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The Great Water Heater Rental Scam

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Jan 2, 2012
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KINGSTON

The Great Water Heater Rental Scam

Hi Everyone!

I love this site! I've bagged some amazing deals over the years as a result.

This post is meant to be sort of an "info post", in hopes that others will stumble upon it and realise they've been hoodwinked by the Great Water Heater Rental Scam.

I live in Ontario, Canada, and the water heater rental business is, to say the least, brisk here. According to Reliance Home Comfort, 1.2 million homeowners rent water heaters here. And that's only their part of the pie, Wow. What a cash cow. You know its got to be a huge money maker when organisations like The Ontario Teachers Pension Fund get involved.

I'm not sure how the rental business evolved here. Other parts of the country seem to be less affected by this blatant money grab. One theory is, local utilities, in an attempt at conservation, (natural gas vs. electric), offered rental units to homeowners as a way to conserve, and offset the cost of a new install by offering a rental program. Many of them had a pay-to-own option. Another theory is that new home builders could drop their price slightly by including a rental w/h unit in their homes.
Then, at some point, a bean counter realised this was a huge profit centre. Thus the scam began.

Let's do the numbers. Even a poorly maintained W/H will last 8-12 years. For example, a new power vent water heater costs about $900. The current rental rate from Reliance, one of the many companies offering rentals, is $25 per month, as of January 2012. Do the math. Where else, in this economy, can you double your investment in six years.

Some background on my situation: We moved into our house 4 1/2 years ago, and, at the time, had a number of large expenses, and typically, didn't want to shell out for a water heater.
After reading about some companies allowing customers a buy out option, I contacted Reliance and was told that the buy out would be $800. I almost choked. "$800 for a six year old tank?" "Well", the man said, "It's a heavy duty tank, you know. We can't just rent out ordinary tanks. These are special." I asked if he thought I fell off a turnip truck the previous night, and told him I'd get back to him on the details in regards to the removal process.
Weeks turned into months, and I ignored that bloody rental water heater, that money vacuum in my basement, as much as I could. A home mortgage is one thing, but getting it in the ear for a friggin' home appliance was another. I'm not renting my stove, my dish washer, nor my fridge...Grrr...

Finally, it was Reliance's rate increase, starting January 2012, that broke the camel's back.


GO BUY A NEW WATER HEATER, THEN LOOK AFTER IT. Don't get shafted by these rental companies, and definitely DO NOT sign a long term rental contract.

I have talked to many people this past while, who have rental units. There seem to be many misconceptions about water heaters. For example:

i) They are VERY expensive to buy.
Uh.,.what? Most cost less than that plasma TV you recently purchased. And probably will last longer too, if you maintain it. Now, a new hot water heater isn't nearly as sexy as a new 55" TV, but I guarantee, after five days of abstinence from both, and a choice was offered between the two, priorities would become crystal clear.... I digress.
ii) They are expensive to service, and the Rental Company pays for the service.
Again,..Uh, duh, what ? No, YOU are paying for the service. You just don't want to acknowledge it. Think about it. Even if you hired a plumber annually for $80 to inspect the water heater you own, you'd still be coming out ahead.
iii) The Rental Company will insure against damages caused by their tank leaking.
Are you kidding?? They cover nothing aside from keeping the tank limping along. You had better make sure your insurance policy is updated and includes water damage.

As a final note, my 'Reliance Notice Of Rate Increase' states some lovely double-speak gems such as:

"Free replacement should it be un-repairable as a result of normal use"
Really? You mean it if it pisses water all over my possessions and causes thousands of dollars in damages because you don't maintain your water heaters in any way, shape, or form, you are still willing to give me a new water heater? How charitable.

"Guaranteed service - our large network of qualified, licensed technicians provided gauranteed support."
Now that's a doubly-duty gaurantee, if I ever read one. Whatever it means.

"All repair, parts, and labour, as a result of normal use, are included through the life of the equipment".
Once more, uh, duh... It's a rental, NOT a lease. It's their equipment. If you rent a house, do you need to pay to have it re-shingled?

As a final insult, the Reliance letter states that "1.2 million homeowners...trust us...and why we've saved our customers over $80 million on water heater repairs last year alone."

Holy Crap! $80 million dollars! It costs $80 million dollars to repair a water heater??
I want to save $80 million dollars! I want to rent one now! I'm going to save enough for me, my wife, and my child's retirement just by renting from your company!

Not.

I just called Reliance Home Comfort, the company which has been renting me the water heater. It turns out that they have a $40 contract cancellation fee, and want me pay and additional $65 to pick up their tank unless I drop it off at their depot. I got a bit angry, and told the CSR that they could pick it up, or i'd call a scrap guy to take it away. She said I'd be charged $730, the "buy out price" for the tank if I did that. I told her, "It's a 2004 model, how in the hell is it worth that much? I can go buy a new one for $900", to which she replied the same old "These are Special Heavy Duty models, build just for Reliance"
Ya right.
So now I need to somehow get that friggin' tank back to them in my Ford Focus. I told the CSR that Reliance Home Comfort just bought $105 of serious bad publicity.

This is just another reason to NEVER rent a water heater. You will pay to the bitter end, and then pay some more.
1531 replies
Deal Addict
Nov 20, 2003
1213 posts
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Aurora, ON
my main concern is with regards to one single item: what does your home insurance, municipality by-law enforcement office, and gas distribution company think about you replacing the major natural gas appliance all by yourself?

I'd have have done the replacement long time ago if I was sure that this won't bite me in the ass in case there's a real problem. What if for some unfortunate reason the water heater causes fire sometime in the future? I'm afraid that the insurance company will have a very good case in denying your claim. I'm confident in my abilities to perform all the work properly, but I simply can't afford to lose fire insurance just because I didn't get a certified gas technician to do the damn simple work for me. The quotes that I heard for the installation work run about $500.

My water heater is close to the furnace. If the furnace catches fire and burns the whole place down, the insurance company can still play the card of unlicensed gas water heater installation and deny the whole claim. This is just too scary of a thought.

The lowest quote that I got for bringing in my own power vented conventional water heater was $1,500. That's five years worth of worry-free rental. So far my water heater required one repair. In a couple of years it will be a decade old, so I'm waiting for a sale to get a new unit (15% off Rona sale, something similar at HD, etc.). I do want to replace it because it's efficiency got to be much lower now than when it was new.

so what about unlicensed person doing work on natural gas lines?
[OP]
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Jan 2, 2012
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LarryLat wrote:
Jan 3rd, 2012 3:54 pm
so what about unlicensed person doing work on natural gas lines?
Natural gas is pretty smelly. You would have to have no sense of smell at all if you had a leak and didn't notice. NG, unlike propane, is also lighter than air, so it doesn't pool like propane or many solvent vapors.
I'm not condoning anyone doing any work if you are unskilled and/or unqualified.

I'm also not suggesting everyone start installing their own gas water heaters. Most people can't change a light switch. I simply wanted to point out that every homeowner now renting is paying for that tank over and over again.
LarryLat wrote:
Jan 3rd, 2012 3:54 pm
The lowest quote that I got for bringing in my own power vented conventional water heater was $1,500. That's five years worth of worry-free rental. So far my water heater required one repair. In a couple of years it will be a decade old.
See? You've already paid for that water heater, almost twice now.

If you really want your new tank to last, change the anode rod every two years (or yearly if you have a water softener). It is a made from a sacrificial metal, (usually magnesium, but sometimes zinc/aluminum) that corrodes instead of the inside of your tank.

As far as newer units efficiency goes, power vented units haven't changed in efficiency in 10 years; they are still around 65%. If you go to a tankless system, the real savings comes from not storing and reheating a tankful of water 24 hours a day.
Sr. Member
Feb 16, 2009
808 posts
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705
I don't have natural gas. If I did, I'd probably use an electric water heater. A blanket on an electric HWH can make for a pretty efficient unit.
I don't want to be at the mercy of the TSSA.
jason9945 wrote:
Jan 3rd, 2012 3:46 pm
We have happily rented a water heater for years. Our hard water kills them in no time and they are happy to replace them when they fail. If we had to pay for all those water heaters we would be broke :D

Isn't that water doing a lot of harm to faucets, toilets etc in your home? I'd look into a softener. You'll save a lot in soap and laundry detergent with a softener.
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Jun 20, 2010
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MrFrugal1 wrote:
Jan 3rd, 2012 3:19 pm
Hi Everyone!

I love this site! I've bagged some amazing deals over the years as a result.

This post is meant to be sort of an "info post", in hopes that others will stumble upon it and realise they've been hoodwinked by the Great Water Heater Rental Scam.

I live in Ontario, Canada, and the water heater rental business is, to say the least, brisk here. According to Reliance Home Comfort, 1.2 million homeowners rent water heaters here. And that's only their part of the pie, Wow. What a cash cow. You know its got to be a huge money maker when organisations like The Ontario Teachers Pension Fund get involved.

I'm not sure how the rental business evolved here. Other parts of the country seem to be less affected by this blatant money grab. One theory is, local utilities, in an attempt at conservation, (natural gas vs. electric), offered rental units to homeowners as a way to conserve, and offset the cost of a new install by offering a rental program. Many of them had a pay-to-own option. Another theory is that new home builders could drop their price slightly by including a rental w/h unit in their homes.
Then, at some point, a bean counter realised this was a huge profit centre. Thus the scam began.

Let's do the numbers. Even a poorly maintained W/H will last 8-12 years. For example, a new power vent water heater costs about $900. The current rental rate from Reliance, one of the many companies offering rentals, is $25 per month, as of January 2012. Do the math. Where else, in this economy, can you double your investment in six years.

Some background on my situation: We moved into our house 4 1/2 years ago, and, at the time, had a number of large expenses, and typically, didn't want to shell out for a water heater.
After reading about some companies allowing customers a buy out option, I contacted Reliance and was told that the buy out would be $800. I almost choked. "$800 for a six year old tank?" "Well", the man said, "It's a heavy duty tank, you know. We can't just rent out ordinary tanks. These are special." I asked if he thought I fell off a turnip truck the previous night, and told him I'd get back to him on the details in regards to the removal process.
Weeks turned into months, and I ignored that bloody rental water heater, that money vacuum in my basement, as much as I could. A home mortgage is one thing, but getting it in the ear for a friggin' home appliance was another. I'm not renting my stove, my dish washer, nor my fridge...Grrr...

Finally, it was Reliance's rate increase, starting January 2012, that broke the camel's back.


GO BUY A NEW WATER HEATER, THEN LOOK AFTER IT. Don't get shafted by these rental companies, and definitely DO NOT sign a long term rental contract.

I have talked to many people this past while, who have rental units. There seem to be many misconceptions about water heaters. For example:

i) They are VERY expensive to buy.
Uh.,.what? Most cost less than that plasma TV you recently purchased. And probably will last longer too, if you maintain it. Now, a new hot water heater isn't nearly as sexy as a new 55" TV, but I guarantee, after five days of abstinence from both, and a choice was offered between the two, priorities would become crystal clear.... I digress.
ii) They are expensive to service, and the Rental Company pays for the service.
Again,..Uh, duh, what ? No, YOU are paying for the service. You just don't want to acknowledge it. Think about it. Even if you hired a plumber annually for $80 to inspect the water heater you own, you'd still be coming out ahead.
iii) The Rental Company will insure against damages caused by their tank leaking.
Are you kidding?? They cover nothing aside from keeping the tank limping along. You had better make sure your insurance policy is updated and includes water damage.

As a final note, my 'Reliance Notice Of Rate Increase' states some lovely double-speak gems such as:

"Free replacement should it be un-repairable as a result of normal use"
Really? You mean it if it pisses water all over my possessions and causes thousands of dollars in damages because you don't maintain your water heaters in any way, shape, or form, you are still willing to give me a new water heater? How charitable.

"Guaranteed service - our large network of qualified, licensed technicians provided gauranteed support."
Now that's a doubly-duty gaurantee, if I ever read one. Whatever it means.

"All repair, parts, and labour, as a result of normal use, are included through the life of the equipment".
Once more, uh, duh... It's a rental, NOT a lease. It's their equipment. If you rent a house, do you need to pay to have it re-shingled?

As a final insult, the Reliance letter states that "1.2 million homeowners...trust us...and why we've saved our customers over $80 million on water heater repairs last year alone."

Holy Crap! $80 million dollars! It costs $80 million dollars to repair a water heater??
I want to save $80 million dollars! I want to rent one now! I'm going to save enough for me, my wife, and my child's retirement just by renting from your company!

Not.

I just called Reliance Home Comfort, the company which has been renting me the water heater. It turns out that they have a $40 contract cancellation fee, and want me pay and additional $65 to pick up their tank unless I drop it off at their depot. I got a bit angry, and told the CSR that they could pick it up, or i'd call a scrap guy to take it away. She said I'd be charged $730, the "buy out price" for the tank if I did that. I told her, "It's a 2004 model, how in the hell is it worth that much? I can go buy a new one for $900", to which she replied the same old "These are Special Heavy Duty models, build just for Reliance"*
Ya right.*
So now I need to somehow get that friggin' tank back to them in my Ford Focus. I told the CSR that Reliance Home Comfort just bought $105 of serious bad publicity.*

This is just another reason to NEVER rent a water heater. You will pay to the bitter end, and then pay some more.

called them a few months ago because i wanted to either buy the one we have in the house from them (i'm renting from reliance as well) or go to home depot or wherever and buy a new one

i was quoted over 1k for the 2 year old heater, or paying bunch of fees of them removing it from our house, and whatever else they can probably come up with to milk us some more

after talking to my husband we just somehow dropped it...........but i still like the idea of owning over renting, and i'll probably be figuring out something which will probably go along the lines of buying and installing a new one......if i go by their logic then i might as well rent all my appliance.....
Deal Addict
Nov 20, 2003
1213 posts
171 upvotes
Aurora, ON
MrFrugal1 wrote:
Jan 3rd, 2012 4:34 pm
Natural gas is pretty smelly. You would have to have no sense of smell at all if you had a leak and didn't notice.

I'm confident in my abilities. By law as a homeowner I'm allowed to do all the electrical work in my home, and it won't affect my insurance coverage if everything is done at least up to code. However, I don't think this is the same when it comes to gas lines. I just don't want to give an insurance company a way to easily get out of a claim if there's one. This is not a coverage on a $200 microwave, this is a real asset that needs to be protected by an insurance as its replacement cost is beyond my means.

The question remains open: can an unlicensed homeowner perform operations on gas lines within his/her home without getting into troubles with an insurance/utility/by-law people?
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Jan 2, 2012
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jelena-c wrote:
Jan 3rd, 2012 4:48 pm
after talking to my husband we just somehow dropped it....
That's EXACTLY what the removal fees are all about. A nice disincentive cash grab. Reliance wants you to drop it, so they can continue taking $300+ per year from you.... Forever and ever and ever.

Even if you put the new water heater on an 18% credit card, and paid the monthly $28 towards that bill, you will still be coming out ahead in the long run.

Just make the call.
1-888-837-1451 Press '0' so you don't have to listen to any double speak.

Then look up home heating in the Yellow Pages (or Canada411 online) and get some quotes. When you find an installer, get him to loosen up the anode nut and back it out to show you what it looks like new. Change it every two years, and your tank will last forever and ever and ever. Then you can laugh at everyone who throws money away renting year after year after year....
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Jan 19, 2011
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LarryLat wrote:
Jan 3rd, 2012 5:25 pm
I'm confident in my abilities. By law as a homeowner I'm allowed to do all the electrical work in my home, and it won't affect my insurance coverage if everything is done at least up to code. However, I don't think this is the same when it comes to gas lines. I just don't want to give an insurance company a way to easily get out of a claim if there's one. This is not a coverage on a $200 microwave, this is a real asset that needs to be protected by an insurance as its replacement cost is beyond my means.

The question remains open: can an unlicensed homeowner perform operations on gas lines within his/her home without getting into troubles with an insurance/utility/by-law people?

By law you can do your own electrical work, if you apply for an inspection certificate, and have your work inspected by the ESA... Not only does it have to meet code, it also has to be inspected by the ESA.

Short answer though, gas fitting must be done by a licensed gas fitter, to the best of my knowledge, homeowner cannot do his/her own gas fitting whatsoever.
"The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is."
Just a guy who dabbles in lots of stuff learning along the way. I do have opinions, and readily share them!
[OP]
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LarryLat wrote:
Jan 3rd, 2012 5:25 pm
The question remains open: can an unlicensed homeowner perform operations on gas lines within his/her home without getting into troubles with an insurance/utility/by-law people?
Frankly, I don't know.

But I tell you what. Find yourself a plumber or gas fitter with a bad back ;)
Seriously, you may find a freelancer with a license who is willing to do the final connections for you. You disconnect and drain the existing tank, and haul it to your garage or wherever. You wheel in the new tank to the proper location, and have all the necessary parts ready. Your hired man comes in, connects the NG line and the water lines, and starts it up. You pay him $150, or whatever, and off he goes.
Easy peasy.
The biggest part of the labour cost is the farting around.... Picking up the new tank, moving the tanks in and out, and standing around while the old one drains.
Newbie
Jun 19, 2010
42 posts
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I just got a new place and I'm paying $45/month for a tankless water tank from Reliance. What a rip off!!
I'm also thinking of buying the tankless from them but I think they are going to over charge me as suppose to homedepot, rona, etc.
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MrFrugal1 wrote:
Jan 3rd, 2012 5:47 pm
That's EXACTLY what the removal fees are all about.

there's no question about it

i was looking at getting a tankless........but i should first find a plumber to tell me whether it's doable, and what the installation will cost before buying one
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hiyatran wrote:
Jan 3rd, 2012 6:24 pm
I just got a new place and I'm paying $45/month for a tankless water tank from Reliance. What a rip off!!
I'm also thinking of buying the tankless from them but I think they are going to over charge me as suppose to homedepot, rona, etc.

i'm curious to see how much they would charge for their tankless
the one i was looking at home depot was $999
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Jan 1, 2002
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MrFrugal1 wrote:
Jan 3rd, 2012 5:47 pm
That's EXACTLY what the removal fees are all about. A nice disincentive cash grab. Reliance wants you to drop it, so they can continue taking $300+ per year from you.... Forever and ever and ever.

Even if you put the new water heater on an 18% credit card, and paid the monthly $28 towards that bill, you will still be coming out ahead in the long run.

Just make the call.
1-888-837-1451 Press '0' so you don't have to listen to any double speak.

Then look up home heating in the Yellow Pages (or Canada411 online) and get some quotes. When you find an installer, get him to loosen up the anode nut and back it out to show you what it looks like new. Change it every two years, and your tank will last forever and ever and ever. Then you can laugh at everyone who throws money away renting year after year after year....
It's so different in Quebec, in my last home we were renting a Gas heated large water tank with out Provincial Gas company Gaz Metro, and it was aprox $12, and if there were issues they would come promptly. Do I still have to verify this Anode nut every two years? I never even think about my water heater, it just works.

That being said I'm in a new house, I own my own electric heated tank this time, our water here is not hard, do
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Rockstead wrote:
Jan 3rd, 2012 7:06 pm
Do I still have to verify this Anode nut every two years? I never even think about my water heater, it just works.

That being said I'm in a new house, I own my own electric heated tank this time, our water here is not hard, do
You, and most other people, never think about you water heater until it fails. Then that cold shower snaps you to attention. :-0

Yes, you should check it.

Google 'water heater anode'. Plenty of info out there.

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