How are leased solar panels handled on the statement of adjustments in Ontario?

Leased solar panels present a unique issue in Ontario real estate transactions. Unlike owned solar panels, which transfer with the property as a fixture, leased panels come with a lease agreement — a contractual obligation — that is tied to the panels rather than the owner. When a property with leased solar panels is sold, the buyer typically assumes the lease.

The key issue is disclosure: the seller must disclose the existence of the solar panel lease agreement before the deal is firm. The agreement of purchase and sale should acknowledge the lease and include the buyer's agreement to assume it. The lease terms — payment amounts, remaining term, buyout options — are relevant to the buyer's decision to purchase the property.

On the statement of adjustments, leased solar payments are generally not adjusted the way property taxes are. The lease is a contractual obligation that transfers in full; the buyer takes over from the closing date. However, if the seller has made any prepayments or if there are amounts outstanding, those might be negotiated between the parties. Your lawyer will review any solar lease agreement as part of the title and due diligence process and ensure your obligations are clearly understood before closing.