CLTA News Express
An Express Article from the California Land Title Association
Solar Energy Contracts to be Recorded under New Legislation
Bulletin 08/09-38 - September 3, 2008
Assembly Bill 2863 (Leno), a piece of legislation that will require independent solar energy producers to make a disclosure to a buyer or lessee of property and to record a “Notice of an Independent Solar Energy Producer Contract,” recently passed out of the State Legislature and is now en route to the Governor’s office.
AB 2863 deals specifically with Solar Power Purchase Agreements (SPPA), an increasingly popular form of agreement that enables independent solar energy producers to generate power for sale. By requiring recordation of the aforementioned Notice document, the legislation is intended to give notice to potential buyers or lessees that a property is receiving part of its electric service from a producer that may own the system sited on the property or adjoining property. At the request of the CLTA, the legislation was amended to specify that the recorded notice does not constitute a title defect, lien, or encumbrance against the real property.
Under existing agreements to sell solar energy the providers typically purchase and install solar installations on a building and sell the electricity to the building owner. Under this bill, solar energy systems may be more likely to expand beyond individual building owners to Home Owner Associations and mobile home parks.
To facilitate disclosures to property owners an independent solar energy provider must provide a copy of the contract for the sale of electricity within 10 days from request by an owner or, with the consent of the owner, to a prospective buyer. The provider must also move with reasonable haste to conclude the transfer or deposition of the contract so as to facilitate the timely sale or transfer of the property.
