Throw out the rental appliances
Ontario has an almost unique sort of scam: rental appliances. Aside from Saskatchewan, there is no other province where this sort of arrangement is common. After all, who in their right mind would want to rent an appliance for 3-5 times its actual price? It is the equivalent of paying a 30% interest rate, all for the pleasure of having yet another bill to deal with. Unlike in Saskatchewan it does not even include the yearly service. The appliances themselves are not too expensive to buy outright either; a traditional water heater can be between $500-$1000 and usually comes with a 5-10 year warranty, so you can have peace of mind if you are into that sort of thing. It is only some types of appliances: it is somehow considered reasonable to rent a water heater but not a fridge.
Most consumers in Ontario don’t make a well-informed choice to have this wretched deal. Instead, it is builders in a tight housing market looking to save a few thousands by saddling a buyer with these rental appliances. Some landlords also choose this arrangement, as any increases to appliance rental costs are not subject to Guideline Increases. When a home is resold buyers often enough mistakenly think they must take over those rental appliances, or just find themselves in a position where they cannot buy immediately and outright the replacement appliances.
This is where at ZVR we would like to poke companies like Reliance and Enercare in the eye with the same zeal as we do real estate agents. The key is to understand that there is nothing legally compelling a buyer to take over the appliance contract from the seller when they buy a home. Enercare for example even tries to embed its appliance rental fee in utility bills through Enbridge. One aspect of their trickery is sending letters that state that making a payment indicates acceptance of appliance rental contract assumption. We don’t think this would do too well if challenged in court, as it is clear that a meeting of minds is likely to be absent. In our contracts we always try to omit the rental appliance assumption, and if the seller is insistent then we negotiate a price that includes a buyout for the rentals.
Practically, here is what a buyer needs to do: first, never pay. When a utility bill comes, ensure only the utility itself is paid, and never the rent for an appliance. If you did not assume the rental contract you only need to tell the rental company the following: “Your junk is on my property. You have 6 weeks to remove it. If you do not, I will dispose of it.” Otherwise, it isn’t a certainty you will need to pay the rental companies what they ask to break the contract. There is a consent order that strictly limits what Reliance might be able to charge. They may try to deceive you by saying the only way to break the contract is to purchase the appliance, but the consent order is quite clear about how Reliance “shall” permit the contract to terminate and what they may charge. For details specific to your situation you can contact a ZVR lawyer for advice.
Many homebuyers would be cash-strapped after closing, having spent all they had and more to purchase the home. A ZVR customer on the other hand would have their commission rebate arrive soon after closing, which should be quite a bit more than necessary to replace rental appliances with new, fully-owned ones.
