You’re preparing to sell your home or refinance your mortgage. Everything is going smoothly until you get a stunning call from the title company: “We can’t proceed. There’s an active lien on your property from a solar finance company.” For thousands of homeowners, this is the moment they first learn that their solar “savings” came with a serious, hidden encumbrance on their most valuable asset.
Discovering a solar panel lien on your house can be a confusing and frightening experience. Was this legal? Can they foreclose on your home? How do you get it removed? This guide will explain what this lien is, why it’s there, and what your rights are as a homeowner.
What is a UCC-1 Lien? (And Why Is It On My Property?)
First, it’s important to understand what this lien typically is and isn’t. In most cases, it is not a mortgage. The company cannot foreclose on your house if you miss a solar loan payment.
Instead, it’s usually a UCC-1 financing statement. In simple terms, this is a legal notice filed by a lender to publicly declare that they have a “security interest” in the personal property that was used to secure a loan—in this case, your solar panel system itself (the panels, the inverters, etc.). This gives the lender the right to repossess that equipment if you default on your loan.
So why does it show up on your home’s title report? Because the solar equipment is physically attached to your house, it is considered a “fixture.” The UCC-1 filing is therefore recorded as a “fixture filing” against your real property records. This “clouds” the title, meaning you cannot cleanly sell or refinance the property until the lien is resolved.
Is This Legal? The Critical Issue of Disclosure
The existence of a UCC-1 lien itself is a standard, legal part of most secured financing agreements. The real issue, and the area where many solar companies get into legal trouble, is a failure of disclosure.
The problem isn’t the lien; it’s that the salesperson likely never used the word “lien.” They probably told you the loan was “unsecured,” or simply focused on the low monthly payment while completely glossing over the fact that the financing agreement was a secured debt that would attach to your property.
This failure to clearly and transparently disclose the nature of the loan and the resulting lien can be a significant violation of both federal and state consumer protection laws, including the Truth in Lending Act (TILA) and state-level deceptive trade practices acts.
How a Solar Lien Impacts Selling or Refinancing Your Home
This is where the problem becomes a crisis for most homeowners. When you go to sell your house, the buyer’s mortgage lender will not approve their loan until your title is clear of any other primary claims. The solar lien must be resolved.
Typically, this means your solar loan must be paid off in full from the proceeds of the home sale before the title can transfer to the new owner. For a homeowner who wasn’t expecting this, it can mean tens of thousands of dollars are suddenly deducted from their home sale profits, a devastating financial shock that was never mentioned by their salesperson.
What to Do If You Discover an Unexpected Lien
If a solar lien has come as a surprise to you, you need to take immediate, structured action.
- Review Your Contract Immediately: Carefully read your original loan agreement. Search for the terms “security interest,” “UCC-1,” “fixture filing,” or “lien.” The language is likely in there, but it may have been minimized or obscured.
- Contact the Lender, Not the Installer: Your relationship is with the finance company. Contact them and request a “payoff statement” to understand the full amount required to clear the loan and release the lien.
- Seek an Expert Review: If you believe the existence and implications of the lien were not clearly explained to you during the sales process, you may have a strong case for deceptive practices.
At SolarDispute.com, a core part of our case review is a forensic analysis of your financing agreement to determine if all security interests and liens were transparently disclosed according to law. Uncovering a disclosure violation provides the powerful leverage needed to build your case and fight back.