Explaining a notice filing and how it’s not a lien

Tell me if you’ve ever heard this one before: you’ve decided to sell your home, and you have a solar energy system installed on your roof. You go to your bank and have them pull your records, and your bank says, “Actually, we can’t move forward with your home sale as it looks like Vivint Solar has placed a lien on your home.”

Sound familiar? It does to us. That’s okay though because today, we’d like the opportunity to set the record straight:

we don’t put liens on homes.

What they are confusing for a lien is a different thing entirely. We don’t put liens on homes, but we do submit a notice filing to your local jurisdiction, and that seems to confuse people a little bit. Let us be clear that a notice filing is absolutely not a lien, and in this article, we’re going to help you understand why. We’ll discuss what a notice on file is, how it works, why we submit them, how it’s not the same as a lien, why a third-party company might mistake it for one, and what you can do about it. Let’s get started.

What’s a notice on record and why do we implement them?

You may be asking yourself, “What the heck is a notice filing and why do you even bother with them in the first place?”

That is an excellent question and we can answer it for you.

Under a Power Purchase or Lease Agreement, after we install a solar energy system on your home, we contact your local jurisdiction and have them place a notice about the system on public record (this is also sometimes called a “fixture” filing (even though that’s not entirely accurate—more on that below), a “UCC-1” filing, or in California a “PUC” filing). To anyone looking up public records on your home, the notice declares that your solar energy system belongs to your solar energy company, if you are buying power or leasing equipment. In this case, Vivint Solar (that’s us).

Now, it’s important to keep in mind that we only submit a notice on record for homeowners who have signed a Power Purchase Agreement, also known as PPA, or a Lease Agreement. That’s because, for homeowners who have signed a PPA or Lease Agreement, we still own the system and therefore need to alert other parties of that fact. If you recall from your discussion with your Sales Manager, one of the benefits of signing a PPA or Lease Agreement is that we own, install, activate and maintain the solar energy system at no upfront cost. In return, pay for the energy your system generates.

If you signed a Loan or Cash Purchase Agreement, you own the system, so Vivint Solar does not need to record the notice filing.

Why do we do this, you may be wondering? A few reasons. First, we own the system and want to ensure we’re notified if you ever choose to sell your home in the future. If you ever go to sell your home, you, your agent and/or title company will see the record and know to contact us about the process of selling a home with a Vivint Solar system. Second, we want people who may be interested in buying your home to know that we own the system—doing so helps make things clear up front and avoids confusion down the road. Finally, in some areas, like California, the relevant filing is required by law—we don’t have a choice in the matter.

The good news is that the temporary removal process is really easy. As long as you notify us at least two weeks before closing (that timeframe is very important, so we highlighted it for emphasis), and have a buyer lined up, we’ll temporarily lift that notice filing so you can quickly and easily close on your home. When you’ve got a good agent or title company, be sure to let them know that we need at least two weeks to process the paperwork before your closing date.

What’s a lien, why does it matter, and why might a third party confuse it with a notice filing?

Let’s first address the questions, “What is a lien, and why does it matter?” One federal statute defines a lien as a “charge against or interest in property to secure payment of debt or performance of an obligation.”¹ It’s basically a document indicating that the person living at the home owes another party money. When people worry about a notice filing and use the word “lien” with respect to solar panels, they are basically saying that the panels are part of the house from a legal perspective and that the notice filing can affect the title of the home. Neither of these things are true.

First, if you are purchasing power from the solar energy system, or leasing the system, then Vivint Solar owns the system. You are “hosting” the system on your home—you don’t own the system. And though it is installed on your house, it’s not part of the house from a legal ownership perspective—you’ve just provided space for it to be installed.

Again, just so we’re clear, we do not place liens on homes, and the public notice that we file with your local jurisdiction is not a lien.

Why might a third-party confuse a lien with a notice filing? This is another excellent question that is a little more difficult for us to answer. The truth is that we’ll never be able to tell you exactly why a third-party might confuse a notice filing with a lien. We have ideas, conjectures, but we’ll never have a definitive answer because third-parties have their own records and processes to which we’re not privy (thankfully). The only thing we can assume is that liens and filings look similar, so your third-party may have used the term “lien” in error, without actually checking or verifying the actual record type. Again, this is just a guess on our part, but it makes sense. To do your own checking, we recommend that you call your third-party. Explain the notice filing to them, and have them check to verify the record they’re seeing in your name, because we promise you that it’s not a lien.

What’s the most important thing I need to know?

Regardless of the reason(s), the most important things to keep in mind are these:
1. It is not a lien—we do not place liens on homes.
2. It is temporary.
3. When you’re ready to sell your home, we will easily lift your notice filing as long as you give us at least two weeks’ notice and have a buyer lined up who will take over your contract.

If you’re ever curious, here’s an example of what a notice filing might look like. Keep in mind that notice filings vary by location, and that yours might look different than this, but hopefully this will give you a general idea of the form and filing process.

To find out what the notice filing looks like for the area in which you live, you can contact your local jurisdiction (usually the county) and request a copy of the form.

For more information on the home buying and selling process, check out our Home & Life Events section at vivintsolar.com/help. For all other questions, please don’t hesitate to call.

endnotes:
¹ 11 U.S.C.§ 101(37), available at https://www.law.cornell.edu/uscode/text/11/101.