They are trying to put you on hook by any means, like advertising the following things:
- Peace of mind
- Avoiding breakdown costs
- Affordability
- Worry free
- Great customer service
- No additional costs
- No hidden fees
- “Free” stuff when signing contract like “$200 prepaid Mastercard” from Enercare
Let’s see how much all these nice things really cost.
Rental rate for 50 gallons gas water heater is about $30/month. It comes up to $360/year. Taking approximate life of a water heater as 15 years we are basically paying $5400 for water heater with installation assuming that the rental rate won’t increase over this time. But I bet it will. It may easily become $60/month in 15 years, or even more. Assuming the rental rate will go up by $2/month every year during the next 15 years, we are getting $8100 for water heater from Enercare. Is this a reasonable amount? Let’s see.
You can buy a new 50 gallon water heater for approximately $1000 with taxes included and have it installed for $300. Let’s say $1500 all in – it’s a very reasonable price now for great 50 gallon water heater with quality installation and exhaust pipes upgraded.
Just read it: “I will pay $8.1K – over eight thousand dollars – for water hater which costs $1.5K, and will have “piece of mind” – this is what I’ll pay extra $6.6K for”.
$6.6K for “piece of mind” about water heater for 15 years. Service call usually costs $100 – this is official price of big box stores. Usually it comes down to ~$40-60 if detecting a problem takes about 15 minutes which is usually true for such a simple thing like water heater. If your heater is on warranty it may be even covered. If something serious breaks down – it is either covered by warranty or you buy a new water heater with installation for $1.5K if it is already old enough.
Let’s calculate a bit further. Assuming water heater purchase with installation will be increased twice over the next 15 years to approximately $3K with $2.25K average price, we get $8.1K/($2.25K) = 3.6, which allows us to buy a new water heater with installation approximately every 4 years.
For the price being paid for rent to Enercare consumers may buy new water heater with installation every 4 years. Given that average life of water heater without major repairs is approximately 15 years, we see that renting water heater is 3-4 times more expensive option than purchasing and installing your own hot water heater tank.
- Washer/dryer
- Dishwasher
- Stove
- Maybe TV or some furniture?
- Toilet or vanity?
How about paying $30/month for your fridge forever which costs about the same as water heater?
This is what happens after you enter into rental water heater agreement with Enercare:
The only way to terminate rent is to buy out the water heater tank for the price Enercare sets on their website in buyout schedule:
https://www.enercare.ca/sites/default/files/assets/library/pdfs/water-heater-buyout-schedule.pdf
Depending on the water heater type the penalty to terminate rent varies from $1000 to $6000.
For example, the penalty to terminate rent during the first year of 50 gallon water hater with power vent (PV50 in the Enercare’s table) is $1590 + Tax, which is $1796.7.
Penalty to terminate rent for PV50 during 5-th year comes down to $1462.22 which is still a lot. Even during the 10-th year the penalty to terminate rent will be $914.17.
Have you ever seen such outrageous penalties to terminate rent of anything or to terminate any customer’s contract of approximately the same $30/month value?
Water heater rental companies such as Enercare do not give customers any other choice other than to continue rent forever or pay ridiculous termination penalty of thousands dollars. This is valid for water heaters installed after Sep 15, 2010. It looks like it was intentionally introduced by huge corporations such as Direct Energy, Enercare, Reliance home comfort, in order to eliminate the practice of customers jumping to competitors with lower prices.
Such insane terms of terminating rent are captured in Enercare’s rental agreement:
“Termination by You: Your sole method of terminating this Agreement prior to the end of the useful life of the Water Heater is to purchase the Water Heater”.
Anyone can write in the contracts whatever they want, but there is a law which always has more power than any contract!
What the law says with respect to this practice which looks very unfair to consumers leaving us no choice in switching to more competitive options?
There is a Canadian Competition Act C-34:
http://laws-lois.justice.gc.ca
It clearly says:
“The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices”.
How does it apply for water heater rentals?
Let’s read it again:
“… in order to provide consumers with competitive prices and product choices“.
As we have calculated, the option of renting 50 gallon water heater with power vent from Enercare is approximately 3-4 times more expensive than the option of purchasing and installing a new water heater. Even taking into account that along with rent Enercare provides service in case of problems (which may be covered by warranty), buying your own water heater is much more competitive option given that for the same money you pay to Enercare for rent you can afford purchase and installation of a new water heater every 4 years. However it doesn’t need to be replaced so often, since its lifetime without major repairs is about 15 years.
Let’s see example if I’m a customer of Enercare renting 6 years old 50 gallon water heater for $30/month which was installed in Nov 2010. I realize that buying my own water heater with installation will cost $1300. If I keep Enercare’s contract and continue to pay rent, I will spend $1300 in 3 and a half years. I’m pretty sure that the new water heater will last longer. Moreover it will have warranty coverage during this time. That’s why this option is much more competitive. I need to terminate rent with Enercare first and they ask to pay approximately $1100 – $1200 cancellation fee (depending on the exact buyout schedule), since buyout is the only option to terminate rent. I don’t need this 6 years old water heater which may be out of warranty for $1.2K, I want a new one with warranty for $1.3K and Enercare to pick their heater from the curb for free as it used to be in the past. Basically for me Enercare imposes rent termination penalty of $1.2K. It clearly looks like Enercare is violating Competition Act in this case.
Let’s see another example, I want to switch to another water heater rental provider who charges $19/month for the similar water heater. Enercare does not allow me to do so by imposing $1200 penalty to terminate their rental agreement. I want to rent water heater, but want to pay less for it. It also looks like Competition Act violation by Enercare.
What does the Canadian Government do in order to enforce Competition Law with respect to water heater rentals anti-competitive practices of Enercare and other companies?
Unfortunately, it looks like not enough, since such outrageous rent termination fees are still part of Enercare’s residential water heater rental agreement. Enercare is even increasing those penalties more and more.
Competition Bureau at least tried to do something, but without any effect for the customers unfortunately. Here is what Trueler found:
“Competition Bureau Takes Action to Support Competition in Ontario’s Residential Water Heater Market“:
Some quotes from the document:
“OTTAWA, December 20, 2012 – The Competition Bureau announced today that it is taking action against Direct Energy Marketing Limited and Reliance Comfort Limited Partnership, two companies that rent water heaters to residential customers in Ontario”
“Following an extensive investigation, the Bureau determined that Direct Energy and Reliance each engaged in practices that intentionally suppress competition and restrict consumer choice. Specifically, each company implemented water heater return policies and procedures aimed at preventing consumers from switching to competitors. This anti‑competitive conduct affects consumers, other rental water heater companies, and businesses that sell water heaters, such as home improvement centres.”
“Many customers have been forced to continue their rental agreements with either Direct Energy or Reliance, even if they want to switch to another provider, because of the anti‑competitive practices we found in our investigation.”
Here is the resolution from Competition Bureau as of October 30, 2015:
“Agreement with Direct Energy to resolve concerns in Ontario water heater industry”:
http://www.competitionbureau.g
 “In December 2012, the Bureau filed applications with the Tribunal against Reliance Comfort Limited Partnership and Direct Energy. The applications alleged that both companies had implemented anti‑competitive water heater return policies and procedures aimed at preventing consumers from switching to competitors. The Bureau alleged that, as a result of those practices, many customers were left with little choice but to continue their rental agreements, even if they wanted to purchase a new water heater or switch to another rental provider. For consumers who wish to purchase new water heaters, instead of continuing to pay rental fees, this is an important issue. The decision to purchase, rather than rent a water heater, can lead to substantial savings for consumers.“
“In November 2014, the Bureau obtained commitments from EnerCare Inc., the company which acquired Direct Energy’s water heater rental business in Ontario, that it would not continue Direct Energy’s alleged anti‑competitive policies and practices. At the same time, the Bureau announced that it had reached a consent agreement with Reliance that resolved the competition concerns raised by the Bureau”
Based on this information it looks like Enercare is breaking its own commitments to Competition Bureau as well as violating Competition Act.
Whenever I talk to contractors about water heater rentals, everyone is calling it a scam. They are frustrated as well as customers, since huge corporations, like Enercare, Direct Energy, Reliance home comfort, National Energy, Enbridge have basically stolen huge part of water heater business from contractors by specifying anti-competitive rent termination conditions in their water heater rental agreements preventing consumers to switch to more competitive options.
Even if Competition Bureau is not doing further steps in order to enforce Competition Law and commitments from Enercare, it’s still beneficial to stop renting water heater right away and buy it from the provider for their buyout price. Just divide your buyout price at this moment by your monthly rate and see that it may take just around 3-4 years in order to spend the same amount of money for paying rent. Even if you are going to sell you house sooner, new owners will say a big “thank you” instead of damning you for transferring rental agreement on them.
If you read till this point you probably care and want to put an end to such unfair business practices in Canada instead of remaining silent and do whatever big corporations want you to do.
Here is what we can do to stop water heater outrageous rent cancellation fees, or at least minimize water heater cost for us – consumers:
1) Contact your water heater rental provider and inform that you want to terminate rent and you don’t need their water heater anymore. Most likely they will say that you have to buy it out for over $1000, depending on the model and year installed (if it was installed after Sep 15, 2010). If it was installed before Sep 15, 2010, then you don’t have a problem and they should just remove it from your curb for free or for $75 if their depots are very far from your home. The price they quote to you is basically rent termination fee, since you don’t need their water heater. Call it this way and refer to the Competition Act and Competition Bureau’s resolutions which are provided earlier in this article. Talk to their manager/supervisor who can really make decisions. Sometimes it may be more effective to do it in writing via letter/fax/e-mail/contact form. If it’s over the phone make sure you capture all information about the person who you speak to before starting to discuss anything. If the person you talk to realize that the company indeed violates Competition Law (this is exactly what you need to convince them) and their representative can make decisions, they can offer you significantly reduced buyout price. It’s up to you if to accept it or not. $75 would be fair termination fee – it was the case in the past. Considering your own circumstances you may decide.
2) If you have not reached agreement with your water heater rental provider, or instead of contacting them, file a complaint to the Competition Bureau here (may take about a month or two to investigate):
http://www.competitionbureau.g
Explain that you want to install your own water heater, but your water heater rental provider asks you to pay buyout price which is basically a rent termination fee of over a thousand dollars. The main point is that you don’t need their water heater, you want to install your own, but the penalty to terminate rent is $X,XXX which is really anti-competitive and water heater company forces you to stay with them or pay ridiculous cancellation fee.
Only in case of action (complaints to the Competition Bureau and the companies) by multiple victims of their unfair and perhaps unlawful (anti-competitive) practices we can put an end to it.
I had the similar issue with Enercare, and I totally think that is an unfair business somewhat deceptive. It looks so many people have such issues with such company and for over ten years. I wonder why not the people in Ontario who has suffered such bad deal organize to find an attorney to fight for this matter ?
Hi Can anyone tell me if this is even legal:
when I purchased my house from builder, they put me into a 50 year lease with Enercare and I dont even know about that.
Can I complain somewhere or if it was a violation of any laws?
Found your article as I was looking for information to assist in a flight with Reliance for termination fees for a water heater that was installed in 2009 and at the end of or close to its life span (serviced 3 times in the past 3 months and still not working properly). We bought a new water heater and in trying to return the old worn out tank, Reliance is attempting to charge termination fees. Reliance took over my contract from another door-to-door company and is now relying on the terms of that old contract with an “indefinite term”. I used a lot of the information I found here to start the fight and also filed a Complaint with the Competition Bureau… I really hope that more is done to put these big business at their knees with regard to outrageous termination fees. They get their pound of flesh in high rental fees. Honestly, they need to just walk away and stop trying to intimidate people using threats of their “legal team” getting involved. Bring it on!
I cancelled my contract/bought out my 20yr+ tank in July of 2014. I’ve come to discover it on my bill and have no idea if they ever took it off. I looked back at least 5 yrs and have been charged monthly after confirmation of buyout. I called to inquire, confirmed details, confirmed call was recorded. I was told to give a week for follow up to be contacted. I called 2 weeks later and was given another ticket# and told 3-5d for followup. I called a week later, was transferred to customer care, waited on hold again for 20 min and was hung up on. I verified my phone number and email last call so that I could be contacted if there was a disconnection. Come on Enercare – why is it so hard to even start communication on this? Looking for contact info for
Nazeema Khan if anyone can help.
Hello,
We were in the same situation as everyone else. My mother is locked into a 10 year rental with Global Eco Energy group. I hope there is a class action against then for their misleading practices. I would be all in. I am looking to start a small claims action myself. They are doing very shady things and withholding documents. Even if I do not succeed, I want to save another elderly or disable person from ding through the same thing. It is a headache, it is painful and it is costly (both time and money). But we mustn’t stay SILENT. This is Exactly what they want. If everyone can PLEASE please write to your respective legislative body. Consumer protections, MPPs, even the Premier if possible. We have to SPEAK up. This is a matter of public policy and the collective good of everyone. Please ! If you don’t take this to court at least write a letter, write a review, do something ! If we cannot be saved, then we can pay it forward !
My mother passed away in June and she rented a hot water tank from Enercare. When I sold her house, I notified Enercare by phone. I was directed to an online submission form, which I used the same day and attached the copy of my mother’s will to prove I am the executor. They are continuing to withdraw the PAP from my mother’s account and even managed to bypass the stop payment I had put on. Each time I have called, they have very aggressively tried to pressure me to contact the new owner of the house and have him take over the lease. I will not. 1. They had 27 days to indicate they required action on the part of myself, my realtor and my lawyer and did not. 2. I am not an employee of Enercare and will not provide sales for them. 3. It is extremely inappropriate for me to contact the buyer of my mother’s home. This company is not BBB accredited and after reading complaints on that site, similar to mine, I know that I can expect debt collectors calling me for at least year once I prevent them from taking money from the account.
Same story here. Prior to taking the possession of our new home in September 2019, I phoned Enercare and told them that I would like to return the unit to them, they said I had to wait till the possession date and upon receipt of the 1st bill, then I can return the water heater rental unit. Then they intentionally delayed the first bill, I did not receive the bill until 45 days after the possession and therefore missed the 10-day cool off period. When I called to return the unit in October, they said it was too late that I am bound to the Agreement of Purchase and Sale. Then they offered me 6-m free in order to keep me. I insisted the buy out the plan, they issued me a bill of over $3900 for a two-year old water heater with heat pump (I bought the model home, it is two years old). If anybody is starting a class action suit against Enercare in Ottawa, I am in.
Mattamy new home deal included in the term that there will be a rental equipment. Doesn’t say which company or monthly rent. When i sign the possession of the house with a lawyer i kept signing oapers pushed in front of me and did not receive the rental agreement on my package. Phoned the lawyer’s office they emailed me a copy. It says Cricket Care will charge me $48.66 monthly rental fee for a tankless water heater. It has passed the 10 day period to make changes. Doesn’t say what the changes are.
Cricket Care is threatining me to send collection agency if i remove the unit. Buyout price is $3900 plus tax. The unit cost US1200-1500. I talked to them. They are protected by their agreement and making me feel stupid that I signed the renral agreement. I haven’t paid yet. I am going complaint everywhere including local mpp, bbb and customer protection if exists. Has anyone removed a rental unit for the company to pick and was still forced to pay or taking to court?
Thanks.
Hi Guys,
I need some advice. I purchased my current home in Nov 2011. Just last week, May 2020, I received my FIRST BILL from one of these rental companies!! Reviewing my Purchase Agreement under Rental Items it says: Hot Water Tank (if rental) and it does not have my wife’s or my initials. Living at this address for almost 9 years now I have not seen any tank rental fees on any of my bills. Not seeing any rental fees for the tank I made the assumption the tank is not rental since the Purchase Agreement said: “if rental”. It is my understanding, the contract between the previous homeowner and the company should have been automatically transferred to me and not for me to chase anyone down. I have actually paid out of my pocket to call service a couple of times and finally had enough of the tank and replaced it in 2016.
What are my options here? Why is it coming back to me now for a mistake they have made? Even now when I call the company to enquire about the bill, when giving them my address, they can’t pull out any information on the account unless I give them the account number they just created. Am I wrong to tell them to get lost??
Thanks
I would like to thank all of those for the information! This debate has been some sort of an eye-opener. My vendor signed a new contract with Enercare a few months before selling the house. I did not not about the anti-competitive schemes and I am trying to see if my lawyer and realtor can help but they are not happy that I even raise this issue even though I am their client and they do not work for free!
I bought a new townhouse from Arista, and the hot water tank is from Simply Green. The monthly rental fee is 50 after tax, and the buyout price is 5000 after tax. The similar HWT in Lowe’s is only 950+tax. What a scam!!!
Simply Green only sent me a template agreement, but when I demanded the signed contract between them and the builder, they won’t send me that. This is ridiculous!!! Because they can change the template at any time!!
I just learnt that they can put a lien on title without any notice!!!It is terrible.
I tried to send emails to them, but they just playing around and did not take it seriously! I will file complaint to Competition Bureau, but I just do not know should I pay the rent ?How should I deal with the lien thing? What should I do to prevent them from putting lien on the title? anybody has any idea?
Thanks,
Alfredo
In 2014 Green Planet Home Services Inc. scammed my elderly parents into a 15 year contract by pretending to be from Enbridge and going door to door. They lied about the term and that we can cancel the rental at any time.
5 years later in 2018 they wanted $2200 to buy out the tank (that is valued at less then that). In 2019 the buy out magically went UP to $3200. This is after we already paid around $2200 in rental fees.
After each call to the company “the manager is not here, they will call you back in 48 hours”, never a call back even after 5 calls. Only after we put a dispute with Enbridge did they call back.
The compliance officer at Green Planet Home Services Inc is Adrianna Tansek and she is a first rate scammer/liar.
I am going to small claims to deal with this as any other way is just a stalling tactic by them to get more money from you. Dont listed to a word they say, its 90% lies. Go file in small claims and get rid of them.
Enercare is now asking for unbilled rental charges amounting to $331 for Account Settlement Rentals from May 2015 to January 2020 because of a system error. The start date is the previous owner’s closing date from the builder. We purchased the property 15 months later in September 2016. The sales agreement only indicated that the HWT was a rental. Shortly after closing I called Enercare. They took the information could not find any account but took the information without any call back. I don’t believe I have any contract with Enercare and should not have to pay the delayed bill and have the right to remove the tank and buy my own.
I recently purchased a home with a 10 year old water heater and I’m being charged $40/month. I want to install a more energy efficient tankless water heater and avoid the monthly fees… I can’t because Enercare insists I owe them $800.00 for a ten year old tank that they have likely already made over $3000 on. Sign me up for the class action suit please…
Same issue with extremely high termination fee of over $5000. I had to sign this document according to my purchase and sale agreement when I bought my condo. I did not want to sign but they said I would not get my condo if i didn’t. Trying to argue tied selling practices. This is with HCSI Home Comfort and North Star builders of my condo.
I called Enercare and only termination option is to buyout at the price of 3442.00 + hst (Tank installed Oct. 2017).
My friend installed a new and similar tank at this housr for only 1260.00 including taxes.
What other options do I have to cancel the contract or bring the buyout price down. Please guide me.
Thank you very much in advance.
I have same problem. Why this company cannot be punished?
It seems very blatantly a scam, so why nobody does anything?
Is the government covering it up?
I have just gone through a trial (representing myself) with Enercare about my furnace and A.C., still waiting for outcome. But, as I can see, the rules of laws are all in favor of big corporations with an army of lawyers on their part. Sad.
Why government do not put more stringent rule on how a contract should be signed.
Foe example, a contract should not be written in the back of a form that you sign. A contract should be read by the representative, initialized at every statement and signed at the end. That sounds very logical but I guess there is nothing logical from the government point of view.
Hi Jason,
Seems like Competition Bureau representative completely misunderstood the problem. You need to contact them again and complaint until they resolve your issue by returning water heater without any charge. In this case law will be obeyed.
Thanks,
Trueler
Contacted the Competition Bureau and they stated they can do nothing and referred me to Consumer Affairs. They state Enercare has complied with their rules by making it easier to return a tank if you decide you no longer want to rent it. The fact that they charge unreasonable termination fees isn’t regarded as making you harder to return it, just harder on the pocket book.
14 years and now the tank is leaking ask enercae to take it away. I don’t want to resign, they want to charge me $75 or free drop off.
14 years never a service call, never skip the bill.
The tank is too old to repair.
My point in this situation is that they shouldn’t be charging me $75 for a pickup when they have a leaking tank!
I filed a complain with your help above to the Competition Bureau. I’m paying $37.28 per month and it’s 6 years old and they want $1206.84 for termination fee. Real Scam…!
I have the same concern. I am paying about $45/month for the water heater rental.
Do you guys have a collective action to take against this company?