I saw a nice property that I want to flip (in NJ). this property has solar panels on the roof which I plan to remove (house needs new roof). the property is sold in an as is condition (short sale). I wonder if the lease of the solar panels will transfer to the new owner or they are leased personally to whoever bought them and I wont have to assume the lease if I to buy the house. It'll heart me selling a house with solar panels debt attached to the house.
Only the owner can answer that. Leases don't automatically transfer.
The lease will be a lien on the house, they don't automatically transfer unless you agree to take it over.
For the lease to be enforceable, it should be recorded. Do you know if the lease was recorded? If not, it would not show up in a title search and I wouldn't worry about it
Chris Martin absolutely has the right idea and the Company should record it for their own protection. BUT States' regs vary on whether a Lease "should" or "must" be recorded to be enforcable. So, know your laws and watch out for that one. In my experiences, very few of these companies do it right.
Additionally, just to be very precise, no one (smart) records the Lease, because it contains the financial data, and no one (smart) wants to be negotiating against themselves based on the Public Record during every transaction. What you'll find on record is an abstract. It should be a "Memorandum of Lease" or a "Notice of Lease."
Are you sure it's a Lease? Technically, It will matter whether it's a Lease or a License. If it's a Lease, it CAN carry over to the new Owner. If it's a license, it should not. On the other hand, if it's a Power Purchase Agreement... just duck. It's not even a Lease, it's a business scheme (term used loosely.) There'll be a ton of hoops to jump through up-to and including the termination of Fixture Filings (UCC-1, UCC-3). These are the ones that can really tie up your transaction.
Other than the new roof, why are you interested in terminating this thing? Maybe you can buy it out and turn it into an asset for a new owner.... for a price, of course. You pay $30K, and add it back into the deal for $45-60K, with a promise of no/reduced energy bills for the New Owner. Do you know the size of the system/watts on the panels?
@Steve I Agree with your detail on the recording of the specific lease. The important information is the public notice, which is often memorialized in a memo rather than the actual lease.
An independent, third-party Observer, like an attorney closing a real estate transaction, will generally not be able to see anything other than recorded information.