Home & Garden

The Great Water Heater Rental Scam

  • Last Updated:
  • Oct 8th, 2018 6:12 pm
[OP]
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Jan 2, 2012
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KINGSTON,ON
pootza wrote:
Nov 21st, 2017 5:38 pm
I'm just a little confused on what these scumbag lawyers job is. Don't they run a search to see if there's anything owing on the house? It's pretty obvious when it's in the purchase agreement so shouldn't they be able to obtain the rental contract for you to review and find out what's owing ... or is that above their competence?
I think that rental HWTs are so commonplace in Ontario that many lawyers just assume that the buyer is either aware of them, or has assumed that the real estate agent has informed the buyer about it. I'm not trying defend lawyers here, but from a legal standpoint, there are more pressing issues.
If you think about it, the agent makes 10 times what the closing lawyer would get. I'd like to think that a competent RE agent would point the presence of a rental tank, but since they are sales people, they wouldn't want to torpedo the deal in such a way.

Further to to your comment, real estate lawyers aren't necessarily scumbags. Firms like Diamond and Diamond ambulance chasing firms are scumbags.
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Dec 19, 2009
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MrFrugal1 wrote:
Nov 21st, 2017 9:34 pm
Further to to your comment, real estate lawyers aren't necessarily scumbags. Firms like Diamond and Diamond ambulance chasing firms are scumbags.
That's why Canada is such a great nation ... because we all get to have our own opinions.
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Jan 25, 2007
4853 posts
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Paris
pootza wrote:
Nov 21st, 2017 8:11 pm
Lawyers have a way of getting things ... and your trying to tell us you actually believed what Reliance told you .. lol. You must be the only one on RFD that believes anything that Reliance says.
Since they couldn't provide me with terms and conditions they took their water heater back. One would assume that they would have fought to force me to keep it?
Gbill2004: Thanks but I'll just smell the couch before/if I buy it.

jonnyb: I go in there like PICASSO and toss the glue everywhere, I don't care what house I'm on.
Member
Oct 23, 2017
428 posts
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GTA West
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.
Hmm. Last year when my Reliance water heater started to have erratic temperatures and appeared to be about 15 years old, I looked into my options. I decided to rent a new one from them (passive direct vent gas with 40 gals capacity). The rate is now $44.01 for 3 months, less than $15 per month. If it cost me $1200 before tax to have my own unit installed, the payback would be about 7 years! And that assumes trouble free operation. (Last winter I had to replace a $27 part on my furnace which ended up costing over $300 when it had to be done on a holiday weekend).

I don't even know if I'll be here another 7 years, so renting in this situation this was kind of a no-brainer for me.
[OP]
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Jan 2, 2012
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KINGSTON,ON
Dealmaker1945 wrote:
Nov 22nd, 2017 4:35 pm
Hmm. Last year when my Reliance water heater started to have erratic temperatures and appeared to be about 15 years old, I looked into my options. I decided to rent a new one from them (passive direct vent gas with 40 gals capacity). The rate is now $44.01 for 3 months, less than $15 per month. If it cost me $1200 before tax to have my own unit installed, the payback would be about 7 years! And that assumes trouble free operation. (Last winter I had to replace a $27 part on my furnace which ended up costing over $300 when it had to be done on a holiday weekend).

I don't even know if I'll be here another 7 years, so renting in this situation this was kind of a no-brainer for me.
Not sure what you mean by "passive direct vent". Your HWT will either be atmospheric venting, meaning through a chimney; or direct vent, meaning a powered exhaust fan.
If you've bothered to read through some of the 115 pages in this thread I'm sure you will find some dissenters, but the majority of people have weighed their options, done the math, and realised renting a HWT is a bad financial choice. There is a reason why there are 115 pages in this thread....

I'm not going to tell you HWT's are trouble free, but Reliance, et al, are in the HWT rental business because it's very profitable. Your (estimated) 15 year old HWT probably generated a three to four fold return for them, over it's lifespan.

The "I don't know whether I'll be in this place", argument has been brought up before, (in amongst the 115 pages of this thread, should you care to read through), and all I can say on that is, seven years goes by in a flash.

Also, while real estate values continue to be insanely high, at some point there will be a correction. If you end up on the wrong end in a buyers' market with an encumbrance such as a rented HWT, it could be one more strike against selling your property.

It's you money, do with it as you wish.
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Apr 20, 2011
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ON
MrFrugal1 wrote:
Nov 22nd, 2017 5:23 pm
Not sure what you mean by "passive direct vent". Your HWT will either be atmospheric venting, meaning through a chimney; or direct vent, meaning a powered exhaust fan.
There are two components to current water heaters.
1) vent style - chimney (up) or direct vent (side wall)
and
2) vent method - draft ("Passive" mentioned earlier) or power vent (electric fan motor induces the draft)

All chimney models are draft/passive, most direct models are likely power, but not necessarily all. They exist in both styles.
Draft/passive models use more gas, but don't require electricity. They also need to be right next to the wall if direct vent.

Power vent models are more efficient because they can shut completely off and can be further from the wall as the fan maintains the pressure required to expel exhaust. But they require electricity, are louder, and may require more service with more moving parts.
[OP]
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Jan 2, 2012
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aqnd wrote:
Nov 22nd, 2017 6:35 pm
There are two components to current water heaters.
1) vent style - chimney (up) or direct vent (side wall)
and
2) vent method - draft ("Passive" mentioned earlier) or power vent (electric fan motor induces the draft)

All chimney models are draft/passive, most direct models are likely power, but not necessarily all. They exist in both styles.
Draft/passive models use more gas, but don't require electricity. They also need to be right next to the wall if direct vent.

Power vent models are more efficient because they can shut completely off and can be further from the wall as the fan maintains the pressure required to expel exhaust. But they require electricity, are louder, and may require more service with more moving parts.
Thanks for the further clarification of what I already stated. I know the difference, but the poster was obviously confused by the type of tank venting he/ she has. That's why I asked.
Not that it matters. Renting a hot water tank, regardless of its venting method, is just stupid.
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Apr 20, 2011
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ON
No, it is not the same as you stated. There is a very real difference, not all direct vent are powered by an electric motor. There are direct vent models with no motor at all.

What you said would only confuse him more as direct vent does not mean power vent. It could, but it could also not.
It means exactly that - power used to vent. Power vent informs the vent direction (only available in direct vent), but the vent direction does not inform the method.
In a simpler logic scenario: pregnant, therefore woman. But you can't say woman, therefore pregnant.
Member
Oct 23, 2017
428 posts
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GTA West
The poster is not confused - my heater connects to a vertical chimney (B-Vent). I wanted to make clear for purposes of this discussion that my rental rate is not for a power vent model. The discussions in this thread seem to involve higher rental amounts and perhaps I am the only one with the $15 model. I know they do try to upsell to higher efficiency appliances. AT $25 I would not be renting.

BTW I have done 15 real estate transactions and have never seen a rental water heater become a significant impediment - $15 a month just aint gonna make a difference in the scheme of things IMHO. (Unlike say, a rental furnace, another area where people get in trouble).

But thanks for your wisdom OP. I can see that many folks have learned from this thread.
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Jan 25, 2007
4853 posts
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Paris
Dealmaker1945 wrote:
Nov 22nd, 2017 4:35 pm
. If it cost me $1200 before tax to have my own unit installed, the payback would be about 7 years!
The model you have costs about $400 at a store plus $200ish to put it in. Your calculation is double the most likely cost. So 3.5 years.
Gbill2004: Thanks but I'll just smell the couch before/if I buy it.

jonnyb: I go in there like PICASSO and toss the glue everywhere, I don't care what house I'm on.
Deal Addict
Dec 19, 2009
2874 posts
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Dealmaker1945 wrote:
Nov 22nd, 2017 11:08 pm
BTW I have done 15 real estate transactions and have never seen a rental water heater become a significant impediment - $15 a month just aint gonna make a difference in the scheme of things IMHO. (Unlike say, a rental furnace, another area where people get in trouble).
aqnd wrote:
Oct 15th, 2017 2:47 pm
The last 4 people I spoke to who bought homes this year all said they made sure there was no rental water tank. Most are starting to wake up to the water tank scam.
And I didn't say anything about it, they mentioned it to me. And 50/50 male/female at that.
So please, don't make generalizations that you can't possibly know are true for everyone.
I guess my generalizations came true.
I would put my faith in what Dealmaker 1945 is saying and don't believe a bit what aqnd spewed out.
Newbie
Nov 25, 2017
1 posts
1 upvote
We regret that we stayed with Reliance renting the water heater for almost 8 1/2 Yrs. We called for service the moment we noticed leak from the heater and was set up for the nxt evening. The technician from one of their contractors showed up last minute of appt window which is 11 pm just to say that there is nothing wrong with it, as for some reason, the heater stopped leaking, inspite of telling him what happened about leaking and it making noise, he did not nothing and just left. The next morning, the heater stopped wd working and spilled too much water. I called Reliance again, i’ve mentioned about what happened with the technician the night before. The customer service was so comforting enough and even managed to tell me that someone from the same contractor but differeny technician would call me in an hour or so and was told to call back if we do not get a call after 2 hrs and so I did. It turned out that the booking was made for the a day after. I got so upset and insisted that it’s emergency, we do not hot water and heat. The lady managed to send in their in-house technician after i asked and insisted that. But when the guy came (at the last minute of appt window again (10-2pm), he told us that the heater has to be replaced. But he told us that Reliance does not have the same water heater anymore and that if new type will be installed, we ahve to get a contractor to do the drilling and evrything doe them to install. What! We’re not supposed to shoulder that! And so I called Reliance again and told them what we were told. The lady told me that that should not be the way. So I was like, what is happening? Y Is Reliance not consistent. So the lady confirmed to me that she set us up for Nov 25th 8-1pm to have the unit replaced. So the day came. At around 12:30 i called areliance again to confirm if someone is really coming as it’s already running and i was told that someone is, but 1:30 came and no onw showed up. I called again and was told that there’s a note saying that appointment has to be re-booked as there is no replacement service on a weekend. Like what! Again! I still have to deal with it! So i insisted for a Supervisor and was told that there is nothing they can do but to re-book. I was like, what the hell! You guys keep on pulling our legs, you would say one thing but will do another thing! They do not care about the customer’s sufferings and so easy for them to say re-book! So we decided to not continue the rental anymore. I told the lady that Reliance should change their name! It’s not speaking for itself. They should be called Unreliable! So we cancelled their service. Enough with this hell with them! And their not done with ripping us off, we have to pay $40 for cancelling the service and if we choose to have the unit picked-up, another. $65.
So stay away from Reliance! They’re only reliable when taking your quarterly payment but so UNRELIABLE when it comes to service.
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Feb 14, 2006
8738 posts
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Vaughan
Thanks RFD for this informative thread.

We bought a new house and the previous owner had a new water tank installed in 2014 ... some PowerVent PV60 60gal .

Read this thread, did some math, and made the decision to purchase it outright from enercare. It was painful though - $1185 + HST. But renting it each month would've cost $34.19!

Cheers! Rental free. Encouraging my parents to do the same now.
[OP]
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Jan 2, 2012
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KINGSTON,ON
mcg wrote:
Dec 5th, 2017 12:36 pm
Thanks RFD for this informative thread.

We bought a new house and the previous owner had a new water tank installed in 2014 ... some PowerVent PV60 60gal .

Read this thread, did some math, and made the decision to purchase it outright from enercare. It was painful though - $1185 + HST. But renting it each month would've cost $34.19!

Cheers! Rental free. Encouraging my parents to do the same now.
Excellent! Thats for posting your experience.
I know it's tough to swallow that amount, especially when you have all the other expenses associated with a new home. That is one of the reasons, I'm sure, that keeps the rental tank industry running.
Member
Dec 12, 2007
322 posts
61 upvotes
Toronto
guys need some advice

I'm purchasing a home and in the agreement it indicates that i will be assuming the HWT for $34.18 a month.

I called to inquire about cancelling it and returning the tank

So I called to inquire about a buyout and here are my options -> My tank is since Jan 2013 and the previous owner is paying $34.18 a month including taxes (which I find a lot)


Before the 5 year mark -> buy out -> 1405.80 + HST

• $1072.50 + HST – Drain, disconnect and removal from the home.

• $1072.50 + HST Pickup from the first floor from home or garage/outside.

• $600 + HST Dropped off to our nearest drop off location.



After 5 years (Feb 2018) -> 1306.65 + HST

-$472.50 +HST Drain, disconnect and removal from home

- $472.50 +HST Pickup

- $0 to Drop off


Is there a way to forcefully not pay it at all ? I'm just concerned that I would get in trouble for this.

When speaking to Reliance, I had shown the customer representative my purchase agreement section only the part that contained "buyer assumes HWT contract", upon their request as they would not disclosure the previous contract for privacy reasons since they did not know who they were talking to -> made the mistake here perhaps ?

Or is my best option is to wait until Feb 2018, and disconnect it myself (or have someone install a new one and disconnect the old one for me) and then drop it off myself so I would be charged $0

any advice would be appreciated.

Thanks

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