Deferring costs of Solar Panels
Member since 2019 · 31 posts · 2 votes
Deferring costs of Solar Panels
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7yIf its not in the lease, its not their responsibility.
District Invest Group545 Reviews
41 Replies
- Member since 2019 · 31 posts · 2 votes7y
Originally posted by @Steve Milford:
@Laura Yoerger
If the solar panels are leased, it creates a lien on title as a financed item.
Talk to a lawyer, but I don't think you can pass it on. If it was me, I would just accept it as lessoned learned and look at firing this PM. I looked to hire a PM so I could be hands off last year. All quotes I received was for rent lower than I wanted and in fine print, they were just messenger anyways. I chose to go with cozy.co, charge the rent I wanted and use a maintenance co for repairs as they come up. For any lessons learned like you have, then I will just increase rent next time around.
@Steve Milford:
Thank-you for your input Steve!
I will be contacting a lawyer and CPA about this next week.
The house is renting for $2500 a month. Most people are saying that is already on the high end for the Cornelius area and it certainly more than adequately covers the mortgage, taxes, & insurance.
The tenants have already made it known that they won’t stay if the rent is raised. Except for this issue they are being good tenants. They pay the rent on time, take good care of the home, let it be made known immediately if there is something major wrong, and make little repairs themselves without complaining.
We just need to resolve this issue of who is legally responsible for the solar city bill.
- Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes7y
@Laura Yoerger
After reading a few more posts...I was in similar scenario as house wasn't selling. I would say when you look at whole scenario, if you fire PM you will probably make enough to cover that solar lease. Also look at renter, imo rent payment tolerance (whether or not it is a good deal perceived by tenant) is directly relational to complaint level. I estimated rent with CL and then charged $100 less per month and allow big dogs. I know, I will have to replace floors and paint, and other repairs when they leave, but I vacancy anytime soon. Plus I don't receive complaints. When major things break, I fix prompty. Recently, I looked at water usage and I was shocked at how much water they were using but they are a larger family too. But looking at past months it trended same.
- Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes7y
@Laura Yoerger
Ultimately the owner of the property is responsible for the solar panel lease. If it is not spelled out in the lease, it is not their responsibility. The lease is not a utility, it is for the cost of equipment, as an appliance. Would you consider a leased washer and dryer a utility?
- Member since 2019 · 31 posts · 2 votes7y
Originally posted by @Steve Milford:
@Laura Yoerger
Ultimately the owner of the property is responsible for the solar panel lease. If it is not spelled out in the lease, it is not their responsibility. The lease is not a utility, it is for the cost of equipment, as an appliance. Would you consider a leased washer and dryer a utility?
@Steve Milford
Good point, Steve!
I guess it was just being looked at as part of the electric bill since the panels are supposed to lower their PGE bill.
- Real Estate Agent · Portland, OR · Member since 2013 · 412 posts · 219 votes7y
Steve brought up some great points, and helps to know that it was for sale. Was the house tenant occupied when for sale? An occupied SFR is a tough scenario for selling!
Without knowing goals and strategies it’s hard to say, but sounds like sticking out the lease and then selling is a good course of action. Of course, as a rental now you’ll have capital gains to deal with.
Either way, a lot of this likely could’ve been prevented with good Property Manager up front. Shoot me a PM if you want a couple referrals to PMs for you to talk with if you’re considering a change.
Best of luck!
Mathew
There’s a $100/mo water charge? Is it like NLV where that includes garbage, sewer, and recycling? If not, man are they sticking you guys in utilities. Here isn’t eh desert it’s hard to get a $50 water bill in the summer, $30 in the winter.
- Member since 2019 · 31 posts · 2 votes7y
Originally posted by @Mathew Wray:
Steve brought up some great points, and helps to know that it was for sale. Was the house tenant occupied when for sale? An occupied SFR is a tough scenario for selling!
Without knowing goals and strategies it’s hard to say, but sounds like sticking out the lease and then selling is a good course of action. Of course, as a rental now you’ll have capital gains to deal with.
Either way, a lot of this likely could’ve been prevented with good Property Manager up front. Shoot me a PM if you want a couple referrals to PMs for you to talk with if you’re considering a change.
Best of luck!
Mathew
@Matthew Wray
No the home was not tenant occupied. It was owner occupied. The plan was to sell it, after living in it for over a decade, and move to the coast. But the home was not selling so renting it instead made sense so that the plans to move to the coast could go forward.
Having a continual flow of income from the home for years to come also made sense and was appealing. The income will come in handy now that the children are grown, gone, and retirement is finally here.
- Real Estate Agent · Portland, OR · Member since 2013 · 412 posts · 219 votes7y
What a great gift to yourselves as you enter retirement...congratulations! It's what most all of us are working towards and why many are in real estate to begin.
Just one piece of unsolicited advice (that you are likely already aware of): Keep in close contact with a CPA before you approach the three and four year mark for the home being a rental. As the rules stand now, if you do decide to sell in the future, you stand to save a ton on capital gains taxes if you sell it as a personal residence that you've lived in for 2 of the last 5 years vs. deciding to sell in 6+ years and paying back depreciation, capital gains, etc. Half the benefit of owning real estate/rentals is in the taxes, so just make sure you've got reminders on your calendar to assess where you stand at regular intervals!
Enjoy your retirement!!
- Member since 2019 · 31 posts · 2 votes7y
Originally posted by @Mathew Wray:
$130/month times two units times 12 months is $3,120 a year. That’s not chump change and I understand why you’d like to defray the costs associated with it. But, it sounds like it wasn’t clear in the lease up front.
Could you go to a lawyer, have them research, and potentially go to court to solve the problem...I’d say yes, but at what cost and headache to you? With our tenant friendly state, do you want to risk losing in court and being out fees on top of the income? Is that Wirth your time?
What about your tenants? If a landlord would’ve taken me to court I would’ve left post-haste so now you factor in an early or contested (you know any charge you make them while moving out is going to be challenged as retribution) vacancy and how much does that cost you?
Although it stings, I’d shelve the request and wait until the leases are up, then clearly define who’s responsible for the payments. In the meantime, just chalk it up to a learning experience.
Mathew
@Mathew Wray
Does clause 11 give us the right to raise the tenant’s rent before the current lease is up, to cover the solar lease fees?
Could tenants fight a rent increase in Oregan courts as retribution or retaliation against them for not paying the solar lease fees?
- Real Estate Agent · Portland, OR · Member since 2013 · 412 posts · 219 votes7y
Morning Laura!
The picture you tried to attach (I'm assuming of the lease) didn't come through so I can't see what clause 11 is. Likely, even if I could see it, I would recommend checking with an attorney. I'll certainly have opinions about it but my opinions aren't those of an attorney. If you need a good one, PM me and I'll connect you with a couple who can give specific advise about your specific case vs. general guidance.
I think any tenant can fight just about anything in court here! There are attorneys that target landlords for lease violations, so it's totally possible that they could go to court and make a case for retaliation or retribution. Again, I'm just talking in general here and at this point would really advise you getting an attorney's advice.
- Member since 2019 · 31 posts · 2 votes7y
Originally posted by @Mathew Wray:
Morning Laura!
The picture you tried to attach (I'm assuming of the lease) didn't come through so I can't see what clause 11 is. Likely, even if I could see it, I would recommend checking with an attorney. I'll certainly have opinions about it but my opinions aren't those of an attorney. If you need a good one, PM me and I'll connect you with a couple who can give specific advise about your specific case vs. general guidance.
I think any tenant can fight just about anything in court here! There are attorneys that target landlords for lease violations, so it's totally possible that they could go to court and make a case for retaliation or retribution. Again, I'm just talking in general here and at this point would really advise you getting an attorney's advice.
@Matthew
Good morning Matthew,
First, how do you get your @Laura Yoerger to be hyperlinked and able to send me a notification that you mentioned me?🤔
Clause 11 reads: The Landlord may increase the Rent for the Property upon providing to the Tenant the greater of 30 days’ notice and any notice required by the Act.
I would appreciate your lawyer friends contact info but being new here I don’t know how to PM.🥴
- Real Estate Agent · Portland, OR · Member since 2013 · 412 posts · 219 votes7y
To do the hyperlink, hit the @ symbol and then the first few letters of the person's name. You'll see a little drop down menu with options. Click the person you want to link and their name will show up. To PM, click on a picture and it'll ask you to connect and send a message with it.
It seems reasonable that you can give notice, but you still need to abide by the laws around how many days notice, how you deliver, their lease lengths, and timing around those issues. In Oregon it is super important to make sure you abide by the terms of the lease otherwise you are going to be liable for damages.
Give me an email (contact info in my signature) and I'll connect you with an attorney to talk through specifics.
- Member since 2019 · 31 posts · 2 votes7y
I have another question. Can I force my tenants to pay back the credit they received off of their PGE electric bill because of the solar panels?
- Member since 2019 · 31 posts · 2 votes7y
Okay, guys. I have another question. Can the tenants be forced to pay back the credit they received off of their PGE electric bill because of the solar panels?
- Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes7y
"Forced" is a pretty strong word. I would consult with a lawyer about that.
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