Real Estate

Buying a house with a Reliance AC/Furnace contract

  • Last Updated:
  • Sep 5th, 2020 12:30 pm
Sr. Member
Jun 7, 2017
944 posts
678 upvotes
BC
rob444 wrote: The existing rental contract does not magically become null and void with no penalties simply due to the home being sold. Any Seller needs to include in the purchase agreement that the Buyer agrees to assume the existing rental contract. This legally requires to Buyer to take on the contract, doesn't matter if they bothered to read the contract in the first place.

After home is sold what the rental company does will depend on the remaining term of contract and what cancellation penalty would be. If it's near end of life or contract is month to month, then it will be easy for the new buyer to get out the deal. However if there is a significant cancellation/buyout fee involved, the rental company will go after someone for it. If they Buyer agreed to assume the contract, the Buyer can legally be held liable for the fees. This could be from the rental company billing them directly, or getting sued by the seller if company goes after them instead. If there was no such clause to assume contract in the purchase agreement, then Seller would be on the hook.

End result is Buyers need to know what they're possibly getting into when they legally agree to assume the contract in the purchase agreement.
I'm sure there is a lot of info on this subject out there, but here goes:

Before selling, the contract is with the owner/seller of the house, not the house, and obviously not the buyer. The issue is whether the buyer agrees to assume the seller's contract after closing. I bet all the nuances apply here. Suppose the buyer refuses to assume the contract, the sale goes through, then Reliance comes after the new owner. What fun can ensue?
Jr. Member
User avatar
Sep 5, 2018
126 posts
183 upvotes
Furcorn wrote: I'm sure there is a lot of info on this subject out there, but here goes:

Before selling, the contract is with the owner/seller of the house, not the house, and obviously not the buyer. The issue is whether the buyer agrees to assume the seller's contract after closing. I bet all the nuances apply here. Suppose the buyer refuses to assume the contract, the sale goes through, then Reliance comes after the new owner. What fun can ensue?
Be clear about rental items in real estate contracts...

If an item is not specifically mentioned as a rental in the purchase and sale agreement, there is a way out. When we put offers on homes we made sure our realtor left out hot water rentals so that either the homeowner settles the account before closing or whoever the contract is with can deal with them thereafter. It sucks for the homeowners who have no idea how bad this scam is, which is honestly most homeowners. But that cost is really something to be avoided. I would assume most homeowners are largely in the green selling their homes so I wouldn’t feel bad if they need to eat 1-2k in cancellation fees.
Member
Mar 2, 2017
442 posts
559 upvotes
Markham
I had a pretty bad experience with reliance as well on a hot water tank I assumed. The part that really irks me is that home owners who can't afford to pay for a new a furnace/a/c/hot water tank sign up for these scams and then have their agent list the "new" appliance as if it's a bonus, when realistically you just saddled the home with additional monthly fees. To top it off a lot of times buyers have to assume these contracts during a hot market because no one will even entertain offer conditions like buyers paying out the contracts.
Realtor, Investor, CPA
Deal Addict
Jul 3, 2007
2745 posts
2878 upvotes
Toronto
has anyone here bought or known anyone whos bought their water heater outright at home depot, etc. instead of renting it ?

long term without repairs or replacement it does work out much cheaper .....

https://www.homedepot.ca/product/rheem- ... 1000792348

that one for example is about 2 years cost of renting one
Jr. Member
Dec 12, 2011
121 posts
94 upvotes
Toronto
We are in the same boat paying $30 a month to rent a water heater. Buyout is ridiculous. We bought house a year ago and seems like we are assed out too. Even tho fee is nominal, it drives my wife crazy every month to see the bill.
Member
Mar 2, 2017
442 posts
559 upvotes
Markham
You can get it done much cheaper, years ago I went and bought a bunch of 40 Gal hot water tanks directly from a Rheem Distriubtor in Buffalo, I think I paid under $400 CAD/tank after all fees/FX/Taxes. This was 8 years ago, even on Kijiij you can find a new unit for $200-$300 if you are patient. Payback is quick and swapping these out is pretty easy.

I will do anything to get rid of these b.s. subscription type lease/finance arrangements on any home appliance. It's a complete rip off.
Realtor, Investor, CPA
Sr. Member
Jun 7, 2017
944 posts
678 upvotes
BC
joepipe wrote: has anyone here bought or known anyone whos bought their water heater outright at home depot, etc. instead of renting it ?

long term without repairs or replacement it does work out much cheaper .....

https://www.homedepot.ca/product/rheem- ... 1000792348

that one for example is about 2 years cost of renting one
The water heater rental scam is essentially unheard of in my area of BC.

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