One common issue that new homeowners encounter is discovering rental items on the property that weren’t properly disclosed at closing. The most common rental item in Canadian homes is a water heater, but other rented appliances can include HVAC systems (furnaces, air conditioners), water softeners, and even sump pumps. If you’ve found yourself in this situation, don’t worry—you have options.
What Are Rental Agreements for Home Appliances?
Many Canadian homeowners choose to rent certain home appliances and equipment rather than purchasing them outright. If you are buying a pre-construction property, odds are that your builder has an agreement with a rental vendor, and your new home may include these rental items as part of your purchase contract. Rental agreements typically involve:
- A monthly rental fee (usually ranging from $20 to $50 for a water heater)
- Regular maintenance and repairs included in the contract
- A contract term that may range from a few years to over a decade
- Buyout options if the homeowner decides to purchase the unit outright
Common Rental Providers in Canada
While Enercare is one of the biggest rental providers, other major companies offering rental water heaters and HVAC systems include:
- Reliance Home Comfort – Provides water heaters, furnaces, air conditioners, and water purification systems.
- AWHR Canada – Focuses on water heater rentals and protection plans.
- Cricket Energy – Offers water heaters, heat pumps, and air conditioning units.
- Local Utilities & Independent Providers – Some local hydro companies and plumbing/HVAC businesses offer rental services.
Each provider has different contract terms, buyout costs, and cancellation policies. Some companies require written notice and return of the unit, while others charge steep early termination fees.
If I bought a home with rental equipment, am I obliged to pay the rental fees?
In short, yes, most buyers assume rental items, however, if you weren’t informed about a rental agreement when purchasing your home, check your Agreement of Purchase and Sale (APS) first. In Canada, sellers are legally required to disclose any rental contracts tied to the property.
- If the rental item was properly disclosed, you might be obligated to take over the contract.
- If the seller failed to disclose the rental, you may have grounds to challenge the agreement and request that they cover the buyout or removal costs.
📌 Tip: If you’re unsure, consult with your real estate lawyer. They can help determine whether you have any legal recourse against the seller.
What if I don't want to rent anymore?
Depending on your service contact, you may have options to either continue renting the equipment, or buy out the contract. Before you make a decision, it is best to contact the rental company to understand:
- The contract duration, what the contract covers, and what the buy-out costs may be
- If the contact includes a service plan
While it may seem enticing to own your own equipment, some rental contacts do offer the benefits of saving the up-front costs of buying equipment (for example, a new furnace may range from $5,000-$8,000). In addition, they may also include warranty and service contracts as long as you are renting the equipment, which covers repairs and maintenance to the equipment.
If you don’t mind the monthly payments and the maintenance benefits, you can keep the rental agreement as it is. Just make sure the contract is properly transferred to your name to avoid billing issues.
Can I buy out the rental contract?
Most providers allow homeowners to buy out the appliance. However, the cost depends on the age of the unit:
- Newer units (1-5 years old): Buyout prices can be very high, sometimes exceeding $1,000 to $5,000.
- Older units (6+ years old): The buyout cost may be lower, or the company might offer a free transfer after a certain period.
📌 Tip: Some contracts have an automatic transfer clause, meaning the unit legally belongs to you after a set number of years.
How can I cancel the rental agreement
If you don’t want to keep the rental agreement, you may be able to return the unit and cancel the contract. However, each company has different return policies:
Returning a Rental Water Heater or HVAC Unit
- Most providers require a formal cancellation request before they accept a return.
- Some companies, like Reliance Home Comfort and Enercare, may charge a pickup fee to remove the unit from your home.
- In some cases, you may be required to return the unit yourself to a designated location.
What If I Just Remove or Scrap the Rental Unit?
It may be tempting to replace the unit on your own, but be careful—rental providers own the unit until it is officially bought out or returned. If you remove or dispose of it without permission, the company could:
- Charge you for the full buyout price
- Refuse to cancel the contract until the unit is returned
- Send a collection agency after you for the missing unit
📌 Best Practice: Always contact the rental provider before removing or replacing any rental appliance.
Negotiating with the Rental Provider
If you're facing high buyout fees or early termination penalties, consider negotiating with the company. Some strategies include:
- Asking for a settlement – Some companies may offer a reduced buyout price if you negotiate.
- Requesting a contract review – If the contract was not properly disclosed during the home purchase, you may be able to challenge it.
- Checking with the Competition Bureau of Canada – If you feel you’ve been misled, file a complaint about deceptive rental practices. (Competition Bureau)
How to Avoid Rental Equipment Surprises when Buying a Home
To prevent this situation for future homebuyers:
✔ Always ask about rental agreements before purchasing a home
✔ Check the APS for disclosure of rental items
✔ Review contracts carefully before signing
✔ Negotiate the buyout price before closing
If you’re ever in doubt, consult with your real estate lawyer to ensure you don’t get stuck with an unexpected rental contract.
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