Expert queries solar panel ownership

A law lecturer has questioned whether solar panels are chattels or fixtures.

Another legal expert has raised concerns about the ownership of solar panels fixed to homes, backing this month's warning from Auckland District Law Society vice-president Joanna Pidgeon.

Barry Allan, an Otago University senior law lecturer, questioned whether the panels were chattels or fixtures after Pidgeon said power companies owned the panels but homeowners and buyers often did not know this.

Sandy Hodge, Vector spokeswoman, said her firm was happy to brief the Real Estate Institute on solar panel ownership and said there were no ownership issues with the SunGenie solar panels when a home is sold because the contract lays out all the options available.

Allan questioned that.

"The situation is even more complicated than the power company is suggesting, although more consistent with what homeowners expect, curiously enough. Most people would be affixing solar panels for the long term, perhaps the whole life of the panels, and certainly for the better enjoyment of the land. This means that there is a good argument that they are fixtures, not chattels," he said.

If they were fixtures, they would be sold with a property and not be under the power company's control.

"The power company has retained title but since 2002 this just means that they have a personal property security interest. Their problem is that once chattels become fixtures, the chattel no longer exists, so the personal property security no longer has anything to which it can attach: instead they are deemed to form part of the land, to be sold with the house and subject to the mortgage, not the power company's security at all.

"We have yet to see a court decide whether solar panels are fixtures, but the principles point strongly in that direction," Allan said.

Pidgeon said there was a lot of case law over the grey area where chattels merged into becoming fixtures, the key principles to apply being the degree of annexation to the property and the size and weight of the objects.

"Traditionally solar panels are usually listed in a sale and purchase agreement as being chattels, whether they are included or excluded from sale. In those cases there doesn't need to be a determination as to whether they are chattels or fixtures as the parties have agreed to treat them a certain way.

"If there was a solar panel installed, belonging to, say, Vector contractually with the vendor, and the sale and purchase agreement made no reference to the solar panel, a purchaser could make an argument that they were a fixture and they got title to them with the property. Vector would be left trying to argue that they were a chattel rather than a fixture.

"As Barry states, we have yet to see the test case as to whether they are a chattel or a fixture, probably partly because they are usually referred to as a chattel in agreements, whether or not that is technically correct."