of purchasing a system. But solar agreements are known to create unique challenges when selling a home.

Some issues that sellers have experienced so far include:

• Buyers shying away from a house because of the solar agreement (due to things like lease length, lease payment, lease contracts, maintenance considerations, technology obsolescence and more)
• Buyers who may not meet the solar company’s qualifications to lease
• Potential issues involving the proper transfer of the solar agreement

If you’re working with a seller who currently owns a home with a solar agreement, you may be able to help them navigate complications with the sale. While every situation is different, here are a few steps to consider:

1. Start early: If you represent the seller, ask them early in the selling process whether the property is tied to a solar agreement. The terms for transferring a solar agreement may impact the marketability of a property, and disclosure to potential buyers is important.
2. Request a copy of the solar lease agreement: Ask your client for a copy of the current solar agreement. If they don’t have a copy, they should request it from their solar company.

3. Seek advice. Unfortunately, misconceptions about solar agreements are common. It’s important that buyers and sellers fully understand the terms of their solar agreement, including its transfer rights and requirements at the time of the sale of the home. Many solar companies have dedicated representatives to assist with the lease transfer process, but you may wish to advise your clients to consult with an attorney first.

4. Cover all your bases: When selling a home subject to a solar agreement, it helps to work with a trusted company like Old Republic Title. We can alert you to potential title problems, such as an unrecorded solar easement and other possible title issues that need to be addressed prior to closing.
5. Keep lines of communication open: Early in the process, provide your closing team with as much information as possible about the transaction. What they don’t know could cause delays to the closing process.
6. Highlight the Value of Solar Power: Homeowners should be encouraged to emphasize the financial and environmental benefits of owning a solar power system. These advantages include substantial savings on utility bills and a reduced carbon footprint, which can be attractive selling points for potential buyers.
7. Get an Appraisal: A fresh appraisal of the home that takes the solar panels into account can add significant value to the property. An experienced real estate agent or appraiser can assist in this process to ensure an accurate valuation.
8. Prepare Necessary Documentation: Homeowners should be encouraged to gather all documents related to the solar system, including warranties, service agreements, and details about the system’s ownership. This information can be helpful to potential buyers and increase their confidence in the purchase.
9. Feature the Solar System in the Listing: The solar system should be prominently mentioned in the home’s listing. Homes with solar panels can sell for more than homes without, so it’s important to highlight this unique feature to attract potential buyers.
10. Clarify Financing Details: If the solar system was financed, homeowners should be aware of the requirements and liabilities associated with this. An experienced agent can help explain these details to potential buyers, ensuring a smooth and transparent transaction.

If you would like to learn more about how you can guide the sale of a home subject to a solar agreement, or find out what information your closing team might need, contact your Old Republic Title representative today.

Execution of Documents in a Foreign Country

Jul 10, 2023 | Uncategorized

When sellers or buyers meet with the closing agent/attorney to sign their closing documents, it is easy to take for granted the formalities that are required for properly executing a deed or mortgage and other closing documents. Even if the signer is in another state, usually they have access to a notary public at their bank or a local business, and with careful instruction from the closing agent to the notary, the requirements are easy for the signer to complete. However, early and careful planning is needed to ensure the required services and facilities are available so that closing will not be delayed when the signer is in a foreign country.

All the same formalities which are required in a particular state are required when documents are executed out of the country.  For example, for documents to be validly recorded with the land evidence records in the State of Connecticut, the documents must be in writing, properly acknowledged, and attested by two (2) witnesses. Please be sure to confirm the requirements of your particular State when sending documents to be executed in a Foreign Country.  A proper acknowledgment can generally not be achieved by simply executing the documents before a foreign notary.  To obtain a proper acknowledgment of a document, it is best to execute the document at the American Embassy located in the country in which the signer is located.  The notaries at the American Embassy are not considered “foreign”.  This requires early planning, as the embassies and consulates generally require an appointment for this service, and often are booked several weeks out. Therefore, your client should  contact the Embassy well in advance to schedule the notarial service. No seal or further authentication is required if executed at the Embassy.

It is also possible to have a document notarized by a local foreign notary, but an additional step is required.  Specifically, the notarization must be authenticated for use in the United States.  In countries that are party to the Hague Apostille Convention, this is a simplified process that does not involve Embassies or Consulates. In times past, figuring out the various unique legal requirements of multiple nations was difficult. The confusion not only slowed down the processing times, but also led to widespread fraud that was hard to detect. In response, Apostille laws were agreed upon by a large number of countries and signed at a Hague convention in 1961. See the Hague Conference website for complete information on the Apostille process. Apostilles authenticate the seals and signatures on public documents.

If your document is acknowledged by a person authorized to perform notarial acts by the laws or regulations of a foreign country, such as a Notary Public, Judge, Clerk or Deputy Clerk of any court of record, then such acknowledgment must contain the official seal of the person performing the notarial act.

Notwithstanding the foregoing, your State may have certain statutory provisions and Standards of Title sections that sanction and authorize the notarial act. Pursuant to the Connecticut General Statutes, Uniform Recognition of Acknowledgment Act, Section 1-57 et seq., if the notarial act is performed by a person authorized by the laws or regulations of a foreign country to perform the act, there is sufficient proof of the authority of that person to act if the official seal of the person performing the notarial act is affixed to the document or the title and indication of authority to perform notarial acts of the person appears either in a digest of foreign law or in a list customarily used as a source of such information.

Credit: Stewart Title

Hiring a Realtor when buying or selling a house is a smart choice.

May 1, 2023 | Uncategorized

Buying or selling a house can be a complicated and time-consuming process, and for most people, it’s the biggest financial transaction they’ll ever make. That’s why it’s crucial to work with a real estate agent who can guide you through the process and help you make informed decisions. Here are some reasons why hiring a Realtor is so important:

1. Knowledge and expertise: Real estate agents have a deep understanding of the local market, including current trends, pricing, and inventory. They can provide valuable insights that can help you make informed decisions about buying or selling a property. Realtors are also familiar with the legal and financial aspects of real estate transactions, and they can help ensure that all paperwork is completed correctly and on time.
2. Marketing and exposure: When selling a property, real estate agents can use their marketing expertise to attract potential buyers and increase exposure. They can create professional listings, take high-quality photos and videos, and promote the property through various channels, including online listings, social media, and open houses. This can help attract more potential buyers and increase the chances of a successful sale.
3. Negotiation skills: Negotiating a real estate deal can be complex and challenging. Realtors have the experience and negotiation skills to help you get the best possible price for your property, whether you’re buying or selling. They can also help you navigate any issues or conflicts that may arise during the transaction.
4. Professional network: Real estate agents have access to a vast network of industry professionals, including home inspectors, contractors, and attorneys. They can recommend trusted professionals who can help you with any aspect of the transaction, from inspections to repairs to legal issues.
5. Save time and reduce stress: Buying or selling a house can be a time-consuming and stressful process. Working with a real estate agent can help you save time and reduce stress by handling many of the details for you. They can coordinate showings, handle paperwork, and communicate with other parties involved in the transaction.

In conclusion, hiring a Realtor when buying or selling a house is a smart choice. Realtors have the knowledge, expertise, and resources to help you navigate the complex real estate market and make informed decisions. They can also save you time and reduce stress by handling many of the details for you. If you’re buying or selling a property, consider working with a real estate agent to help you achieve your goals.

Vacant Land Fraud

Mar 31, 2023 | Uncategorized

The U.S. Secret Service has seen a sharp increase across the country in reports of fraud involving vacant land. A common scheme playing out in the current real estate market involves scammers posing as owners of vacant land, wanting to sell quickly for cash at below market prices who then disappear without a trace. An unknowing buyer winds up with no land and the loss of a lot of money with little to no chance of recouping those funds. This can occur with both residential and commercial land.

The recent tactics the scammers have implemented begins with scammers researching local land records to find vacant land with no liens or encumbrances. Once they have identified the owner of the land, they pose as that owner and contact a realtor to list the property for sale. It is common that they will list the property at below market value for a quick sale and indicate a preference for a cash sale. They typically communicate only by email or text. They will arrange for their own notary signing of documents and claim to be in another state or another country. The purported notary is likely to be one of the fraudsters using the identity of an actual notary. They may even be signing by power of attorney and the attorney-in-fact is not local. At the time of closing, the closing attorney or title company transfers the proceeds to the scammer. The fraud is typically not discovered until after the sale has been consummated.

We’ve heard that these frauds are happening in New England. In one such incident that was shared with us, the seller claimed to be in South Africa and obtained the identity of a notarial officer in the embassy consulate and produced a deed that appeared to be officially notarized. The fraud, in this case, was discovered after the deed was accepted by the local recording office and funds disbursed. Although unconfirmed, we have reason to believe someone at the local recording office, handling the deed as part of the office’s administrative tasks, recognized the name of the seller as a friend and contacted the true owner and asked if they had sold their property. This led to the discovery that true owner had no knowledge and had not put the property up for sale.

Another scammer claimed to be in California and was planning to sign the deed with a power of attorney. This was a near miss as the buyer had a question about a zoning issue and called the seller who knew nothing about the proposed sale.

The Rhode Island Association of Realtors recently published an article on this type of fraud. The article identifies several cases of vacant land fraud schemes attempted in Rhode Island and lists several actions a real estate broker or sales person can take to avoid becoming an unwitting facilitator in the schemes. To read the article, follow this link: 

Here are some tips on how to prevent a loss from a vacant land scam:

1. Be on alert when your transaction is for vacant land.
2. Send an introductory letter to the seller at their address as it appears in the Tax Assessor’s database, confirming that they are selling their property. Stewart Title has a template for a seller letter available in this bulletin by clicking the “form” link: https://www.virtualunderwriter.com/en/bulletins/2022-4/sls2022004.html
3. Independently do an online search for the identity of the seller.
4. Require the seller to show ID over a virtual meeting.
5. Verify the notarial officer in the state or country they are from and contact that officer to confirm they notarized the document in question and reviewed the seller’s ID.
6. Subscribe to a service that can confirm wire instructions for your seller.
7. Pay attention to a feeling that all is not right with this transaction.
8. Make sure your staff is aware of this type of risk.
This list is not exhaustive, and awareness is key. Scammers are always looking for the next best way to part people from their money and this particular type of fraud is incredibly costly. In a challenging real estate environment, we are all at risk. Our diligence is the best tool for us to avoid this type of scam.
Stewart Title has a recent Bulletin regarding this topic that you should find helpful and, as always, please reach out to your local underwriter if you encounter any red flag or have questions.

https://www.virtualunderwriter.com/en/bulletins/2023-1/sls2023003.html