Home & Garden

New build in ontario. Can you get out of hot water rental contract before it even starts?

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[OP]
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Jul 15, 2003
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Ontario, Canada

New build in ontario. Can you get out of hot water rental contract before it even starts?

So i know someone buying in a new development in stratford. They did this yesterday.
http://mycoventry.ca/stratford

They said they've chosen the site, model, optional upgrades and signed based on conditions of financing. Next stop is the bank. I don't have any more info than this.

What i do want to recommend to them is to not have a rental water heater. Before i start throwing information at them i was wondering how this usually goes down with neighborhood developers. I'm assuming the developer partners with whatever the local provider is to have a rental tank installed by default. It either isn't mentioned or it's a footnote that they hope you don't bother to look at. That's how it was with me 15 years ago.... grrr.

My hope would be that they can sign something to opt out of the rental hot water tank at no cost to them. They then have to separately arrange to buy and have their own hot water tank installed. But then i wonder if the developer won't allow other random work crews onto the site so how does one schedule this. Makes me think the developer will refuse to allow anything other than their approved crew to do it and their approved crew only does rental heaters from their partner. Hence why i'm asking the question.

- Can you ever negotiate out of this when you're buying a package house from a developer or are you pretty much stuck?

- Can you get out of it without paying a massive fee? in these forums i once heard one guy said he "got out" of it by paying $6000 to the developer to buy it outright.
That's essentially just paying the contract cancellation fee up front. I'm hoping you can just avoid the contract and get your own installed.

- If you can, do you have to do this while signing the initial paperwork or is this something they can do in the coming months. They're all stunned and stressed about the fact that they're actually buying a house and i don't want to flood them with worries right now on day one unless i have to. If this can be figured out later i'll let them do their financing and whatnot right now and give them this info once that's settled. But if it's important to do it before they sign anything else then that's what i want to know.

Any help appreciated.
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Feb 11, 2007
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I've heard it's not negotiable with builders because they are paid by the rental companies to install them.
Doesn't hurt to try though. Maybe they can pay the builder $1k under the table to avoid the rental? Exchange one bribe for another.
If the women don't find you handsome, they should at least find you handy.
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May 28, 2009
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Belleville
I had it written out of the initial contract and they didn't seem to care that much. Once we started meeting regularly with the builder they said it was unusal and tried to convince use to rent. I was firm we were not going to. Installation cost us around $600-700. Belleville for the location.
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Oct 20, 2011
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Mississauga
My son purchased a home in Caledon and tried to get out of the hot water tank rental contract and they said it was not negotiable. I think it depends on the demand for the homes in the area but in Caledon they were selling quick so the builder had the bargaining power as it didn't matter how hard they pushed to get out of the rental contract, the builder said NO!
Last edited by MyDream1 on Mar 2nd, 2017 12:13 pm, edited 1 time in total.
[OP]
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Jul 15, 2003
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Ontario, Canada
Bah. So sounds like it will be totally up to the whim of the builder. I'll tell them to ask/plead/bribe but sounds like there's no guarantee. :-(
I wonder how much it will actually be to cancel/buyout on day 1. I doubt any rental company will tell you this until you are already a customer and it's too late.

[edit] So i just called Reliance Home Comfort who services waterloo ontario with rental heaters. They said that if i was to start a contract with them right now and wanted to cancel within a year they would only charge me a $200 cancellation fee and a $50 removal fee. After one year it's $40 cancellation fee and $50 removal. After 10 years no cancellation fee. There never any locked in contract so no fees other than what i just stated. That's entirely reasonable. I'm actually suprised.

So who rents water heaters in stratford? Anyone know? I'll see if i can find out and call them. Maybe they also have no locked in contracts and my parents can just cancel on day one, pay a $200-$500 cancellation fee, and then buy and have a new one installed by a local guy. That would be perfectly reasonable.
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Oct 26, 2003
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Kevinck wrote: So i know someone buying in a new development in stratford. They did this yesterday.
http://mycoventry.ca/stratford

They said they've chosen the site, model, optional upgrades and signed based on conditions of financing. Next stop is the bank. I don't have any more info than this.

What i do want to recommend to them is to not have a rental water heater. Before i start throwing information at them i was wondering how this usually goes down with neighborhood developers. I'm assuming the developer partners with whatever the local provider is to have a rental tank installed by default. It either isn't mentioned or it's a footnote that they hope you don't bother to look at. That's how it was with me 15 years ago.... grrr.

My hope would be that they can sign something to opt out of the rental hot water tank at no cost to them. They then have to separately arrange to buy and have their own hot water tank installed. But then i wonder if the developer won't allow other random work crews onto the site so how does one schedule this. Makes me think the developer will refuse to allow anything other than their approved crew to do it and their approved crew only does rental heaters from their partner. Hence why i'm asking the question.

- Can you ever negotiate out of this when you're buying a package house from a developer or are you pretty much stuck?

- Can you get out of it without paying a massive fee? in these forums i once heard one guy said he "got out" of it by paying $6000 to the developer to buy it outright.
That's essentially just paying the contract cancellation fee up front. I'm hoping you can just avoid the contract and get your own installed.

- If you can, do you have to do this while signing the initial paperwork or is this something they can do in the coming months. They're all stunned and stressed about the fact that they're actually buying a house and i don't want to flood them with worries right now on day one unless i have to. If this can be figured out later i'll let them do their financing and whatnot right now and give them this info once that's settled. But if it's important to do it before they sign anything else then that's what i want to know.

Any help appreciated.
hot water heater should only cost about $1k for a basic one, only in gta you get builders construct $1M+ houses but cheap out on 1k
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Deal Guru
May 1, 2012
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Markham
The only way to get out is at the time of signing to purchase. The purchase agreement has to state that the builder isn't going to install a tank. At which point, either your builder supplies one or you install one. Houses cannot close without a hot water tank, so you gotta iron this out with the builder.
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Sep 11, 2006
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Anikiri wrote: The only way to get out is at the time of signing to purchase. The purchase agreement has to state that the builder isn't going to install a tank. At which point, either your builder supplies one or you install one. Houses cannot close without a hot water tank, so you gotta iron this out with the builder.
Can a house close without a furnace? We should not be forced to rent anything.
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May 1, 2012
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DIrty-D wrote: Can a house close without a furnace? We should not be forced to rent anything.
Cannot close without a furnace either.. at least not on new builds.
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DIrty-D wrote: Can a house close without a furnace? We should not be forced to rent anything.
You're not forced, you don't have a to buy a house from them.
If the women don't find you handsome, they should at least find you handy.
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Nov 18, 2005
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Kitchener
DIrty-D wrote: Can a house close without a furnace? We should not be forced to rent anything.
Nope, city won't issue the occupancy permit
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Oct 16, 2007
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Can they legally put a lien to the house if u don't pay the tank?
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boumbo wrote: Can they legally put a lien to the house if u don't pay the tank?
If you signed a contract saying you would accept the rental of the tank.
If the women don't find you handsome, they should at least find you handy.
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Nov 30, 2003
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Nunavut
engineered wrote: You're not forced, you don't have a to buy a house from them.
Then you go to the next builder who also requires it.. then the next.. and so on..

So basically you are saying don't buy a house?

These types of deals should never be allowed, no different then Rogers or Bell having exclusive contracts where only one or the other can install for a building/neighborhood.. customer for a purchase of this size should always have the choice
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Eldorado wrote: Then you go to the next builder who also requires it.. then the next.. and so on..
So basically you are saying don't buy a house?
These types of deals should never be allowed, no different then Rogers or Bell having exclusive contracts where only one or the other can install for a building/neighborhood.. customer for a purchase of this size should always have the choice
I'm not saying you can't buy a house, but if enough people avoided builders who did this they would drop the practise.
I agree that you shouldn't be forced into a rental, but technically you do have choice. You could find a builder that lets you out of the rental, or buy an existing house without a rental contract.

In reality, with these rental scum bribing the builders to force you into the contract they're creating a monopoly which shouldn't be allowed. Best is to petition our politicians to write a law giving us choice. But they're probably bribed by the rental companies as well.
Need to get one of those Marketplace shows to expose these rental scams.
There is no legitimate reason to force someone into a rental for a water heater, and there's no advantage to the owner to rent their tank. My worry is that they will start pushing furnace, fridge, stove, etc rentals on everyone as well.

BTW, Bell/Rogers/Cogeco/Telus do have exclusive contracts that are regional. It would be silly to have Bell and Telus competing as they'd both have to run their own lines to every house. Same goes for natural gas companies. When you use Teksavvy you're still paying Bell to use their lines/service.
This kind of monopoly makes sense because the infrastructure costs are so high.
If the women don't find you handsome, they should at least find you handy.
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Nov 30, 2003
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Nunavut
engineered wrote: I'm not saying you can't buy a house, but if enough people avoided builders who did this they would drop the practise.
I agree that you shouldn't be forced into a rental, but technically you do have choice. You could find a builder that lets you out of the rental, or buy an existing house without a rental contract.

In reality, with these rental scum bribing the builders to force you into the contract they're creating a monopoly which shouldn't be allowed. Best is to petition our politicians to write a law giving us choice. But they're probably bribed by the rental companies as well.
Need to get one of those Marketplace shows to expose these rental scams.
There is no legitimate reason to force someone into a rental for a water heater, and there's no advantage to the owner to rent their tank. My worry is that they will start pushing furnace, fridge, stove, etc rentals on everyone as well.

BTW, Bell/Rogers/Cogeco/Telus do have exclusive contracts that are regional. It would be silly to have Bell and Telus competing as they'd both have to run their own lines to every house. Same goes for natural gas companies. When you use Teksavvy you're still paying Bell to use their lines/service.
This kind of monopoly makes sense because the infrastructure costs are so high.
Problem is depending on your area, people line up night and day for new builds, and lack of choice between builders in new developments

But agreed, we need to petition our politicians to stop this crap.. add it to the long list

What I was saying about Bell/Rogers is that they run two different types of lines, if a builder has a Bell only deal then you are stuck with those associated types services - Fibe TV, DSL internet .. but what if you prefer cable for tv and internet? You are SOL.. this doesn't have anything to do with IISP's such as Teksavvy as they can service over either, but my choice of having cable internet is removed

In my magic ideal world there would be just one fiber cable run to the house and any company can use it to get our business .. but that will never happen
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engineered wrote: Doesn't hurt to try though. Maybe they can pay the builder $1k under the table to avoid the rental? Exchange one bribe for another.
These contracts are worth the weight of a water tank in gold...1k DEFINITELY won't cut it.

I never force these contracts on my clients. Some people want the peace of mind (for whatever reason) so I have my plumber install a tank for me for free and he can get the kickback.

These tract builders have not once purchased a hot water tank, you won't have them send someone out to quote it etc...it's work. Not sure the size of that builder, but if they're big they won't care. They're selling you a house, smaller builders sell you a home.
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Eldorado wrote: What I was saying about Bell/Rogers is that they run two different types of lines, if a builder has a Bell only deal then you are stuck with those associated types services - Fibe TV, DSL internet .. but what if you prefer cable for tv and internet? You are SOL.. this doesn't have anything to do with IISP's such as Teksavvy as they can service over either, but my choice of having cable internet is removed

In my magic ideal world there would be just one fiber cable run to the house and any company can use it to get our business .. but that will never happen
With new builds I'm pretty sure Rogers/Bell personnel actually come and lay the lines during construction (and sometimes after).
I wouldn't be too surprised if only 1 fibre connection is run in the future. Might be a while though.
Cas77 wrote: These contracts are worth the weight of a water tank in gold...1k DEFINITELY won't cut it.
I never force these contracts on my clients. Some people want the peace of mind (for whatever reason) so I have my plumber install a tank for me for free and he can get the kickback.
These tract builders have not once purchased a hot water tank, you won't have them send someone out to quote it etc...it's work. Not sure the size of that builder, but if they're big they won't care. They're selling you a house, smaller builders sell you a home.
I doesn't hurt to try, and maybe the guy can skip your house without the rental scammers finding out. Plus he pockets $1-2k from you.
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Kevinck wrote: Bah. So sounds like it will be totally up to the whim of the builder. I'll tell them to ask/plead/bribe but sounds like there's no guarantee. :-(
I wonder how much it will actually be to cancel/buyout on day 1. I doubt any rental company will tell you this until you are already a customer and it's too late.

[edit] So i just called Reliance Home Comfort who services waterloo ontario with rental heaters. They said that if i was to start a contract with them right now and wanted to cancel within a year they would only charge me a $200 cancellation fee and a $50 removal fee. After one year it's $40 cancellation fee and $50 removal. After 10 years no cancellation fee. There never any locked in contract so no fees other than what i just stated. That's entirely reasonable. I'm actually suprised.

So who rents water heaters in stratford? Anyone know? I'll see if i can find out and call them. Maybe they also have no locked in contracts and my parents can just cancel on day one, pay a $200-$500 cancellation fee, and then buy and have a new one installed by a local guy. That would be perfectly reasonable.
I'd be really surprised if it was that cheap to cancel the contract.

I'd look into the cost to immediately buy the hot water heater. It may be reasonable. The heater costs are amortized over 16 years so if you go to buy it out after 8 years the cost is still half of the original cost which seems unreasonable. But on day 1 you'd just pay the original cost of the unit + labour. This is also likely the path of least resistance because it doesn't require any special requests of the builder.
[OP]
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Jul 15, 2003
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So i emailed the builder asking if a potential buyer is required to enter into a rental contract for the water heater.

They came back and said "You may purchase a water heater with the Builder at colour selections time with Candace our designer." Same time as you might decide to get fancier counters or upgraded furnace/airconditioner etc.

So maybe the builder is open to this idea. No word on the actual cost. i'll warn my friend to keep this in mind and find out exactly how much this will cost them.

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