Buying a new or old house is a task involving dozens or even hundreds of different things to take care of. It may be especially tricky for the first time home buyers when you don’t know what to expect and what to check, so we lean to trust our realtor and home inspector.

Unfortunately some big corporations who provide home services, like Enercare, Reliance, etc. take advantage over consumers in such situations.

Here is one of the hundreds things which needs to be checked before agreeing on the final purchase price: is the hot water heater tank installed in the house rental or purchased in full.

Rental water heater means:

• Rental agreement will be transferred to you automatically (lawyer or seller will probably ask you to put initials in the purchase agreement to agree that the house has some rental equipment, but most likely nobody will show you the actual rental agreement). Whatever is written in the rental agreement is now purchaser’s obligation. I’m emphasizing – anything!
• $30-60/month and increasing rental rate. You’ll have to pay rental rate which will be charged on one of your bills (may be automatically added to Enbridge bill). To have an idea, for 50 gallon gas water heater tank the rate is $30/month now, and it goes up and up. It may be $50-60/month for larger water heaters
• $1000-$6000 cancellation fee. There is no way to terminate rent as we used to do (one month notice and 0-$75 fee for removal), if water heater was installed after Sep 15, 2010. The only way to terminate rent is to buy the water heater tank from the provider (Enercare, Reliance, etc…) according to their buyout schedule. Basically it is a cancellation fee if you want to purchase and install your own tank. It may vary from $1000 up to $6000 depending on the installation date and the model

For detailed information about rental water heaters, actual costs, anti-competitive assessment, Competition Bureau resolutions, buyout procedure, ways how to stop such unfair behavior, please refer to the previous article:

Anti-competitive Enercare rental water heater business scheme in Ontario

What can be done:

• If the deal is not done yet, if it’s not kind of “multiple offer” and you feel confident to continue price negotiation with the seller, you may want to ask reducing the price for the water heater buyout amount after you figure out how much it will be ($1000-$6000) and then just exercise your buyout option with the provider in order to avoid paying rent forever
• If the deal is closed, you’ll have to fight for your rights with water heater provider and probably with the help of Competition Bureau since such practice of Enercare and other companies look anti-competitive and violating Competition Act (for more details please refer to Anti-competitive Enercare rental water heater business scheme in Ontario)

Please share your experience in comments, it may be helpful for other home buyers!