One of the more common—and often frustrating—surprises for new homeowners is discovering that key appliances, like the water heater or HVAC system, are under rental contracts that weren’t clearly disclosed before closing. As your trusted real estate advisor, I want to help you avoid unexpected costs and make informed decisions when purchasing a home in Ontario.
What Are Rental Agreements for Home Appliances?
In many Canadian homes, appliances such as water heaters, furnaces, air conditioners, and water softeners are not owned outright, but rented through third-party providers. These rental agreements typically include:
- A fixed monthly rental fee
- Ongoing service, maintenance, and repairs
- Long-term contract terms (often 5–15 years)
- Buyout options to purchase the equipment outright
Builders of new homes often include these rentals in the agreement through partnerships with service providers.
Common Rental Providers in Ontario
Some of the most recognized companies offering appliance rentals include:
- Enercare
- Reliance Home Comfort
- Cricket Energy
- AWHR Canada
- Local utilities or independent HVAC companies
Each has unique terms, cancellation policies, and buyout fees—so reviewing contracts carefully is essential.
If You Inherit Rental Equipment, Are You Stuck With It?
Usually, yes. When you purchase a home, rental contracts disclosed in the Agreement of Purchase and Sale (APS) typically transfer to you, the buyer. However:
- If the seller properly disclosed the rental, you're obligated to assume the contract.
- If the rental was not disclosed, you may have grounds to dispute the agreement or negotiate a buyout at the seller’s expense.
📌 Tip: Unsure if it was disclosed? Speak to your real estate lawyer immediately.
Don’t Want to Keep the Rental?
You have options:
✅ Continue Renting:
- Offers peace of mind with included maintenance and repair
- Avoids upfront equipment costs (e.g., a new furnace can cost $5,000–$8,000)
✅ Buy Out the Contract:
- Costs vary based on equipment age:
- Newer units: High buyout (can exceed $1,000–$5,000)
- Older units: Lower cost or free transfer possible
- Check for auto-transfer clauses in older contracts
📌 Best Practice: Always get the exact buyout cost from the provider before deciding.
Can You Just Remove the Equipment?
No—removing or replacing rental equipment without the provider’s approval can lead to serious consequences:
- Full buyout charges
- Contract remains active
- Potential legal or collection actions
📌 Important: Contact the rental provider before removing, replacing, or disposing of any rented unit.
How to Cancel a Rental Contract
- Submit a formal cancellation request
- Some providers charge removal or pickup fees
- Others may require you to return the unit to a designated location
If you're facing high termination penalties, negotiate:
- Ask for a reduced buyout
- Request a contract review
- Consider filing a complaint with the Competition Bureau of Canada if you suspect misleading practices
How to Avoid Surprises When Buying a Home
As your realtor, I always recommend the following steps:
✔ Ask specifically about any rented appliances during showings
✔ Review the APS to confirm rental disclosures
✔ Request copies of any rental agreements
✔ Negotiate the buyout price as part of your offer if you prefer to own the equipment