Utilities, including British Gas and other providers are currently offering to take 25 year leases of roof spaces of residential dwellings to place solar panels on the roof.

The benefit for the home owner, aside from the knowledge that they have helped the environment, is that they may obtain around £1,000.00 per annum plus a feed in tariff for the sale of surplus electricity.

However, homeowners considering such an offer do need to take care.

The granting of a lease of the roof space to a utility provider is likely to create a “business tenancy”. As such unless proper notices are served before the tenancy is entered into then a protected business tenancy may be created. One consequence of this is that at the end of the lease term of 25 years the utility provider has a statutory right to renew the tenancy again and again.

The tenancy created over the roof space will bind future purchasers of the property and their mortgage lenders. Perhaps not everyone will be as keen to own a property subject to a business tenancy and the business tenancy may have a detrimental effect upon the value of the property. It is certainly a strange proposition that a part of a residential property could be subject to a business tenancy.

If the property is mortgaged the consent of the mortgage lender to the creation of a tenancy over any part of the property will be required. Failing to obtain consent would be a breach of the promises or covenants that the homeowner has given to the mortgage lender. The Council of Mortgage Lenders, being the body that represents the main mortgage lenders, has published guidance. Even if you do not have a mortgage following this guidance may be prudent to make sure that you do not create a problem for the future.

Finally, early in the new year look out for the “Green Deal”. This is to be a government backed energy saving scheme. It will allow owners of properties to increase the energy efficiency of their homes and pay for the cost of doing so by a charge on their energy bills over the following 25 years. This charge will attach to the property rather than the individual signing up for the Green Deal. This will affect any purchasers from you so you do need to be aware of the liability that it is creating.